Hi, today we're talking about why you should never ever quit your day job to start a brand
new small business.
By the end of the video, I'll let you know how I personally made a transition from my
full-time day job into a brand new small business that I started in two different companies.
I'll give you details on that.
Stay tuned.
Hi, my name is Mike Mancini.
I'm a small business owner, entrepreneur, and a business coach.
Today, we're talking about why you should never quit your day job when you're starting
a brand new small business.
I'm going to give you six reasons why, and then I'm going to go into a little bit more
discussion to explain how I personally did it in two different instances.
Number one reason why you don't want to quit your day job is a steady paycheck.
I mean, do you like getting paid?
Do you like making money?
I think we all do and that's why that could be one of the reasons why you are looking
at starting a small business.
However, if you do like that consistent paycheck, you should understand that that consistent
paycheck, or at least the number, or the amount of that paycheck is probably going to go down
when you initially start a business.
You may be able to pay yourself on a regular basis, which you should.
However, typically people do take a pay cut when they go into that realm, because they're
thinking, "Well, you know what?
If I start my own business, I'll be making much more money because my company now makes
a lot more money by building my services out, and I just get a percentage of that."
Well, that is true.
Your company is also paying a lot of expenses.
They're paying for your benefits, they are paying taxes, they're paying for the office
that you're in, so on and so forth.
So you need to understand that you are maybe transitioning to a smaller paycheck.
In some instances, maybe that paycheck won't be there for a while.
So you need to be aware of that.
Number two is expensive.
Regardless of what you have read or what you have heard, starting a small business can
be expensive.
Sure, you can get started for cheaper by doing a lot of things by yourself.
But one thing you need to realize is time is money.
I personally don't think I ever realized just how true that was, until I had my own business
and I started spending time doing things that I should have been farming out, or I should
have definitely not been doing myself because my time was much more valuable, or should
have been spent doing other things.
Now, the more time it takes you to do those things, essentially, the more money it's costing
your business.
In this situation, you may need that income from your day job to help either farm some
of these things out or to help you finance your business.
Number three, and this one is really key, desperation.
When you start your own small business, you'll tend to really take any business from wherever
it comes from.
And I'm sure a lot of you can maybe empathize with that, or agree with me on that.
I remember when I started my first business, I would take business from absolutely anywhere
because for me, it was a small win.
I'm like, "Yes, new clients."
And then by the time I got done with the job I realized, either one, I lost money.
Or two, I hardly made anything at all because I didn't put myself out there for as much
as I should have been making because I was so excited to get new business, that I undercut
myself by a huge, huge margin.
And that desperation will lead you to making really bad business decisions, and you will
make much smarter decisions if you're not desperate for that business.
But do me a favor, let me know in the comments below if that's happened to you.
Have you ever taken a job out of, call it desperation or call it whatever you will,
at the very beginning of starting a business and realized, "I lost money on this."
Or, "I spent twice as much time with this client as I should have."
Or whatever it might be.
Do me a favor, let us know in the comments below.
Let other people who see this know that they're not alone, and that you understand where they're
coming from.
Number four is timing.
When you finally decide to quit your full-time job and transition to your small business,
you want to have the timing be right.
And what I mean by that is, perhaps it's a seasonal business.
You don't really want to start an ice cream stand in July in Minnesota as you'll almost
have missed out of two months of your busiest times.
You want to work on your small business while you're working your day job, get it ready
to go, and then launch right at the beginning of a busy season or just before it starts.
Once that happens, that could be a good time to transition.
A big mistake in regards to timing that I see a lot of people doing is they will literally
quit their day job and start their small business, and then right away, they're spending most
of their time setting up their website or learning how to get their bookkeeping in order,
and not actually getting any business or making any money.
That is the worst way you can go about it.
You can do that stuff at night on your own time, you can get things ready to go.
The worst thing you can do is quit your day job, jump into your business, and be spending
times on things that are not making you money immediately.
That is going to be the fastest way to failure, or the fastest way for you to essentially
go out and start looking for another day job.
You should be spending time in your business providing services that are actually getting
you paid, and not setting up a website or those other things that can be done early
on before you make that transition.
Number five, mindset.
It's much different going to work for someone else every day than it is to run your own
business.
Chances are that you're in your full-time job, and you're doing one job.
However, when you're in a small business, you have to do every job, whether that's accounting,
finance, sales, providing the actual services.
