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Deciding whether to have a sidegig or quit your job? Here's the short (and long) answer.

"Should I quit my job to start my business?" I asked myself that question a lot back when I was gainfully employed.

Roughly five years ago, I quit a pretty solid job because I felt unfulfilled and wanted to build my own thing. I'd already teamed up with a group of people and we were excited to bring a cool concept to fruition. We had it mapped out, but that was about it. I quit, moved, and started up.

Six months later, I had little to no income and my savings were spent. I was living on credit cards, which (spoiler alert) is not a great financial decision.

The business was floundering. The stress, plus fundamental differences between founders, created a relational powder keg. When it blew up, it was almost comically bad.

A little under a year after leaving my job, I left my business. Next came an existential crisis. And that was on top of (literally) not being able to rub two nickels together at times. Oh, and then there was the looming debt. Fun times. It took me years to get back on my feet in a way that didn't require me to get a "normal" job again.

If I did it again, I would still go out on my own — no doubt about it. But I would do things differently. Since I learned the hard way, I thought I'd share a few pointers. And while I'm at it, I'll include some of what the internet and other indie hackers have said on the subject.

The options: Quit or (side) hustle

First off, you're not alone. According to a 2018 survey, 62% of Americans dream of one day becoming their own boss. I'd be surprised if that number isn't higher now. And with 41% of employees worldwide considering leaving their employers in 2021, I think a lot of people are wondering if they have what it takes.

If that's you, your options are pretty straightforward. Of course, you could stick with employment. Nothing wrong with that at all, but I think we can assume that most people in this community want something different. So that leaves taking the plunge and quitting right now, or keeping your job and starting a sidegig.

Should I quit my job to start my business or start my business to quit my job?

Let's assume that you've decided to quit your job. Then the question becomes, "When?" Should you quit your job to start up or start up to quit your job?

No easy answer here — it's a deeply personal and circumstance-dependent question. But let's lay out some basic pros and cons.

Quitting vs. sidegig: Pros and cons

Quitting will light a fire under you because you have no option but to succeed (or find a new job). It also frees up your time so that you can go all-in on your project and grow it faster.

But it also removes your salary, health insurance, 401k, and other benefits. This can be incredibly stressful, particularly as your money starts to dry up. And that, in turn, can lead to compromises, myopia, and diminished quality.

Sidegigs mean you can keep money in your pocket and avoid sacrificing your lifestyle. It also removes the risk, which means less stress.

But time becomes even more scarce, which is a different kind of stress. You'll have less time to work on your project and your limited availability may strain your relationships too.

So both options require sacrifice and some degree of stress. Ah, the joys of entrepreneurship.

Quitting vs. sidegig: Considerations

Ultimately, it'll depend on each person and their circumstances. Here are some factors that you may want to consider:

  • Finances: This is the big one. What does it take to keep you afloat? How much do you have? How long will it have to last if you quit now? More on this below.
  • Time: Speaking of resources, do you have the time for a sidegig? It's a lot like working two jobs.
  • Responsibilities: This is related to time and finances — what are your responsibilities outside of your career? Parents and guardians, for example, may have a harder time deciding to take the plunge, and they may need more in the bank too.
  • Business model: Your business model will have a big impact on the investment needed (both money and time), as well as how long it'll take to break even.
  • Business stage: If you've already got your business going, or if you're thinking about buying one, then the stage of the business will have a big impact on your decision. The further along it is, the easier it'll be to make the jump.
  • Urgency of quitting: Is your job unbearable? Is it an unhealthy work environment? These might be reasons to take the plunge sooner. Your mental and emotional well-being are important.
  • Time-sensitivity of the idea: All ideas are time-sensitive, but some are more so than others. If it needs to happen now, that will impact your decision.
  • Internal knowing: Many might disagree with this, but sometimes people just have an embodied hunch and they have to go for it. I'm all about following intuition.

While you mull this over, you may find it helpful to do a qualitative cost-benefit analysis — what will you sacrifice and what will you gain? There are some other good decision-making frameworks in this post, if it helps.

Tips for those who quit their jobs and start businesses

Get your finances in order

If you plan to quit your job, you'll need to make sure your finances are in order. Perhaps you have passive income or some freelancing opportunities. Or maybe someone has invested in your business or it's already profitable. But if not, you'll probably need a decent amount of savings.

