By quitting before you have financing in place, you risk running out of resources before you can even launch a business. If you are looking for financing, here are some options to consider.
3) Is your business running?
In an ideal world, you would quit just as your business is ramping up and generating revenues. You replace your job’s salary with a salary from your startup.
Obviously, the only way to accomplish this goal is to run your business while you have a job. However, this approach is difficult and, often, impossible. At the very least, try to do most of the pre-launch or launch work while you are employed.
4) Create a budget
Quitting your job to launch your startup means losing your source of income and, for most people, having to live off your savings for a long time. Having a budget helps you succeed.
Most people don’t know how to create a budget. Often, they just write down expenses and categories as they remember them. Creating a budget by tracking expenses manually though a spreadsheet is difficult and prone to errors.
Fortunately, there is a better and easier way.
Buy a personal finance package such as Quicken. Upload three (or more) months of past data from your savings account, checking account, credit cards, investments, and any other financial accounts. Most financial institutions have this data easily available.
Review every entry and categorize it. This last point is important. Once you have done that, spend the next three months uploading your income and expenses as they happen. Upon completing this process, you will have six months of actual spending data categorized.
Use this information to analyze your expenses and create a realistic budget.
5) Save enough money for living expenses
Once you have a budget, the next step is to determine how much money you need to save. Look at your revenue projections and determine how long it will take your business to replace your salary. Keep in mind that most initial revenue projections are wrong. Be conservative and allow for a longer period. From personal experience, I believe that doubling the estimated amount of time is appropriate.
The risk of short-changing your savings is that you could run out of money before your startup has had the chance to fully develop. That outcome would leave you with limited income and could risk your ability to stay in business.
6) Do you have an emergency fund?
Having an emergency fund, separate from your budgeted living expenses, is advisable. Its purpose, as its name states, is to cover emergencies. Building this fund is not always possible and is difficult. Building an emergency fund takes time but it adds security. On the other hand, not building one lets you move faster. It’s a hard decision – a calculated risk that only you can determine.
7) Remember medical insurance
One big mistake that many founders (especially young ones) make is dropping health insurance. They see it as expensive and unnecessary. Unfortunately, everyone is susceptible to medical problems or accidents. Without insurance, a single incident (e.g., a car accident) could wipe out your health, finances, and business.
If your former employer offers it, get coverage through Cobra. If not, buy insurance through the private marketplace. Lastly, if you decide not to get regular insurance, consider catastrophic insurance. As its name implies, it covers you for expensive catastrophic events.
Making the Transition
Once you have completed your preparations, the next step is to make your transition. The following steps help you approach this phase professionally.
1) Keep your business private
I always recommend that entrepreneurs keep their business private. Don’t boast about it to your colleagues, and certainly not to your boss. Obviously, don’t lie if asked directly. Otherwise, avoid the subject altogether.
This strategy serves two purposes. First, your company could fire you if they think you are running a business on the side. Second, your co-workers might believe that you are not carrying your load at work. Obviously, this impression could also lead to employment problems.
2) Write a positive resignation letter
Write a proper letter of resignation. Keep in mind that this letter will go in your personnel file. It’s best to write a short letter that advises your employer of your resignation, wishes them well, and thanks them for the opportunity.
3) Resign with class
To resign, schedule a meeting with your supervisor and deliver your resignation letter. Let them know that you will be leaving on a specific date. Lastly, reiterate your thanks for the opportunity and wish them well. Consider:
Mentioning some of the positive highlights of your career at the firm
Highlighting that you will miss the firm and your colleagues
Offering to train your replacement
At all costs, avoid speaking badly of your workplace or your coworkers. Adhere to this rule even if you dislike both. Bad-mouthing colleagues is not only bad form but it is also bad for strategic reasons. Your co-workers and boss will remain valuable contacts throughout your career.
Lastly, do not mention that you are leaving to launch a company. As mentioned before, this approach can backfire. If possible, deflect the question by answering that you are pursuing new opportunities and are unable to talk about them. Most colleagues respect that answer.
About the Author
Marco Terry is the managing director and founder of Commercial Capital LLC and Commercial Capital LLC (Canada). He provides invoice financing to small and midsize companies that need working capital. For more information, please call (877) 300 3258.
* This author originally appeared on Steamfeed.
SHIFTing Gears: Steve Sax Trades Home Runs For Start-Ups
After a successful career in Major League Baseball that spanned 18 years and included two World Series Championships, Steve Sax could have sat back and enjoyed the spoils of retirement, but that’s not his style. Success as a baseball player was only one of Sax’s dreams, and as soon as his “retirement” began, he dove head first into entrepreneurship in hopes of checking off some of the rest of his list.
