Q: When starting a business and working at the same time, when do we know it is time to give the business all our attention and stop working a day job?
Dan Gudema, founder
A: Nearly every entrepreneur I know, including myself, has asked this question, but unfortunately, given the nature of individual circumstances there is not a clear answer. I admit I did a Google search, suspecting that much had been written on this topic, and, no surprise, there were some recurring themes. As I reflect on my own experiences, as well as those of my friends and former students, I think I can add a bit more nuance to the top three issues.
1. Is your idea a good idea? The correct question is, “Is my idea a sustainable business?” There is truly only one point of judgment and it is with the customer. The tension is that many entrepreneurs can’t know the true potential until they are focusing on the venture full-time. Momentum, information and confidence don’t arrive in adequate amounts when your only touch points are evenings and weekends. You can improve this by having a team that is collectively creating more touch points with the market.
2. Covering expenses: Most of the articles I read said, “Be sure you can cover your expenses.” But it is difficult to predict the expenses of launching a business. You can, however, control your living expenses so you can answer for yourself just how much of a change of lifestyle you are willing to endure to realize your dream.
3. Change in lifestyle: Austerity measures are difficult enough, but have you thought through the feeling of having a title, co-workers, support staff and social network of a job one day, and all of that being gone the next? You are trading for long days, long nights, often alone and without operational support. It can get lonely in a hurry.
So, when is the best time? I suggest looking for the signs. How does the support group react to your idea? Are mentors supportive? Are they getting in the trenches with you? Are the first customers showing enthusiasm? Do they engage? These types of signs will give you some clue about where you are on the timeline to leaving your day job.
Alec Johnson is an associate professor of entrepreneurship at the University of St. Thomas Opus College of Business.