I’ve said many times that life is too short to stay in a job you hate and be miserable. The better option is to create a job of your dreams based around a personal interest or passion. With the advent of the internet it has never been easier to go into business. By marketing online you can reach a global audience and sell your services and goods around the world. But I never ever said that this would be an overnight process! When is the right time to give up a job you dislike and focus solely on your passion-driven venture?
An Interesting Study
I was reading a great article on the Wired website recently titled, ‘Entrepreneurs, don’t give up your day jobs … yet’. This article referred to a study by Joseph Raffiee and Jie Feng, called ‘Should I quit my day job?: A hybrid path to entrepreneurship’. The study looked at the career path of thousands of American entrepreneurs over 15 years. It revealed that those who started companies while keeping their day jobs were 33 per cent less likely to fail than the ones who quit their day jobs and focused only on their companies. Quitting a full-time job to start a company is like proposing marriage on the first date!
What these Millionaires Have in Common
Many extremely successful company owners kept their day jobs while starting up businesses. Phil Knight sold running shoes on the side for five years while working as an accountant. After five years of building up customers, he started Nike. As they say, the rest is history. Steve Wozniak kept working at Hewlett-Packard one year after inventing the Apple computer. Bill Gates continued his study at Harvard University a year after designing and selling his first software program. Sara Blakely invented footless pantyhose, but for a year she held-on to her day job selling fax machines. Today we know her company as Spanx – it makes spandex clothes and Sara is a self-made millionaire.
Finding the Perfect Balance
I wrote last week that keeping your day-job and running a business on the side is in many ways the perfect balance of stability and creativity. Your day job offers you a reliable wage, while your own business is an outlet for your genius and entrepreneurial spirit. I’ve also said that it is fine to work in a low-paying job on the side. This means you can still follow your dreams – you just run your business around that job. It doesn’t matter if you get a job cleaning, delivering advertising material or working in a bar. It is a means to an end. You can keep growing your business and you have money coming in. If you have a paying job, it means you don’t have to worry that your business not generating big profits immediately. Having a day job, also gives you the money and resources to refine your business. You might want to pay someone to design a fantastic website for your business. That could double your client list. Having a day job means you have the funds to do this. If you quit your day job, your business must turn a profit immediately. Keep your day job and you have longer to design and launch your enterprise. You can keep refining it, until it’s perfect! Sara Blakely, who invented spandex, could have started selling her product as soon as she invented the prototype, but she spent another two year perfecting spandex, and she kept selling faxes in that first year.
The Case of Walt Disney and Colonel Sanders
Hanging onto a day job means you have more license to be creative. If your enterprise does not work out, move on to your next brilliant idea! Many entrepreneurs set up a stream of failed companies before hitting the jackpot. Walt Disney and Colonel Sanders both ran numerous businesses that failed – went belly up!
The study by Raffiee and Feng also found that the people who set up companies and held-on to second jobs were more careful than the people who jumped in boots and all. These cautious people constantly questioned their ideas and sought extensive feedback – meaning they were more likely to get their product right, than the people who gave up their day job. Basically if you start your business as a hobby on the side, you are more likely to succeed than people who invest everything into a business!
The statistics in America are that eight out of ten startup companies fail. Remember a startup company is one which markets primarily on the internet and often does not have a shopfront. I bet the owners of those failed businesses wish they could go back to their day jobs.
If you feel that you really need some time to establish your business think about taking leave from your job. Do you have any long-service leave? How much holiday leave do you have? Does your company offer leave without pay? Consider also whether you are competing directly with your paid job. In these circumstances you will have difficulties running a comparable business after hours, while holding onto that job. Public servants are particularly constrained by conflicts of interests. I hope you have a good relationship with your boss and can talk to him or her about your passion-driven enterprise. Maybe they will be more supportive than you expect! Perhaps they also have a passion-driven idea and are thinking seriously about starting something. They may come to you for advice one day.
Before you do start a passion-driven business (while also working another job), I have four questions for you:
Do you have any evidence that your new business will work?
Have you made contacts who will sign up for your services? Have you talked to friends, colleagues, neighbours and family as to whether these services appeal to them? Please do your research carefully.
Are you prepared to spend money on getting your passion-driven idea off the ground?
Yes, you will need to invest in getting your idea working. That is why it pays to keep a job on the side. Who will design your website? Who will set up your social media profiles? Will you also need business cards and smart graphics for your new business? Have you considered paying a mentor to help you in the first year?
Are you good at tackling problems?
Running your own business will be challenging. As an employee, you have access to resources and support from managers. Guess what! When you run your own business, the buck stops with you. You will have to sort out the problems.
Do you mind giving up your social life and having less time with family?
The one disadvantage of holding onto a job and running a business is that you will be time poor. You will have to go to work and invest time on your business. If you are running a business online you are going to have to spend time answering questions. Before buying a product or service for the first time, people usually have questions so expect a lot of emails to come your way. You are going to miss out on parties, family gatherings perhaps even holidays if you intend to build a successful business and work a day job, but again the upside to holding onto a job is that you will have financial security while you establish your business.
Only when you are turning a great profit, can you quit your day job. Remember Phil Knight waited five years and Sara Blakely waited two. I recommend generating a strong profit for at least a year before quitting your day job.
Be grateful if you have a paying job on the side. I once heard an entrepreneur explaining how he got into business. "I was afraid to go out on my own,” he told his friend. “But my former boss gave me a jump start by telling me the most encouraging three words of my life. One day he called me into his office and said ‘You are fired.’”