When I quit my job to start a business, I thought I had everything lined up. I did my market research. I interviewed other people. I had money saved up. I was positive I'd be doing something nobody had ever seen before.
And, then, five months later, I was starting to regret my decision. It turned out my market research wasn't that thorough. I interviewed the wrong people. And this crazy idea I was sure nobody else was going to have seen before? Yeah, it wasn't that different, after all.
I was going to be struggling to get customers unless I made a huge change. I ended up going back to get a full-time marketing position. Three years later, I left to start a company again, and this time I did it the "right way."
I had multiple paying customers, I was making more money than my fixed costs every month, and I was building a great brand online through LinkedIn.
Here are the two things you need to know before starting your company. Learn from my mistakes and successes.
1. Understand your fixed monthly costs down to the penny.
I had what I thought at the time was enough money to last me for a while to sustain my entrepreneurial journey. Well, I was wrong. Way wrong.
I realized this when I finally sat down and added up all of my monthly expenses. Have you ever seen a number in Microsoft Excel and not believed it? I thought the math functions in Excel might have been broken. It turns out, the numbers were right, and I was actually spending a lot more money per month. This turned my world upside down. As soon as I was done adding up the numbers, I knew my entrepreneurial journey would have to wait for another day.
You should absolutely know what your biggest fixed expenses are. It's usually your rent or mortgage, car, and insurance costs. You should also know how much money you spend on groceries, food delivery, and dining out. You can use apps to track spending as well, since these can give you a harsh reality check on how much you actually spend every month.
Once you know exactly how much you're spending, it's time to take action to see how you can lower it. Could you refinance your mortgage? Could you lower your insurance costs? Can you cut down how many times per week you eat out in restaurants? If so, do it now before you quit your job.
Many experts say you need at least six months of expenses saved up before quitting. If you don't have anyone depending on your income, then six months is doable. Once you have a family, the number of months saved up should be double or triple that amount.
2. Build a long-term personal brand that's not tied to your company.
When I started my entrepreneurial journey, my confidence was so high I thought I was much smarter than every other entrepreneur out there. I thought my software company was the best thing ever, so I spent a lot of time talking about it. Then, when I decided to shut it down, I stopped posting online because I had nothing else to talk about.
I was using these social media platforms selfishly. So I decided to focus on building a brand that would last through multiple companies and wouldn't require me to "shift my personality" for every single company.
For me, this involved writing about career advancement, even though I've never really built a company around it. It keeps my followers flowing and my engagement high. So, while you're still working with your employer, start building your brand. When you decide to quit and launch your company, you'll have an audience who will listen.
In the end, starting a company is fun, but filled with ups and downs. You'll never regret starting a company, but you might regret quitting your job before you're ready. Good luck!