10 Things to Consider Before Quitting Your Job to Start Your Own Business

(This is a guest article by Andrew Wang*)

Starting your own business is more often than not a stressful and risky proposition. These days, it is an unfortunate fact that most small businesses are doomed from the very start, for whatever reason. Recent statistics found that 7 out of 10 small enterprises close down within two years of opening, and a further 1 of the 10 will shut down within 5 years. There is however some hope, in the fact that 20 - 30% of businesses do find success somewhere down the track. In this article, I will give you 10 things to do before you quit your job and put all your effort in to a particular business idea. Getting these 10 things done properly will substantially assist you in your entrepreneurial endeavors - and may just be enough to keep your business afloat, through both the good times, and the bad.

  1. Know The Lingo:

  2. Don't quit your job until you know the lingo. By "lingo", I mean all the terms, information, and expertise that business owners are expected to have. You MUST know what your liability level is, should your finances take a turn for the worse. Learn about the stock market, how big business works, and how small business differs from mainstream corporate affairs. The internet is a great resource here - so use it, and gain the knowledge necessary to advance.

  3. Research:

  4. Don't quit your job until you have enough research behind you to prove that your business model can be successful. One of the biggest mistakes people make is that they get all excited about the prospect of owing a business, and hastily rush in to things. If you don't know the statistics, industry trends, and consumer behavior surrounding your area of business - how can you possibly sell your products or services?

  5. Sort Out The Legal Aspects:

  6. Don't quit your job until you know that your business is not going to give you legal issues. To be blatantly honest, legal issues cost money, waste time, and will very possibly lead to business failure if you get caught up in one. Know the rights, responsibilities, and obligations you will be taking on when you leave your job and focus on your own business.

  7. Analyze The Marketplace:

  8. Don't quit your job until you understand the marketplace and what your industry is really like. What quality and service standards are expected in this area of business? Are you able to provide that standard or higher? If not, take a serious look at your business plan, and try to determine if the idea as a whole will be appealing to the market.

  9. Find An Accountant & An Attorney:

  10. Don't quit your job until you have an attorney and an accountant. Trying to find a cost effective solution to accounting and legal aspects of your business will be like finding the holy grail of money making schemes. However, it is unfortunately a necessary step in any strong, forward looking business. Get these two sides of the business sorted early, and you will have a lifeline on hand, should it be needed in the future.

  11. Read Past Success Stories:

  12. Don't quit your job until you have a rough idea of how others succeeded before you. Remember - unless your business is highly unique, you're probably not the first person to have had the idea. Consult business journals, look on the internet to find related business stories, and see what key attributes and features defined failure from overall success.

  13. Work Out Who Your Competitors Are:

  14. Don't quit your job without doing a bit of background work. If your idea is to start a corner dairy or convenience store - is there really going to be enough demand out there to generate more profits than you are currently earning? Remember - what is the point in quitting your job to earn less than you were previously?

  15. Get The Right Training:

  16. Don't quit your job until you can confidently say that you are an expert in your area of business. Anything less than expert knowledge will leave gaps for other people to steal away your market. Just imagine a potential customer rings you and asks a somewhat complex, yet relevant question - which you are unable to answer. Put yourself in the other persons shoes, and imagine how you would react.

  17. Determine The Real Demand For Your Product or Service:

  18. Don't quit your job until you are 100 percent certain that people will buy or want your goods. See, there is a big difference between what your opinion of your own product / service is, and how the rest of the public feels. Just because you believe your product is a wonderful and useful thing, this doesn't mean that other consumers will. Quiz people as to whether they would be interested in your goods, find faults, make improvements, and when its time - take the best possible product to market.

  19. Make A Sale Or Two:

  20. Don't quit your job until you have solid proof you can run your business successfully. Have you made any efforts to sell the product in the past? A few sales would be preferable before you stop receiving your current income stream, and focus solely on generating income with your new business. By having a brief yet reliable sales history prior to dedicating all your time, you can prove to yourself and others that this is not just a spur of the moment decision, which you might live to regret.

That concludes our list of the 10 things to do before quitting your job. Of course, not all 10 things will be applicable to everyone, so to give a closing remark, I want you to think about one big thing. Be careful, logical, and practical. Creating and growing a business is not as easy as it's made out to be. Ensure have the skills, resources, and energy to get things off the ground, and who knows - you may be the next success story just waiting to happen.

*About the author: This article was contributed by Andrew Wang. Andrew lives in the Seattle area. He manages the blog Travel Reward Credit Card.

*Image Credit: Photograph by Ayres no graces [via Flickr Creative Commons]

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