You can calculate how much you'll need by figuring out how many months it'll take you to break even. Make sure to add a little cushion while you're at it, because things tend to take longer than expected. Then look at your bank statements and figure out how much you need in order to support yourself per month. Add some cushion there too. Then multiply them by each other and that's the minimum that you should set aside for your runway. From what I've seen most people recommend a minimum of 6 months savings. Most say a year. And I've even seen three years of savings. Here's a template for runway and cash budget planning that might help.

Validate it

If you're all set financially, make sure your business is ready for your undivided attention. Is it a great idea? Try to validate it before you quit. There are varying degrees of validation so you can choose methods according to how soon you need to quit. Check out my post on validation for more information.

Push the needle

In whatever time you have left before your last day, do everything you can to build (and spread the word about) your business. The further along it is, the better your chances.

Check in with loved ones

And, of course, if you have a significant other or someone who relies on you, have a conversation with them before putting in your notice.

Tips for those who keep their jobs and launch sidegigs

Make time

Just like those who decide to quit will need to take stock of their finances, you should probably take stock of your other resources if you opt for a sidegig. I'm talking about your time and energy, in particular. You'll probably need to put a lot of structure into your life. That means scheduling time for working on your sidegig outside of your day job — usually evenings and weekends. Here's a post on effective scheduling that might be helpful.

Stoke your motivation

To keep your motivation up on those long nights and weekends, try coworking groups like @charlierward's Weekend Club. Or check out this post on boosting your energy levels.

Take a vacation

Another idea I've seen a few indie hackers do is to take time off so that they can go all-in for a short time. Definitely worth considering.

Don't wait too long

And on the flipside of quitting too soon is wanting to quit but never doing it. Trust me, it happens all the time. So decide on a good time to quit, and stick to it. Maybe it's when you have $X saved, or when your side-gig is making $X/mo, or when you consider it validated, or maybe it's just a specific date. Set it and hold to it. Don't keep pushing it further and further away. At some point, you'll have to make the leap.

The short answer: Probably start a sidegig and quit your job later

The short answer is that it depends, but most founders that I've seen (myself included) would advise starting your business as a side-gig first, and working until you hit a specific goal. Usually that would be a certain amount saved or a certain degree of validation. Then go full-time on your project (or part-time along with some freelancing).

Here's what other indie hackers have to say on the topic — it's a varied response:

It's a difficult (but exciting) decision. Good luck! 🚀

  1. 5

    I wish I had an easy answer to this, it's certainly a dilemma of sorts, but personally I cheated on my way to bootstrapping Zlappo to ramen profitability and beyond:

    I used my unemployment checks + federal unemployment supplement ($600/week, and then $300/week) to allow myself to focus full-time on building my startup.

    Neither leaving your job cold-turkey to start a business nor building a side-gig alongside a full-time job is a particularly-effective strategy for business success:

    1. Quitting and burning savings will lead to unbelievable financial/existential stress, and you start making very poor decisions in your business due to financial uncertainty. There's a whole body of research that shows that poverty leads to reduced IQ, by 2 standard deviations on average. And this doesn't even matter if you have a lot of savings -- the point is that "zero income" will get to you sooner or later. Very few people can mentally handle getting poorer and poorer as the months go by, even if they start out relatively "rich."

    2. Building your side-project alongside your full-time job means that your side-project will move at a very slow pace, and you'll basically be unable to compete, unless you somehow identified a niche underserved market. But even then, it's only a matter of time someone else competes with you for your lunch. There's also no "sink or swim"/"do or die" motivational factor when you're still working in a cushy job. Success at your startup becomes wholly optional, and oftentimes when you're tired or not feeling it it becomes so easy to just procrastinate and skip out on putting in the work.

    3. If you're from an expensive western country, there's another underrated strategy: geoarbitrage. Move to the countryside in Thailand or Vietnam, and keep your burn super-low while you build your startup. That will alleviate some of the financial stress mentioned in 1, but it's still a bit of a gamble, not to mention there's a whole host of mental/physical adaptation costs. Personally I also find that it's a lot easier to become complacent building a startup in low-cost countries, because you hit ramen profitability so easily. If you live in the US or Europe, it's hard to be complacent until you hit $10k MRR or thereabouts.

    So at the end of the day, ideally, you should have a spouse/partner/parent/seed investor/government who's willing to financially support you while you focus 100% on building your startup. That honestly is your best shot at business success.