Everything involved, bookkeeping, whatever it might be.
It's your job.
You have every job now, not just one.
So a lot of people don't realize that and they go on and be like, "Oh, I'm just going
to be getting business and providing services."
That's not the case.
Now you have to figure out how you're going to get new jobs, how you go about your billing,
how you go about your accounts receivable, how you go about what kind of overhead do
you need.
A lot of people don't think about that, and their mindset is not in that place.
A lot of those things fall by the wayside, and it ends up either being very detrimental
to them or costing them a lot of money down the road.
So have your mindset in the right place.
Number six, commitment.
Do you have the commitment to start the small business?
What I mean by that is, you must be 100% committed, you have to be all in.
And you're not all in just by quitting your day job.
That's not committed, that's impulsive.
When you start a small business while working for someone else and keeping your day job,
you'll start to see what it really takes to run a business, you'll start to see the things
that you didn't see before, and that you're working towards something.
You're starting to figure it out what it's going to take for you to move forward.
When you've started to figure things out and what it's going to take for you to move forward
and push through every one of those roadblocks, then you become committed.
And then and only then should you quit your day job once you have covered all the other
things that we talked about before the stage.
But I would not quit your day job before that.
I'm going to give you a bonus one here, and it's called pressure.
Starting a small business is a ton of pressure.
Now that may be pressure internally, that may be coming from family or financial obligations,
whatever it might be.
But it comes with a ton of pressure.
If for some reason something goes wrong ... and trust me, it always will.
You need to understand how to deal with that added pressure.
The biggest piece of advice I can give to you is have a support system to help you deal
with that pressure.
Whether it's speaking to a therapist, whether it's speaking to somebody else who's in the
similar industry, or someone else who's running a small business that can help you out, or
just literally be an ear for you.
Maybe give you some feedback, whatever it might be.
Have a support system, because the pressure and the pressure you're going to put on yourself
is a lot.
And if you don't know how to deal with it, or if you just fold up every time that happens,
you are going to fail in your small business and that's the last thing that we want.
Now, the way I did it was when I started my first business, which was an online T-shirt
company, I had started this, I had started throwing some T-shirts up on a small website
that I had made.
And just had done it just for some extra cash, and then realized that there was an opportunity
for me to really take it full-time.
Before I made that jump, I'd been thinking about it for a couple of months.
Then things started to really pick up over about 60 day period, and then I decided, "You
know what?
I was in a situation at work, now's a good time to cut the cord."
And I did.
I really came out of that much stronger because I wasn't basically hanging everything on just
this one venture.
I mean, I really was, but I knew that I had worked, I knew that I'd already put some work
in and dealt with a lot of the roadblocks.
I understood that I was going to enjoy it, and I still had a lot of growing pains to
learn as I went.
With that said, It ended up being a really positive experience for me and it turned out
all right.
Now fast forward seven years from that point, I was in the T-shirt business still and I
wanted out.
I was done, I just wanted to do something else.
But over that seven year period of time, I had figured out I was really good at marketing
it online.
So I really wanted to transition to that.
But if I quit the T-shirt business, all that revenue, or all that income, I would have
failed right away.
I needed to have something to transition into because I wasn't quite sure how it was going
to do it yet.
So in that instance, what I did was I started the business.
Just got the business name and the website, and some of that stuff up and running.
Just an hour or two here and there.
And then when it was ready to go, I decided to farm out some of my services.
Now I did that at first to a couple of friends of mine for free and said, "Listen, I'm doing
this marketing, can I come do some for you for a certain period of time?
Do it for free.
If it works out, you hire me on as a guy that takes care of that."
And they were like, "Absolutely, especially if it starts off for free, and you show us
that it works."
And that started right away.
So I did that for I think about 30 days, and then I decided I was going to make that transition
so I put the business up for sale.
It took a couple of months to sell the business, so I had another 60 days or so to worry about
that.
But that was my transition during that time.
I didn't just walk away from the business.
But in that case, I could have sold the business and started another one right away based on
the money I got from the business sale.
However, it would have taken me that much longer to get up and running.
So I started about 90 days, 120 days before I actually sold the business, and then I really
transitioned very, very quickly into the new one.
In fact, I started making more money within just a couple of months after actually selling
the other business than it was previously.
So that's how it worked out for me.
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