So you’re set on quitting your job in favour of being your own boss – but what now? How do you actually decide the best time to hand in your notice, and what exactly do you say to your boss?
Timing is everything
It’s probably not the best idea to slip your resignation letter on the manager’s desk the morning after your ‘eureka moment’. A lot of research and planning will need to be put into your business before you can even think about giving up the 9-to-5 routine, and more importantly, a monthly salary.
Continuing to earn while you’re planning the business will allow you to save up some cash to act as a buffer. That way you’ll be able to focus your attention on the business rather than worrying about next month’s gas bill.
Tina Jesson was putting away half her salary for two years before quitting her job to set up property development company Home Stagers, so she had personal income to cushion her through the first year of the business.
Jesson spent two years researching and planning. Her move from employee to business owner was a gradual one. “I was spending about 30 hours a week on the business. I told my company that I either wanted to go part-time or leave, and I guess they thought that by allowing me to work part-time they could keep my skills for a while.”
Before you make that leap to self-employment, get as much done as you possibly can, and make sure that you have enough cash to support yourself and your business until it becomes sustainable. You may have been using your spare room to sell a couple of items a week through your website while you were working, but if you’re going to make a living out of it, perhaps you need to think about commercial premises.
You might also want to use this period to prove the business model, for instance through an eBay shop or some other form of e-commerce selling and marketing. Potential investors will have far more confidence in an idea that’s been tested.
Ask yourself if your revenue predictions are accurate too. If you’ve budgeted for selling more than is realistic, you could find yourself in a tight spot when your last pay cheque gets used up.
“You should have some idea of at least two or three potential customers who can provide the beginnings of an income stream,” says John Lees, author of How to Get a Job You’ll Love.
“Only when you get customers saying ‘yes’ to your offer should you really consider making the leap.”
Jeremy Martin, co-founder of men’s health drinks brand For Goodness Shakes says he and his business partner Stuart Jeffreys did as much work as possible while still in full-time employment, but eventually you need to make the move. “It was definitely the right thing to do,” argues Martin.
He adds that cutting the cord ‘commits you 100%’. “When you make the leap, it’s surprising how fear gets you working harder and more committed than ever before.”
Breaking the news to your employer
If your business is going to compete with the company you work for then you probably won’t mention it until you’ve handed in your notice, if at all. “It’s best to say as little as possible if you’re becoming a competitor,” says Lees.
However, if you are likely to compete with the company you work for, you need to check your employment contract carefully for competition clauses, notice periods or anything else that could cause legal problems if you decide to start your own business.
If there’s nothing threatening in your contract though, and your employer’s biggest worry is losing your skills, it can often help to talk about your idea.
“Thank your boss for his of her support,” says Lees. “Make it clear that you are leaving for entirely positive reasons. Your previous employer could be in a position to refer you new business, so if you can, be as clear as possible about what you plan to do.”
When Liz Jackson left her employers to set up Great Guns Marketing they actually provided her with a few days’ worth of work a week, which gave her crucial income while she was trying to win new clients.
The lesson here is don’t burn your bridges. You may hate your job but biting your tongue and holding back on delivering a flurry of home truths may prove more fruitful than giving your boss a piece of your mind.
There are just as many risks as rewards when setting up your own business but if you plan your exit carefully, you may just manage to tip the balance in your favour.