Archive for July 12th, 2012

Dear Danielle: Should I Quit My Day Job to Start My Administrative Support Business?

Dear Danielle: Should I Quit My Day Job to Start My Administrative Support Business?

Dear Danielle:

I am a single mother. I currently work full time, but am actively (and as quickly as possible) working towards becoming a legitimate business. The question (or dilemma) I have is that I am reluctant to just leave my job and go full force into my own business. I have considered a small business loan to help with the transition, but I would rather not go there. Do you have any suggestions or pointers on softening the blow? —Nicole Barton

Thanks for writing, Nicole, and I do have some feedback and advice for ya!

You are smart to be reluctant about starting your business by going into debt.

Even if you wanted to, though, business loans for start-ups aren’t handed out like candy.

New small businesses are one of the highest risk groups there are (90% of new first time businesses fail, and it generally takes a good 3-5 years for those that stick around to really start gaining any kind of traction and financial solvency).

You’d have to have all your ducks in such a fantastic row to even remotely qualify. And if you got yourself to the kind of level they require in order to qualify, you wouldn’t need the loan by that time anyway.

So first, here’s what you want to have realistic expectations about:

It takes most people many months (sometimes even more than a year!) before they get their first client.

Those first clients are more often than not project clients (as opposed to retainer clients), and odds and ends project work simply is not going to give you enough of an income on which to support yourself and quit your job.

Now, that may end up not being the case for you, which would be great, but it’s better to have realistic expectations so that you are better equipped and prepared for the long haul and can plan accordingly than to dive in eyes closed, hoping for the best, and walking away discouraged, disappointed, and broke (or worse, in debt).

While you are employed (and earning an income) is actually a great time to lay the foundations for your new business. What I mean by foundations are things like:

  • Getting all your initial business learning, studying and planning in;
  • This includes getting intention and clarity around what your pricing and income needs.
  • Taking care of business legalities (e.g., registrations, etc.)
  • Figuring out your target market;
  • Coming up with your biz name;
  • Securing a domain name, creating your website and drafting your marketing message;
  • Getting your starting policies and documents in place
  • Purchasing your most important essential business tools/equipment and other necessities (a state of the art computer system and the fastest, most reliable Internet service you can get are the best investments you can make.)

While you are employed is also a good time to start socking away some money to live on and sustain the business for the time when you decide it’s right to finally make the leap.

The good news is that our kind of business is one of the easiest and most affordable to start!

There’s no travel involved, you work from your own home office, the start-up costs and investments are minimal (compared to other kinds of businesses), and it costs hardly anything beyond some basic services in overhead to run your business.

When I started my business, I actually did it for many years on the side while still working my day job.

Then an opportunity came up during another round of company-wide layoffs where I was able to volunteer for lay-off. I received a very nice severance package which I used to fund my new business.

Of course, by that time, I already had my all my equipment and foundations in place so all I really had to focus on at that point was marketing and networking and getting those retained clients as a full-time business.

So don’t be eager to take the leap too quickly, particularly if you aren’t well-prepared for success (you didn’t say where you are at in the process so I’m not sure what that is for you).

Then again, at some point, there will be a time when you have to make the leap in the interests of your business and those of your clients.

Get your foundations in place while employed, perhaps begin to take on some projects and ongoing clients on the side during that time, and then once you’re ready to make the leap and quit your day job, make sure you have some other form of income or savings to live on (e.g., savings, a spouse’s income, unemployment, severance pay, side jobs and project work) while your business is in the early years and you are focused on gaining those first retained clients.

Hope that helps!