May 17, 2019

When to quit your full-time job?

Digitalnomd

I work as a software engineer for a large tech company during the day and on my side project during nights and weekends. It's pretty exhausting but I know that I have to do this to build something before I have all the pressure of building something and paying my bills. I also know that I'll never really able to grow a business until it's my main focus.

At what point do you decide to quit your full-time job to pursue your side project?

  1. 6

    I started the same way... full time day job, and worked on my side gig at nights and weekends. Did that for 3 years... it's like holding 2 jobs.

    My side gig was web hosting and web design. Hosting income was a few thousands per month. And eventually, I landed a big web design client that awarded me a big contract (after a smaller test run project initially). This big client (nationally well known organization) eventually got worried that I won't have enough time to finish their project -- and want me to quit my day job and concentrate 100% full time on their project. So, they proposed a guaranteed 12-month contract (signed, etc). The money was very good, like 3 months of billing was equivalent to my annual salary at my day job! (worked at an MEP engineering company.)

    Wife and I talked about it... with 2 kids + a new baby to feed, plus wife + new house mortgage, this was not a light decision to make! But eventually, the pros outweigh the risks. So I submitted my letter of resignation. GULP!!!

    ----

    Well... that was 19 years ago, and I'm still doing web development today, and still working at home full-time. And my original big client, they're still with me up to this day. I did got rid of web hosting when it became a commodity when cheap $3/month pricing starts becoming common, and replaced it with another business.

    Anyway, that's my story...

    I think in your situation, you'd have to weigh your risks vs. rewards. If you're single right now without a family and responsibility (house, kids, wife), then I think quitting a day job will be easier.

    There are also other things you can do in advance to make the money pressure less, like paying off CC debts, car(s) payment, downsizing, saving some money in the bank, etc. So when you venture out on your own, you won't have these expenses dragging down on you.

    When you go fulltime and have debts, mortgage, etc... pay them down as fast as possible! It's so much easier not having to worry about making an extra $3K mortgage payment if your house is fully paid for. At the very minimum, you'd just need to spend on food and utilities.

    Without a day job, and relying solely on your business income, it could also be feast or famine. Some months, you could be making ten$ of thousand$, and other months feel like working minimum wage. You just have to get used to this and not lose your mind over it. Remember, there are no guaranteed paychecks on the 15th and 30th of the month. :) At least, in my case.

    Right now, I'm planning to start a Saas business so I can make some income without the need for billable hours.

    Another tips, don't put all your eggs in one basket. Have multiple sources of income. Even a little bit from each one counts.

    Good luck!

  2. 2

    My wife was working. I had saved up $40k in cash which was 2+ years of surplus, I was about to look for a new job anyway, so I quit.

    The situation is so unique. It's amazing how beneficial yet detrimental the need to make money can be. The pressure will sometimes keep you working and focused and other times will not allow you to make good investments with your company because you're too afraid of losing much needed cash.

    There is a sweet spot though and I found it right about now. My cash reserves are at around $15k and my company is paying for 75% of my bills.

  3. 2

    Everyone's situation is different. I'm saving with a goal of 7 months "funemployment". I like my job but it's not as fun as doing my own thing (and failing). At least that's what it looks like.

    This goal post for me has motivated me to validate my best ideas while I can (2 demanding kids, job, etc) and keep coming up with better ideas.

    This is hard as I'm not one to make bets on my self. But I want to start and see where I can go. There's always jobs in my industry.

  4. 2

    Hello, In my case it is different, I have my own startup with another co-founders, but I am getting boring and I want to create a side projects or being a solo entrepreneur. I am afraid because I don't know if I am a selfish.

  5. 1

    Need more input, but few points to consider:

    1. Get first paying customer before quitting your primary job. This is important. Paying customer is a somewhat validation of your idea/project. Also, think about how you can reproduce the sale. It's easy to sell to your warm contacts (friends, colleagues, friends of friends, etc.), but not so easy afterward. Have a strategy for that.

    2. Do you want to go self-funded way or VC / Angel way?

    3. I don't recommend relying on your savings, but if you're sure you can't grow your business otherwise, then do the calculations. Based on the pricing of your product and how much customers you think you will be able to get, calculate when you will break even. Multiply at least by two. Consider if you have enough savings to keep you afloat through that.

    Hope that helps!

  6. 1

    For me, I prefer to start as a side project.

    When I am confident I can earn enough money to make a living, I will turn it into full time business :)