Have you ever pictured yourself marching over to your boss’s office and quitting in a dramatic flourish to focus full-time on your side hustle?
As tempting as that may be, it’s important to plan for the day you hand in your last-ever resignation letter. Here are four things you need to consider before quitting your job and starting your own business.
Consider All the Costs
Perhaps the most important thing to do is to calculate all of your potential costs if you were to quit your job. This would include your basic living expenses, such as your food and rent; your business expenses, like operating costs, business insurance, vehicle costs, accounting software, internet, equipment you may need, office rentals, bank account fees, and tax obligations; and personal expenses, such as life cover and medical aid.
Have an Emergency Fund
Once you’ve figured out what your monthly expenses will be, start to save for an emergency fund. Experts recommend you save between three to six months’ salary so that if your business doesn’t pick up as quickly as you had planned, you’ll still be able to get by for a few months while you get off the ground.
Create a Business Plan
A business plan is a detailed look at your product or service, and how you plan to launch it successfully. It will include information such as:
Objectives, vision, and mission
Outcomes of market research
Marketing, financial, and operational plans
It’s important to have a business plan so that you have a detailed roadmap of where you see your business and how you plan to get there. It’s also a must-have if you’re going to approach investors or financial institutions and convince them to give you a cash injection or business loan.
Learn from Other Entrepreneurs in South Africa
If you’ve never run your own business, it can be tough to figure out exactly what challenges you might face, or knowing if you’re even ready to become an entrepreneur. Don’t feel alone though; in their 2016 survey of over 1000 start-up entrepreneurs, local business accelerator Seed Academy shared some interesting insights on the state of entrepreneurship in South Africa.
For example, 48% of start-up business owners were between 25 and 34 years old, which isn’t surprising when you consider that over 80% of entrepreneurs had more than one year’s work experience, 33% had between one and five years’ and 28% had more than 10 years experience. This indicates that many entrepreneurs are using the skills, networks, and experiences they’ve learned from working to launch their start-ups.
On the gender front, just 31% of all entrepreneurs were women, showing that the start-up industry is still very much male-dominated.
In general, the biggest challenges entrepreneurs faced were finding new customers, filling too many roles, not having enough guidance, and struggling to raise funds. Sadly, only 5% of the businesses were older than five years, indicating the importance of a long-term vision and business plan.
It’s clear that running a business takes hard work, even before the business gets off the ground! Unexpected costs and accidents can undo all of your hard work, so it’s important to protect yourself with business insurance. Compare business insurance quotes and get the right cover to help you build your empire.
Prices quoted are correct at the time of publishing this article. The information in this article is provided for informational purposes only and should not be construed as financial, legal, or medical advice.