When to Quit your Job to Become an Entrepreneur
Karen Klein at Businessweek.com compiled answers on a question from a reader who wants to know when the right time is to quit one’s job. The reader wants to open his or her own business. Various experts on entrepreneurship have different ideas. A business coach from New York advises to “wait until their new venture is generating about two-thirds of their full-time income before they quit their day jobs”. A lecturer at the University of Pennsylvania’s Wharton Entrepreneurial Program, however, disagrees. He believes entrepreneurship is a full-time endeavor that needs the entrepreneur’s full attention. Phillip Moorcroft, a business consultant in Toronto, shares this opinion. He says, “At the end of the day, entrepreneurship is a do-or-die decision. Either you do it or you don’t—that’s it.”
Therese Prentice, a women’s business coach in New York, reflects the common wisdom that would-be entrepreneurs should not leave their day jobs until they have proved their business ideas will pan out. She says she never advises clients to preemptively resign their full-time employment, even if they have capital lined up to start a business.
“You have to test everything, so allow yourself the space to plan, do, and review, while you still have full-time employment,” she says. “The confidence you desire will be reinforced as you have success with testing your ideas and gaining high-paying clients.” She suggests that aspiring entrepreneurs wait until their new venture is generating about two-thirds of their full-time income before they quit their day jobs.
Patrick K. FitzGerald, a Wharton Entrepreneurial Programs lecturer at the University of Pennsylvania, disagrees. “People can smell a half-baked entrepreneurial concept. Potential investors, partners, and employees know when someone has got one foot in and one foot out” of the business, he says.
FitzGerald, who co-founded Recyclebank in Philadelphia in 2004, believes entrepreneurship is so all-consuming that it is impossible to pursue on a part-time basis. “There is no hedging your bets with entrepreneurship. You’re either all in or you’re daydreaming. Making peace with that is the first step” to owning a successful business, he says.
Phillip Moorcroft, a business consultant at MGPS in Toronto, says pursuing entrepreneurship part-time can crucially lessen the psychological and financial resolve necessary to succeed. “Going in with the Plan B mentality—”I’ll try this for six months and if it fails, I’ll go work for my uncle”—is not workable,” he says.
There’s no substitute for risking everything, and having everything to lose, as a strong motivation for success, he says: “At the end of the day, [entrepreneurship] is a do-or-die decision. Either you do it or you don’t—that’s it.” …
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