Sax has always turned his passions outward, so his start-ups have focused on helping others start up their own businesses. After a successful post-baseball career in investing and personal banking, Sax decided to use those talents to branch out and power his own companies and efforts. “There comes a time in your life when you want to give back and help other people, and I’m in a position to do that now.”
After looking back on his life experiences, Sax realized that, along with the drive to succeed, his triumphs aligned with his attitude. When he was motivated and empowered, he achieved his goals. The ability to have some control over his own success led to the publication of his book, Shift: Change Your Mindset And Change Your World.
Sax no longer wanted to just interact with people. He said,“I decided to write the book because I wanted to make an impact on those I came into contact with.”
Sax is firm believer that people can be successful in everything, including entrepreneurship, by starting with a great idea, the right attitude, and a solid work ethic. That’s what Shift is about. “They need to find out what dwells in their passion center,” he said. “People who love what they do are usually very successful.”
The book goes into detail about how attitude and the decisions that entrepreneurs make on a micro level play into the impact that they can have on the macro scale. Sax added, “Writing down goals, starting your work day by 6 a.m., not giving in to fear and doubt, amongst others, are all staples in the foundation of success.”
The dedication to this cause is part of Sax’s bigger desire to reach out and grab the things he wants to achieve in his life. “I have a lot of goals, still,” Sax said. “I’m 54 years old, but I feel like I’m 25.” His youthful vitality drives him, and he capitalizes on that every day to practice what he preaches. After the book’s success, Sax used his experiences empowering adults and rededicated it to you
ng people with an emphases on at-risk youth. In early 2014, the Steve Sax Foundation was born. The goal of the operation is to redirect potential future leaders to positive pursuits using mentor coaching and guidance.
Sax strives to ensure that every young person who could benefit from the mentoring program gets the chance to experience it. “We’ll be mentor coaching tens of thousands of young people across the country. That’s the goal. Through the great sciences of technology and the internet, we’re able to bring about as many teenagers as we can possibly sign up.”
The Steve Sax Foundation uses the internet as a way to reach a larger number of young people. The 6-month program is delivered to mentoring participants via online sessions for the masses as well as in-person to smaller groups. Through the coaching, they watch a fellow participant explain a struggle and work through it with a mentor. Sax said that the experience is valuable for the young minds because it helps them establish a sense of perspective on their own struggles, as well as those in the world around them. Through the coaching, young people can understand that other people have very similar concerns and barriers, and they can find solutions together.
The inspiration for the coaching program was actually a fusion between the success of his book as well as Sax’s own experience in counseling. After going through a long divorce, Sax was referred for 10 counseling sessions to ensure that he was properly managing the emotions of such a potentially destructive process. Sax said, “I went to my 10 counseling sessions, and it was just an open forum of a men’s group where they just sat in a circle and talked. You could just listen, and join in if you wanted. I went to the 10 sessions, and I got so much enrichment from listening to these very smart men talk about their lives and what was going on. I wound up going for 12 years on my own because it was so good, and I got so much growth.”
This kind of growth is what Sax hopes to offer teenagers. Once they have completed the mentoring program, the participants become eligible for college scholarships. He wants all of the participants to be college-bound and open themselves up to achieving all of their goals with every resource possible.
Sax said that the funding for the scholarships will come from sponsors as well as individuals who believe in the program. They hope to partner with major sports organizations that have outreach programs to receive additional support. In fact, of the donations that they receive, 90 percent go to the students in some capacity, and Sax doesn’t take a Salary. His time is on a volunteer basis.
As far as what’s next for Steve Sax and his incredible desire to achieve, he said that right now, the foundation is the most important thing to him. While he does have other projects and positions including working for MLB network radio and television as a baseball analyst as well as engagements as a speaker and executive coach, Sax is laser focused on the foundation for the years to come. “We’re continuing to make our production better,” he said. That includes a new website, guest coaches, bigger sessions and more.
Aside from the growth of the foundation, Sax did name one important thing that he hopes to experience over and over through his program: “The look on those kids faces when we hand them a check for $100,000 and say ‘Pick the college that you want to go to.’ That’s a pretty powerful thing.”
Young people from throughout the country could have the benefit of new direction from what Sax has pulled from his experiences. Sax made the conscious decision early on that nothing would stand in the way of his goals no matter whether they were entrepreneurial or philanthropic. He has built a portfolio of entrepreneurial pursuits that rival his baseball career in both magnitude and success. “It all starts with attitude and perspective,” he said. “How you approach the situation sets the trajectory.”
More information about the Steve Sax Foundation and their passionate dedication to the youth of American can be found at www.stevesaxfoundation.com. The curriculum for the mentor coaching comes directly from Steve Sax’s book, Shift: Change Your Mindset And Change Your World, which can be purchased here: https://www.amazon.com/Shift-Change-Your-Mindset-World/dp/1599322234.
