The Entrepreneur's Wife

Friday, May 26, 2006

Should your entrepreneur quit their current job?

At some point in time, your entrepreneur will want to quit their current job. What's the right time to do that, though?

Here are some things for you both to think about before anything drastic happens:

i) How many months can you live on your current cash savings, plus whatever income might come in other than from the entrepreneur (your job, other income, such as rental)?

In your entrepreneur's plan, when will they be earning the money that they currently do again? If there's a gap between when your current savings will run out, and when they'll be earning steady money again, then they should re-think quitting their job too soon.

ii) If they leave their current employer, will you all still have medical insurance coverage?

Look into the cost of coverage before they quit their job. If you can afford it- great! But if not, then be sure to save up some extra money for this before they leave their job. You might also want to apply for insurance from the same place that covers you through their current employer, because they'll already have a record of you and a history going.

iii) How much time will creating the business take?

If your entrepreneur can get the new business going in their spare time while still working, this is really the best of both worlds (though you might have less personal time together). If this is possible, then you'll still have the security of the steady income plus the benefits you enjoy, while the new business isn't earning much yet. Once the new business becomes a steady source of income at a level that you're both happy with, then you can revisit whether the entrepreneur should quit their old job. One note is that it might happen that eventually the entrepreneur needs to quit their job to have enough time to spend to properly get the new business going. At this time, look again at your monthly household spending vs. how much money you've got saved up, and ask yourselves whether you'll be able to survive financially for those months or years it will take for the business to generate enough income to pay your entrepreneur a decent salary.

iv) Does your entrepreneur work as a stay-at-home mom or dad?

If your entrepreneur currently does unpaid work, then the issue that you'll have to think about is, 'Do they still have time to do everything they do now?' If they're spending all their time dashing around to swimming, soccer, ballet, and karate, and folding laundry, then they may need to scale back on that-- meaning you may need to take some of it on. If necessary for them, make sure they actually block out time in their schedule for working on the business. This can have the added bonus of helping them focus on family during the non-business time.


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