First off, congratulations!
Even just thinking about going full-time with your entrepreneurial journey is a big step – and not one to be taken lightly!
There are a few key things to do when deciding to take the jump from full time W-2 work to being your own boss.
1. Analyze your personal and business expenses.
What are the bare minimum necessities that you need to live?
This might include canceling your HBO Max subscription – I know, drastic!
Putting together a list of your monthly expenses will help you determine what income you need to make the jump.
2. Make sure you have an emergency fund!
I cannot stress this one enough.
Have an emergency fund!
A good recommendation would be 3-6 months of living expenses.
You will hopefully have some income coming from your new full-time gig, so 3-6 months of living expenses will give you plenty of runway.
The last thing you want to be doing is going into credit card debt because your Toyota Corolla needed new tires.
3. Utilize the 60% rule
A great rule of thumb to have handy is the 60% rule.
The rule goes something like this:
“Wait until your start-up’s income reaches at least 60% of your current full-time salary before transitioning to the business full-time.”
This is an extremely wise way to quantitatively evaluate when you are going to take the leap.
AND it gives you a great goal to work towards! 4. Plan for a phased transition
Any transition period is tough.
Especially when you are making the leap from a W-2 job to your entrepreneurial journey.
Working out a phased transition program with your current company can help you ease in as you decrease your hours.
ACTION ITEMS:
- Set clear revenue targets that will trigger your decision to make the transition.
- Regularly review both your business performance and personal finances
- Plan ahead whenever possible
- Schedule a free call with me. I’d love to hear your dreams!
