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Only talking about those who have. But if folks who haven’t want to weigh in on when they think they could that might be helpful too.
Since 2018 I’ve been burning the candle at both ends. Yet, it was only in 2021 that I really expanded my business so it would be more profitable, but also take up a lot more time. I still make a lot more money at my day job which is the big reason I haven’t quit. The downside to it is that I barely have any time. There are things I’d like to do with my small business that my day job is really making difficult just due to time constraints.
My day job can be really stressful whereas my small business on a good day doesn’t even feel like work. Right now the plan is to reach a certain financial goal I have in mind, cut back on the number of hours I work at my day job, and then devote more time to my small business.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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When you are depending on a business for your income, you need to have at least 6 months operating revenue in the bank, and the same for you home expenses. I did it differently, bought a business, quit my job, but with sufficient savings to get through the rough start while building the business back up to a comfortable level. It was close to a year before I started hiring help. Remember too that when you quit you are giving up paid vacation, sick leave, medical and any other benefits, all have to be paid by you 100%.
I eased into it by going part time on the job and full time on the business. I was still working about 14 hours a day, but the job also provided the insurance. Do you also have a spouse to help with household expenses?
Do you currently own a house? Once you are no longer employed, it's very difficult to get a mortgage or loan without two years of tax returns showing your business profits.
And I agree with Hemlock140, you need to have a significant savings before you quit your full time job.
I started with consulting in my field which led to lucrative engagement opportunities, while I was also investing in real estate (buying, renovating, and renting). I made sure that my side-gig income was 2X my W2 income. I didn't really plan for a 6 to 12-month emergency fund, however, I had money stashed away in investments and the real estate income was also coming in.
After building that business up, I sold it for a hefty sum. With the proceeds, I was thinking of coasting through early retirement, however I became bored and started a new venture after spending a few months in California. Right now, I'm building that business up.
When done right, you can forever kiss those paychecks goodbye. It's not easy (as I am sure you know) however it can especially rewarding during exits. Plan well and your hard work will pay off. If it doesn't you can always get another W2 job.
I started a small telecommunications cabling installation business back in the early 2000’s. Did a lot of research, and made sure I had all the appropriate licenses. Fully incorporated and insured. Had a home office, so that cut down on expenses. Handled all the operating expenses and tax filings myself. Nothing better than being able to write your own paychecks.
I quit my job age 26 to become self-employed and was very poor with a business partner for many years. Had no dependents so doing it young enough to fail is a good idea. Most businesses DO fail before they become profitable.
If I were OP I'd analyze whether I could employ other people and pay them less money to do the work needed to get the business going compared to losing their higher $$ paycheck and quitting later when the business could pay better. It takes many years to get a business up to minimum wage for the owner and then a few more years to get more money as profit.
I'd do it again exactly the same way I did it first time, quit and go self-employed. Just telling OP a rational thing to do but being self-employed is not always rational haha. In the end it's "your money or your life."
We started a commercial (not quick-print) printing company in '77, in SoCal. Began in our garage with one small press. I walked around to various businesses with flyers about our company (I was 23). After a year, we had a large Heidelberg press that cost as much as our house we bought in '76 (so already had mortgage).
Over the years the University of Long Beach became our biggest account and in the later 80s, decided to go with in-house printing. We saw the writing on the wall so sold the company to another printer since our particular niche was becoming done by in-house facilities.
We made money the first year and never had to advertise after my initial foray. It was scary but satisfying all those years (8 years). With printing, you can't resell it to another person. Basically trash---I hated that part.
I think we gave up our day jobs after 6 months, while still in the garage. It was quite the life-changing experience, and I never had a "regular" job after that, lol.
One trap we fell into, was being able to "write off" all our expenses which avoided taxes, but we didn't pay enough into SS (who is thinking about that in their 20s, lol) so here we are now, lol.
I started my first business because my employer went out of business. I had the trust of the best clients, and was able to create my own business out of the ashes of the old. So, to answer the OP, in that case I did it immediately out of necessity.
My second business was primarily operated by my ex. My business knowledge, her industry specific knowledge and time. It was about two years before she quite for FT job.
Third business is also a small business operated by my wife. She was always able to work it full-time while my income covered household costs. It took about 3 years until it became big enough to be considered a salary replacement.
I was working in construction for over 25 yrs until 2008 happened and everything came to a standstill. Reading the tea leaves I felt things were not going to get better anytime soon. I didn't want to stay pat and wait out housing market turning around while I was spending my savings on bills. I was turning 50 that year so once again i had to reinvent myself by starting a new business with no experience in my new adventure. I found a partner who had over 20 yrs experience working the service field. We hit the ground running picking up clients during the day while servicing them at night. We were making money the first week doing everything ourselves. By the second month we hired our first crew and things continued from there. I didn't take a paycheck for the first 6 months although my wife was working which helped a lot. I bought my partner out after 6 months. Today I have 3 crews running, with my wife and son also in the business taking a paycheck.
I came across your post regarding your expertise in various industries. I'm actually in the process of considering opening a travel agency, but I'm lacking in actual business experience beyond having a solid business plan in place.
Quote:
Originally Posted by fishbrains
I started my first business because my employer went out of business. I had the trust of the best clients, and was able to create my own business out of the ashes of the old. So, to answer the OP, in that case I did it immediately out of necessity.
My second business was primarily operated by my ex. My business knowledge, her industry specific knowledge and time. It was about two years before she quite for FT job.
Third business is also a small business operated by my wife. She was always able to work it full-time while my income covered household costs. It took about 3 years until it became big enough to be considered a salary replacement.
Given your wealth of knowledge and experience, I'm curious to know your thoughts on whether it would be wise to pursue such a venture in 2023?
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