What To Consider Before You Dump Your Day Job
Seattle Post Intelligencer:
* Work the numbers. Success in your full-time eBay business requires it to consistently generate enough cash flow to pay a healthy salary, health care insurance, payroll taxes, disability insurance and contribute to a retirement fund. You should be able to determine the amount of sales volume that can minimally reach these objectives. Is demand for your products large enough to support full-time expenses?
* Set high standards. In addition to earning a steady income plus benefits, there is another compensation component that is too often overlooked by startup entrepreneurs. Smart entrepreneurs like yourself can work long hours at a business that can generate a steady income, or they can wait until they find an opportunity that can provide a healthy income plus the rewards of owning a business that has tangible value in the marketplace. Are you building a business that one day can be sold off at a nifty profit? Are you building proprietary customer lists, products, a respected brand name or other business attributes that have value even if you are not running the business? In short, don’t short-change your earning potential by setting expectations too low for your entrepreneurial career.
* Look ahead. I frequently run across 20-something entrepreneurs who earn more at their businesses than their friends do in salaried employment. But this can change in 10 or so years as salaried workers advance their compensation and career stature. Will your business keep pace in providing you with growing income and professional career satisfaction?
* Upgrade your day job. Just because you dislike your current day job, doesn’t mean that all salaried employment is joyless. If the economics of your part-time endeavor don’t warrant full-time dedication, then it’s time to update your resume and aggressively look for a more satisfying job. In your longer letter you noted that you are an eBay Silver Power Seller. Your achievements on eBay, plus your work ethic, sales skills and opportunistic nature are highly desirable qualities to top employers.
* Start up with strength. If you decide to work full time at your business, resist the temptation to be impulsive. Strengthen your personal financial position by cleaning up all credit card debt and boosting your credit score. If you ever need a small business loan, your credit score will influence lender decisions and interest rates. Investigate the costs of private health insurance versus the costs and terms of your employer’s COBRA plan. Lastly, save some rainy day money. Divide your savings into funds for your business and funds for personal needs.
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