Life Lessons Successful Leaders Wish They Had Learned Earlier
By Brigette Hyacinth
“Wisdom is the principal thing; therefore get wisdom. And in all your getting,get understanding” (Proverbs 4:7). Wisdom is a good purchase, though we pay dearly for it." ~Dutch Proverb
In climbing the ladder of success we will soon realize there are some things, we would have to learn on our own . "We don’t receive wisdom; we must discover it for ourselves after a journey that no one can take for us or spare us." ~ Marcel Proust
I would like to share these 6 valuable life lessons from successful business leaders. I hope it will enlighten your path and hopefully prevent you from making the same mistakes.
1) Spend More time away from the office. Spend More time with Family.
David Kim, CEO of the investor consortium that operates chain restaurants was motivated to succeed so he could support his parents. But at his father’s deathbed, he re-evaluated his success and realized in his efforts to do everything for them, he missed a key point: precious time with them. "I regret not spending enough time with him, especially before he was going to go," His epiphany led to him spending more time with his wife and children.
2) Take Care of Yourself.
Take Care of Yourself - “I wish I could go back and tell myself, Arianna, your performance will actually improve if you can commit to not only working hard, but also unplugging, recharging, and renewing yourself.'' Arianna Huffington
I had a close friend who worked non-stop. He was always “plugged on” and wouldn’t even take vacation. He was diagnosed with cancer, took retirement and died shortly thereafter. Sadly though, he never got to enjoy any of his retirement earnings. Our bodies are not machines. You can’t keep going 24/7. The lights won’t always be green. If you don’t slow down, sooner or later, you will come to a red light and have to make a complete stop. That’s why it is important to: Eat Healthy, exercise, drink lots of water, reduce stress levels and get adequate rest. Furthermore, get rid of toxic emotions. Life is too short.
3) Take time to Listen.
Communication is a two way street. Paul Bennett, the Chief Creative Officer at IDEO said the one piece of advice he wished he had known in his early twenties, was to focus on listening. Effective leaders learn that it is important to put aside distractions, to stop multi-tasking, and be truly “present” with people when speaking with them. Listening is a great time and money saver. It can solve a host of problems, bring creativity, give insights and not to mention show people that you care.
4) Surround yourself with Great people, Leaders in your field and be Fearless in pursuit of game-changing ideas.
Scott Weiss: "Whatever vocation you decide on, track down the best people in the world at doing it and surround yourself with them. Aim high and be ridiculously persistent. Bill Ready: “Be Fearless. Don’t be afraid to pursue revolutionary ideas, and don’t hold back simply because you’re going up against seemingly unconquerable competitors in your market space. At Braintree, many of our competitors are huge, established companies in the market with market caps in the billions--but we’re not afraid of going after them.”
5) Money will never define you; You define your money.
Suze Orman - “When you are starting out in your 20s, it is natural to think about all that you will have and do once you start making money, and making more money. That gives money way too much power over your life. It's not about how much you make, but the life that you make with the money you have.”
In the end, we have to accept these are all material possessions and we can’t take any of them with us when we leave this world. However, people will always remember your character and how you treated them, so spend some time developing priceless attributes as integrity, honesty, empathy, kindness…etc.
6) Giving Back.
Bill Gates: “Ideally people can start to mix in some philanthropy like Mark Zuck
erberg has early in his career. I have enjoyed talking to some of the entrepreneurs about this and I am impressed and how early they are thinking about giving back – much earlier than I did”.
Those of us who are blessed with so much more, should be thankful and seek to help the less fortunate. Giving not only benefits the receiver but also the giver as well.The fulfillment you get from helping someone else is incomparable. It’s also a universal law. The more you give, is the more you receive.
Which life lesson resonates the most with you?
About the Author
Brigette Hyacinth is a Small Business Adjustor at ScotiaBank. She is a diligent self starter, continuous learner, avid networker, always seeking opportunities for growth and development and relishes a challenge. One thing she firmly believes in is that in the midst of all our accomplishments, we should always find ways to give back to the society / community.
What Is Your Business Worth?
By Natalie Green
There will come a point in time where you as an entrepreneur want to sell your business. The first thing you are going to want to know is what is your business is worth. We are pleased to share this great infographic from the business valuation team at valuator who share with us some great data on recent sales of small businesses.
The information is an analysis of over 700 sales from the business for sale classified website bizbuysell.com and represents all of the public transactions that occur on the market.
To see the rest of all the awesome information contained in this infographic, click here
20 Signs You’re Succeeding In Life Even If You Don’t Feel You Are