Transitioning to entrepreneurship from a full-time employee role is a major life decision. Having experienced this transition myself when I left Goldman Sachs to devote myself to scaling Briogeo, I understand the mix of excitement and anxiety that can come with such a major career change.
“It’s not just about following a dream; it’s about strategically planning for success.” – Nancy Twine
As you think through a transition from employee to entrepreneur, here are a few key factors to consider, drawing from my own journey and lessons learned:
1. Choosing the Right Time to Make the Move
Knowing when to shift your focus entirely to your startup is crucial. For me, the defining moment wasn’t when I launched my brand – it was almost a year later when I received the opportunity to launch Briogeo in Sephora – a clear sign that my startup demanded my full attention. Reflect on what your milestone looks like. It could be securing your first meaningful investment, landing a particular retailer, or reaching a point where your part-time commitment is no longer sufficient for taking your business to the next level. Understanding the right time to make a full-time shift to running your business will also give you a clear defining-moment goal to work towards..
2. Financial Planning
Preparing financially is key and begins early. I made sure I had enough savings to cover my living expenses for a comfortable amount of time, knowing that a steady income would not be immediate. Assess your financial situation and determine how long you can sustain yourself without a regular salary from your startup. It’s important to create a detailed budget and understand your burn rate – the rate at which you spend money in a given period. Tools, like Mint and Quickbooks, can be helpful for tracking expenses and planning.
3. Handling the Emotional Shift
The social and environmental transition from an office culture to working independently can be challenging and feel lonely at times. It’s about more than just leaving a job – it’s about altering your daily life and aspects of your identity. I found that establishing a new routine (inclusive of interacting with people in person during lunch and coffee breaks) and maintaining regular connection with former work colleagues helped immensely with creating a sense of community as an early solopreneur.
4. Health Insurance and Benefits
Before handing in your resignation, you’ll want to ensure that you have a plan for how you’ll maintain health insurance and other necessary benefits. I had to navigate whether to continue with my employer’s plan through COBRA or seek my own new, independent coverage. Healthcare.gov offers comprehensive information on various health insurance plans suitable for entrepreneurs. Also, don’t forget to account for the potential loss of other necessary company benefits and how much they will cost out-of-pocket – this includes your 401k, if you’re contributing to that each paycheck.
5. Legal and Paperwork Considerations
Navigating the legal and administrative aspects of starting your own business is another important step in the planning process. Before leaving your job, it’s important to understand any legal restrictions you might face, such as non-compete clauses or contractual obligations from your current employer Tasks like registering your company, securing your IP (intellectual property), understanding tax implications, and setting up your home office are all important items to have squared away at the onset. To ensure you’re fully aware of all the legalities and registration requirements, consult with a legal professional that can provide personalized advice tailored to your specific situation and business needs.
6. Creating a Supportive Circle
Building a network of support was so important to me in navigating the ups, downs, and uncertainties of transitioning to entrepreneurship. The value in connecting with mentors, peers in the industry, and other entrepreneurs has provided me with advice, support, and opportunities that are crucial during the early stages of scaling a startup. Think through how you might go about networking within your industry and finding mentors that can help support your journey.
7. Taking Care of Yourself
Prioritizing personal well-being is as important as business success. Running a startup is demanding, so it’s vital to maintain a healthy balance between work and personal life so that you don’t run into burnout. Regular exercise, hobbies, and quality time with loved ones contribute meaningfully to overall well-being. Think about how you will schedule regular wellness activities throughout your entrepreneurial workweek to help support peak performance and focus.
8. Staying Open and Ready to Learn
Different industries are constantly evolving, and you have no choice but to stay informed and adaptable. I dedicated time to continuous learning, whether through virtual summits or attending industry conferences. Being open to new ways of doing things and staying at the forefront of change will contribute meaningfully to the longevity and success of your business.
Transitioning into entrepreneurship requires courage, resilience, and determination. It also necessitates careful planning, a strong support network, and a commitment to continuous growth. Embrace this exciting chapter with confidence and prepare for a rewarding adventure that goes beyond just running a business – it’s about bringing your passion to life.To help you navigate this exciting yet complex journey, download the Entrepreneur’s Startup Checklist below, which covers all the essential steps and considerations discussed above with specific actionable tasks.
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