When you’re planning to quit your job to start your own business, it’s just as important to cut down on your monthly expenses as it is to save up money. After you hand in your resignation, most likely there is going to be a period of time when you’re running lean as you get your business established. This period might last a few months or a few years. For some entrepreneurs I’ve interviewed, it’s taken longer. That’s just the nature of the entrepreneurial game, so you need to be prepared for it.
Truth be told, you don’t step out of your miserable 9-to-5 environment to find yourself sitting on a lily pad in the midst of lots of sunshine, rainbows and roses (a.k.a. customers, clients and money). But you already know that, right?
The life of an entrepreneur is an uncertain one. It’s like living paycheck to paycheck when there are no paychecks. Most of the time (especially in the beginning), you might not have a clue where your next dollar is coming from.
That’s why it’s a good idea to get clear on what you truly can’t live without during this period (in your life and your business) and what you are okay with giving up. If you’re currently working a job, you might be used to (and quite comfortable) with grabbing your morning $6 Starbucks, going out to eat several times a week, and paying premium prices to have all the TV channels known to man. You might even cringe at the notion of cooking for yourself, disconnecting the cable TV or giving up your comforting Grande skim milk vanilla latte that’s been your only salvation in the A.M. for the last few years.
It’s important to get clear on what you really need and what you don’t need BEFORE you quit your job, so you can seamlessly transition into self-employment without feeling shocked or deprived (or going broke).
A great way to get clear on what your monthly expenses will be after you quit is to fill out a chart like the following:
Nice to Have
When you fill out the chart, be honest with yourself. What do you really need to run your business? What do you have to have to live your life? Try to overestimate instead of underestimate, because your expenses tend to always be more than you think.
Making the choice to give up things that have been a regular part of your life for a long time can sometimes feel like a stretch, but you have to keep focusing on the light at the end of the tunnel. If you get to wake up every day to do work you absolutely LOVE, set your own schedule and be your own boss, then you might actually not even need all that gourmet coffee, expensive food or cable channels, because those thing were just there to cover up the misery you felt living in a cubicle of unfulfillment and mediocrity. Or maybe they’re “Must Have’s”. You decide.