Buying or Starting a Business? Don’t Quit Your Day Job (Yet)!

We know that buying or starting a business can be a very exciting time in your life, and while you may be tempted to quit your current job so you can give as much time, effort, and energy to this new endeavor, most people shouldn’t immediately bid their current job goodbye. At least, not yet.

Here, we’ll be going over why keeping your job as a side hustle is important and the questions you need to have answered before buying or starting a business.

Why it's a Good Idea to Keep Your Job as Your Side Hustle Grows

A job and a good credit score will help you get qualified for funding

Perhaps the most important reason you should stay at your current job as you’re in the process of buying or starting a business is due to your current income. Your employment status can help you qualify for the financing you need. Most lenders will look at your credit score and history, and the better it is, the more likely you are to not only qualify for a personal loan but to receive a favorable interest rate as well. Additionally, your current income is a critical component in whether or not a lender sees you as a qualified applicant.

“Failing” allows you to fall back into your safety net — your job

Failing is always something you need to consider when you buy a business or start one. Keeping your current job provides you with a safety net of income should something go wrong with your new business venture, and it allows you to take a few more risks and gain valuable skills that can ultimately enhance your career and future ventures.

You’ll have more time to test and validate your business idea

It can take a while to find your business’ target market fit – the right audience and the right product or service they’re willing to pay for. Without the immediate financial pressure that comes with being a business owner, you can take your time to better understand your customer and their needs.

You can more easily stake out a premium position in the marketplace

When money isn’t weighing on your mind because you have still have a steady income from your day job, you’re able to be more selective with the work that your business does and the clients you take on. Thus, you can carve out a more premium position in the marketplace.

You can fund valuable professional development for yourself

Without having to dedicate all of your revenue to marketing and creating a product, you have more resources to put towards professional development opportunities for yourself. This will benefit you and your business greatly in the long run.

You can enjoy professional life much more

If you consider your day job monotonous, mundane, or just plain boring, an entrepreneurial side hustle can add some spice and excitement to your life. The financial security your day job provides and the more creative outlet of learning the ropes and experimenting as a business owner allows you to get so much more out of life.

5 Questions to Ask Yourself as You Buy or Start a Business

1. Have you thoroughly done your homework?

This means more than a general sense that people will want what you're selling. Talk to potential customers directly, look closely at who else is already serving this market and how, and get honest about your actual costs to start and run the business — not just the fun parts, but licensing, insurance, inventory, and the slow months. If you can't clearly answer who your customer is and why they'd choose you, you're not done yet.

2. Have you established a gradual plan for growth?

Rather than treating this as an all-or-nothing leap, map out the specific milestones that would tell you it's time for the next step — a revenue threshold that covers your living expenses, a client roster that's outgrown your available hours, or demand that's consistently outpacing what you can deliver part-time. A plan with concrete triggers takes the guesswork (and some of the anxiety) out of when to go all-in.

3. Do you need to learn any more skills, or do you have all the skills you'll need?

Be honest about where your gaps are — bookkeeping, marketing, sales, and operations are the ones that trip up even talented founders. You don't need to master all of them yourself; a course, a mentor, or bringing in the right partner or contractor can close the gap. The goal is knowing what you don't know before it becomes an expensive lesson.

4. Do you have sufficient savings (a nest egg)?

Your personal living expenses and your business's startup costs are two separate pools of money, and both need a cushion. Many financial planners suggest keeping several months of personal living expenses in reserve on top of whatever capital the business itself needs — that buffer is what lets you make good decisions under pressure instead of panicked ones. If your savings alone don't cover the business side, that's exactly where financing can responsibly fill the gap without touching your personal safety net.

5. Have you built a strong network of support to help you through your journey?

This includes mentors who've built something similar, other entrepreneurs going through the same stage you are, and the professional relationships — an accountant, an attorney, a loan advisor — who can catch problems you won't see coming on your own. Starting a business is rarely a solo act, even when your name is the only one on the door.

So, Should You Quit Your Job to Start a Business?

Buying or starting a business doesn’t mean you have to leave your day job behind right away, but eventually most entrepreneurs find they have to step away to truly focus on making their new venture successful.

Jumpstart Finance's loan advisors can help you find the loan that will work the best for you and your business needs to set you up for success. Submit your inquiry here and connect with us today.