Entrepreneurship has exploded over the last couple of decades. Between 1990 and 2014, 27 million Americans started or were running new businesses. And with the explosion of the “Gig-Economy”, it has become common to freelance on the side to bring in extra income. When a side-business really starts to take off, the entrepreneur often begins working crazy hours between their day job and their side-business. At this stage, many people are thinking: How do I know it’s the right time to quit my day job to become a full-time entrepreneur?
5 signs it’s time to quit your day job to become a full-time entrepreneur
It’s pretty difficult for anyone to keep up a booming side-business while working a full-time job. Afterall, there are only so many hours in the day; at some point, your attention at work or your ability to fulfill orders/meet client needs is going to suffer.
Unfortunately, there is no one size fits all answer and no matter what, quitting a day job carries some risk. In the end, you’ll know that it was the right time because your business is successful. This list from entrepreneur.com provides clarity about what to look for before taking the leap:
- Your side-business revenue is consistent. Great revenue generated from a viral launch may be exciting, but it doesn’t prove that your business can generate consistent revenue month over month. Also, be sure to factor in the expenses you will incur if your business grows.
- You have savings set aside. You will want to have a minimum of a few months of living expenses set aside before quitting your day job, which should be doable if you are working full-time and bringing in extra income from your side-gig. These savings will get you through lean months or unexpected bumps.
- You have retirement and other benefits organized. One of the biggest perks about working as an employee is the health care benefits and the 401(k) plan. Since you will lose these benefits when you quit, you will want to get them organized on your own first. Visit healthcare.gov/Hawaii for healthcare options and see if you can rollover your 401(k) plan into a Roth IRA so you can continue contributing to it. Note that changing jobs or income levels counts as a qualifying life event so you will not need to wait for healthcare open enrollment season to apply.
- Your business revenue is bigger than your day job salary. If you have been living off of a full-time salary plus the revenue from your side-business, it would be quite a shock to your budget to quit your job and find yourself living off of a portion of your day job’s revenue. You will want to wait until your business revenue has exceeded your day job salary and do the math to ensure that you can live off of it.
- You can’t handle the day job and side-business at the same time anymore. If you’ve reached the point where your side-business is keeping you working late into the night and on weekends and you simply can’t keep working both, it may be time to decide between your job and your business.
Partnering with Makai HR
Many businesses start out very small; handled almost entirely by the entrepreneur. Over time, as the business grows, the entrepreneur becomes an employer. When you partner with Makai HR you can get on with the business you are trying to grow while we take care of your employee needs from payroll to taxes, health insurance/benefits and worker’s compensation. You also gain peace of mind that you are in compliance with all of Hawaii’s employer laws (if you’ve ever looked you know that the list is very long). When choosing a PEO to partner with, there are many things to consider including cost, services and technology solutions.
With the cost of doing business in Hawaii at record highs, we know how important it is to keep labor costs in line with revenue. Our plans are priced competitively and include value-added services like time-in/time-out systems. Our three tiers of PEO service plans are tailored to the size of your business and specific needs. We offer a 100% paperless solution which means that your employees can manage their needs through a computer, tablet or phone. We can truly improve your employees work benefits while freeing you up to run your business.
What are you waiting for? Companies who partner with a PEO benefit from 7-9% faster growth, 10-14% lower employee turnover; and they are 50% less likely to go out of business. ,Contact us today to get started!