Ideally, a would-be entrepreneur should save at least a year’s worth of salary before quitting a job to pursue an entrepreneurial venture full-time. It’s the savings part that holds most people back, says Peter Daisyme, co-founder of Hosting Inc. The hosting company, based in Palo Alto, California, specializes in helping businesses with hosting their websites.“Fear is the downfall of many businesses before they are actually ever started. You can’t let fear, or not having a sizable nest egg, stop you from pursuing your dreams, says Daisyme. “Investors often ask if you have any other jobs, and what they’re looking for is a hard, honest no. If you can’t give them that, it says you’re not fully invested in your dream,” he explains.
The good news is that there are other ways to generate income or an emergency fund, such as downsizing, he suggests. “Rent out your home, if you own it, and you can break even or make money, and rent out a smaller apartment for yourself. Sell what you don’t need. However, there’s more to this tough transition than funding.”
Here Daisyme outlines some important steps to take when taking the plunge from corporate employee to self-employed entrepreneur.
Manage Your Fears. It’s natural to feel fear when you’re first entering entrepreneurship — or at least uncertainty, Daisyme says. This is why it is important to have a strategy in place. Start by planning months in advance. “For some people, considering every possible worst case scenario, and coming up with more than one solution for each, can be a great help. This can help you see that failure won’t break you,” adds Daiyme. In some instances, people are even afraid of success. “Mo’ money, mo’ problems” and all that.”
Nurture Your Network. “You have a bevy of options available for building your “new” network,” Daisyme adds. “Start joining online networks related to your industry (LinkedIn has a bunch), go to local meet-ups and find out where the big conferences are. The more people you meet, the higher the chance they’ll become a client, mentor, investor or partner. Search out thought and industry leaders and start building relationships.”
Build Skills. Coming from the corporate world, you already have many highly desired skills, but there’s no such thing as too many, says Daisyme. “Start reading blogs, seek out a coach, take courses (online or not) and use other means of learning.”
Make Your Entire Financial World a Startup. You need to do a financial analysis before you start your business. Meaning: What are your startup costs are? What is your overhead? How long before you break-even? Will you need to bring on an investor? “To succeed, seek out great deals, barter, and downsize from your original dream of a brick and mortar place to an e-shop (for now),” says Daisyme. Use the same cost-savings strategies for your personal finances.
Moving from the corporate world to the startup world will involve growing pains, but focus on the growth aspect, Daisyme advises. Also, there will be obstacles—roadblocks up ahead—and success often will take longer than anyone can imagine. In fact, it may take three to five years before your business become profitable. You just have to stay focused and stay the course.
A version of this story appeared on the BusinessCollective, a virtual mentorship program designed to help millions of entrepreneurs start and grow businesses, which was launched by the Young Entrepreneur Council (YEC).