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In today’s turbulent economy, frustration over narrowing options and increasingly limited career opportunities has caused many people to consider leaving their job to start their own businesses. For those currently between positions, even a less-than-successful enterprise can be a tempting possibility; given the stigma attached to long-term unemployment, confessing a failed business to a prospective employer may seem less daunting than admitting to months spent out of work.
For others, the opposite is true. Starting an enterprise may be less of a pipe dream or measure of last resort and more a part of their long-term life plans. Many have had a solidly fleshed-out business plan in place and perhaps have taken the first steps towards putting it into action. They may even have launched the business already, only to be deterred by the challenges presented by setting up a new business in the current economic climate.
When deciding whether to pursue conventional salaried employment or embark on a new life at the helm of a small business, it’s important to be completely objective. Either course of action will require some sacrifice and neither is risk-free. By taking stock and asking certain difficult but crucial questions, you can avoid a hasty decision that leaves you in a worse situation than before.
The first question is whether you’re proactively choosing to become an entrepreneur or reacting to an unsatisfactory job situation. When you’re mired in the day-to-day frustrations of a role that makes you unhappy, it’s easy to look at life as a small business owner through rose-tinted glasses. Ask yourself: if the key issues with your job vanished tomorrow, would you still want to be an entrepreneur? If the answer’s yes, then you’re probably making the choice for the right reasons.
You’ll also need to consider where the money for your new business is going to come from. Can you raise enough money to launch and sustain your business? Have you included a margin for error? Unforeseen costs can sink a company.
Evaluating your skills in the light of your company’s requirements is another important step. Many new entrepreneurs rapidly find themselves out of their depth because they’ve overestimated their ability to pick up essential skills on the fly. If your business requires an extensive Web presence and you’ve never built a website before, for example, it may be a good idea to bring someone on board who can handle that aspect of the business.
Also consider the changes you’d need to make in your own day-to-day life and that of your household in order for your business to thrive. Are your friends and family on board with your plans? How will you set boundaries between work and home life? You’ll need to know how to organize your time effectively, resisting the lure of procrastination.
One final question that should be asked is: do you have a safety net? You’ll need to establish a fallback position, an alternate set of options for a worst-case scenario in which your enterprise isn’t a success right away. While the thought of burning your bridges may be exhilarating, maintaining a cordial relationship with your erstwhile employer and workmates is good business sense and means that you’ll have contacts to approach if you need to find another job.
Before you make an irrevocable decision between job or business, think about other options that might be available. It may be possible for you to switch to a part-time job which will provide security while you test out your business plan. You could also consider freelancing, offering your services as a contractor. This would give you the flexibility you need to maintain a steady income while still giving your business the start it deserves.