I was reading the New York Times last week when I came upon a column entitled “Changing Careers? Embrace the Risk.” It was a piece about people with financially solid careers who risked everything for a chance at entrepreneurial success.
It profiled a number of such risk-takers, including the editor-in-chief of Essence Magazine who switched gears to open a bed-and-breakfast business, a corporate lawyer who left his firm to start a nonprofit organization and an education administrator who quit her job to open up a commercial art studio.
My takeaway from the story was that leaving full-time employment with its (relative) security, regular paycheck, predictable infrastructure and perks requires a certain kind of courage. What all these employees-turned-entrepreneurs shared was a good idea, the right attitude, a strong business plan and “a single-minded focus on a niche, not an overarching vision to change the world.”
Much of their success can be attributed to having first seen their industry from the inside and acquiring a keen understanding of both its potential and its constraints.
In other words, they looked before they leapt.
Generally, individuals who leave their jobs and start a business go into the field in which they work, or in which they have expertise. The Essence editor first ran one property part-time and now owns five; the educator put her graphic designs online before committing to starting her own business. As business consultant Melinda Emerson says, “Validate your concept. You need more than just your mom and boyfriend to like it.”
Richard Branson agrees that leaving full-time employment doesn’t have to mean a jump into the dark with no parachute.
“Leaving steady employment is not easy for many people. While some born entrepreneurs are ready and willing to dive into business opportunities, other people are more reserved and need a push. This doesn’t mean that they will not make great entrepreneurs – success is certainly not reserved for one specific personality type.
Another common reason that people hang back is because they think that becoming an entrepreneur means committing all your savings to an idea on blind faith. But often you can start small and build up to something bigger.”
Branson cites the example of British-based Innocent Drinks co-founder, Richard Reed, who started his company in 1999 after selling smoothies at a music festival. “We put up a big sign asking people if they thought we should give up our jobs to make smoothies, and put a bin saying ‘Yes’ and a bin saying ‘No” in front of the stall. Then we got people to vote with their empties. At the end of the weekend, the ‘Yes’ bin was full, so we resigned from our jobs the next day and got cracking.”
So when do you walk into your boss’s office? Business consultant and author Barry Moltz advises to err on the side of risk. “You must quit your job as soon as you have paying customers who are not related to you. You have to focus all your energy on making it work—otherwise you’ll never know if it had potential.”
While I agree you have to commit to any endeavor for it to succeed, I’m also pragmatic enough to know that the risk has to be balanced. Have a comfortable safety-net before you jump. Chances are, debt will outweigh income at the beginning so take advantage of the income from your full-time position before you cut ties.
Many startup entrepreneurs cannot afford to just give up their steady jobs to run new businesses. Easing into entrepreneurialism is common for people making the transition. A study many years back showed that nearly a third of people who own small businesses depend more on a second job as their main source of personal income than they do on their business, although the dependence on outside work decreased as businesses grew.
Making the shift from the steady life of a full-time employee to the unpredictable world of entrepreneurship takes smarts, guts and support, but you’ll never know if it’s right unless you embrace the risk.