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Encompass® Agency Insights

Making the Leap from Employee to Entrepreneur

You are already further ahead than millions of people who want to start a business if you even have an idea for one. However, a lot needs to happen between the time you think of a new business concept and the time you officially become a business owner. One of the most common concerns of most new entrepreneurs is when they should resign from their current job.

Woman on the phone in her office.

A Foot in Both Worlds

When you work for an employer while trying to devote most of your free time to your new business, it can feel like neither receives your best effort. While no one can tell you when to put in your two-week notice at work, asking yourself the questions listed below can help you clarify a timeframe.

  • How much money do you need to earn after business expenses to pay your personal bills? How close are you to reaching that figure with your business income alone?
  • How many products or services would you need to sell each month to be able to support yourself?
  • How long could you get by if your business income is less than your current salary?
  • Do you work well under pressure, or does it make you too anxious?
  • Would you like to have a certain amount of funds in savings before you resign? This startup cost calculator from the Small Business Administration (SBA) can help you answer some of these questions.
  • You might also want to explore the possibility of dropping from full-time to part-time with your current employer. Just be sure not to pursue any of the same customers and understand what other lines you should not cross before exploring this idea.

Preparing to Be Your Own Boss

No matter how much or how little time you have to plan your new business launch, you will need to accomplish certain things. For example, you should offer an innovative solution to a problem that is not already available to most people.

You also want to spend considerable time performing market research to ensure that a demand exists for what you want to offer. If it does, can you offer a better product or service at a more affordable price than the competition? Make sure that you identify and study your top competitors to be able to answer this question.

Next, you want to create a detailed business plan that outlines how you will operate your new company. Potential investors are especially interested in seeing this written document. According to the SBA, you can create a high-level business plan that covers only key elements or a traditional business plan that includes descriptions of the following:

  • Executive summary
  • Company description
  • Market analysis
  • Organization and management
  • Service or product line
  • Marketing and sales
  • Funding requests, if applicable
Keep in mind that the more funding you need, the more likely it is lenders will request a traditional long-form business plan.

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