    1. 2

      Great points! Well said and well thought out 💪

    2. 1

      This is a perfect ideal situation. which rarely exists. So majority of the people will not have this situation. Here is my more realistic take on this.

      1. Keep the job and aim to build on side.
      2. Find a co-founder (virtual or local)
(This will speed up things + give that urgency because you two will be accountable to each other) self-accountability rarely works.
      3. The two of you will share work, cost, risk and stress.
      4. Once you reach a comfortable MRR, Quit the forsaken job.

      P.S. You might NOT want to share 50% with a co-founder. But remember 50% of a biz is better than no biz. All that pain, stress and crisis can be halved or avoided by sharing.
      Then you can build the next biz 100% on you own :) . Surely you don’t plan on just setting up 1 biz right?

  2. 3

    Great read!

    I personally decided to quit my job when we (me and my wife) had 6 months of expenses saved up, plus we knew that my wife was going to start working after this trial period (she was in school when I quit my job).

    It turned out to be great even though I was making less money than my job for over a year after I quit. Working on things which I really enjoyed paid off eventually. 😊

    1. 2

      Nice 🙌 Thanks for sharing your experience, Florin!

  3. 2

    One thing to consider is whether your company has a no moonlighting policy. I recently had to quit my job at a FAANG company as they specifically had a policy in which they would assume all IP and I would have to request permission which would have also been a red flag as my boss expected me to focus 110% on their work so regardless they made it impossible. I know a few folks who sought out easy tech gigs at health insurance companies so they could work after hours on side hustles.

    I think it's another reason not to work at a FAANG company.

    1. 1

      Yeah, that's a great point! Thanks for weighing in. 💪

  4. 2

    Really appreciate the thoughtfulness here, thanks for sharing!

  5. 2

    Brilliant read

    Thanks for putting so much thought into this and for sharing with us

    1. 1

      Thanks! Glad you liked it.

  6. 2

    I have done both and can offer the following:
    With a regular income you easily afford in most case great freelancers who can set a excellent base for you. I have found that those freelancers are specialists who actually complete the tasks better than what I do. I now see regular income as saving time and not wasting time.

    1. 2

      Interesting, so your advice is to keep your job and pay someone to build the MVP? Seems like a great suggestion, thanks for weighing in! 👍

    2. 1

      This is something I've been thinking about. Since I'm a designer by trade I'm either going to have to learn how to code, or hire some freelance devs to help out.

      Keeping my job is obviously important for that, lol.

      Where did you go to find the freelancers you worked with?

      1. 2

        I recommend just learning what goes into making an application. Designing the database, hosting and real real basic coding - so you know the jargon.

        Use no code tools where you can.

        I would then split your planned appication it into the smallest possible components and create fixed price jobs on the freelancing platforms.
        Dont hire an hourly basis or it becomes your problem to manage their time.

        I use the following platforms in the following order now:
        1.) Upwork
        2.) Fiverr
        3.) Freelancer

        The advantage is you can run jobs in parallel and not in series if you were building the product yourself.

        If a project fails you have next months salary to pay for the new project. You ave unlimited runway.

  7. 1

    Great post James! You must have put a lot of research into this.

    We built this for fun recently - a 'Quit Your Job' calculator - plug in your numbers (out and in) and see how long it would take you to get to some of these safety milestones like replacing your salary with revenue or the big 10k MRR goal.

    1. 1

      Sounds like a cool resource! 🙌

  8. 1

    Fantastic and well thought out. I took the route of quitting and working on my business considering many of the key points you listed. One other point that impacted me was the heavy mental toll work was taking on me. I had nothing left in me to work on the side. At that rate I'd never get my business anywhere.

    1. 1

      Yeah, that's a great point! 🙌

  9. 1

    A lot of good advice. Thanks for sharing! I'm going through the dilemma too.

    1. 1

      Good luck figure it out!

  10. 1

    That's a pretty common dilemma. I'm on that now and I've already quit twice. Soon my break-even comes! Thanks for sharing.

    1. 1

      Good luck hitting that break-even! 🚀

  11. 1

    Thanks for sharing! I'm in the same dilemma now.

    1. 1

      My pleasure. Godspeed 😀

  12. 1

    Thanks for sharing, James!

  13. 1

    Thanks for putting together this valuable piece.

  14. 1

    In the same dilemma right now, useful read James. 🙏

    1. 1

      It's a tough dilemma 😅 Good luck!

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