11 things to consider before you quit your job to start a business...

Originally published in Property Investor News magazine, 1 September 2018

In an age where being an entrepreneur is seen as glamorous and exciting, and is part of the life goals for so many of us, the idea of handing in your notice and following your dreams can be tempting.

But it can be hard to know if, and when, you should quit your job to run your own venture. 

Especially if that venture is in property, at a time when the market is hardly booming, or if your job is well-paid, respectable and/or (at least sometimes) enjoyable. 

From my side, I left a great job, team and company in the City less than 2 years ago, to run the property investment and development company I had co-founded shortly before. 

The market we were focusing on promptly dried up, and has since changed quite dramatically, which has meant shifting our business model since then.

But we have achieved a lot, including developing 60+ units of housing worth ￡8m+, and acquiring c. ￡5m more for our investors, with a pipeline of a further ￡4m, without any seed funding.

It has been a rollercoaster ride. For me, it has absolutely been worth giving it a go, but it’s not for everyone.

I’m often asked, by people of all ages and backgrounds, whether I would recommend leaving a job to run a business, and when the right time is. There really is no right answer: everyone’s circumstances and goals are different. 

But if you’re considering leaving your job, there’s some realities worth considering before you dive in. These are as relevant if you’re 22 and sick of your boss already, or, like 38% of first time founders, over 40 and looking to start afresh on your own terms.

1. It’s hard work, but often more rewarding

Running your own venture will most likely be harder work, with more responsibility. But it can also be more rewarding - not just financially, but in the sense of satisfaction that comes from knowing that successes or wins are down to you! 

More than 70% of workers are dissatisfied with their career, and a major determinant of job dissatisfaction is the absence of a sense of achievement and impact in the workplace. With no layers of management to satisfy, this is rarely an issue in a small, rapidly growing business!

2. It’s risky, and you have to have an appetite for that

There is not much shielding you from external factors or risks which are beyond your control. 

This can affect everything from your ability to pay your own mortgage, to getting hit by unanticipated legal challenges.

There are countless ‘unknown unknowns’. You have to be comfortable with high levels of uncertainty, and constantly seek to identify, minimise, mitigate and manage risks, whether related to political and economic confidence (e.g. Brexit) or suppliers going bust. 

3. Cash flow and liquidity are key, but especially hard to get right

Cash flow and liquidity are key, but hard to get right first time. From setting fee levels, to managing order books and payment terms, whilst making sure you have the readies to contribute to your next investment opportunity or business cash call.

Even if you’ve worked in finance, the chances are that personal cash flow has been relatively simple to organise whilst you’re employed, and liquidity has probably not been your top financial goal.

The reality of running a business is quite different, and it can be hard to adjust to potentially irregular paychecks. 

You need to be prepared both mentally, and also with a financial solution (eg savings) and back up plan for if it all goes wrong.

4. Profitability isn’t the only objective, or measure of success

Short term profit and revenue are not the only goals, or measures of success, for a multitude of reasons. 

Indeed, financial performance by traditional measures can seem almost irrelevant for some business models, in the early years.

5. Many business founders take a pay cut (but it doesn’t always matter)

The statistics suggest that the majority of founders take a pay cut in the first few years (especially if they were doing well financially before). And it often doesn’t matter. 

There’s several reasons for this - from combining business expenses with life expenses, to playing the long game. 

Rarely does an opportunity offer huge returns in year 1, sustainable business growth and substantial upside potential, in the real world. 

And there’s no shame in taking a real pay cut to follow your dreams, if you need to!

6. It’s a constant learning curve, and you have to love and learn from the challenges

Running a business is a constant, and challenging, learning curve.

As a business owner, you have to be prepared to be out of your comfort zone most of the time, with no guarantee of ‘success’. 

You need to have a lot of energy and be ready to take on the many challenges, from mundane (often!) to glamorous (less so).

A ‘growth mindset’ is key. This means working hard, being dedicated, and appreciating learning experiences, even when they come from failures and problems.

You also have to strive for growth constantly: opportunities for ‘coasting’ are rare. 

7. The problems keep coming

All businesses face issues, this is inevitable and normal. 

You have to deal with and take responsibility for all manner of problems, no matter what their origin is, or whose ‘fault’ they are. 

You can always learn from errors, and failures, and have to accept that they are part of the package. 

8. There’s no room for perfectionism 

You have to be flexible, self-aware, and honest with yourself, and to accept that you won’t be perfect first time. 

If you wait till the market, your product or your team is perfect, it will probably be too late. 

It makes more sense to move, the review progress and pause, pivot and persevere with specifics, once you have some feedback from the market.

If you’re used to being right first time, this can feel like quite an adjustment!

Further, the market and regulations shift, so what worked yesterday might not tomorrow. 

This has been particularly evident in the property market over recent years. 

You may have to swallow your pride and shift your model several times to keep up.

9. It doesn’t matter what people think

Some people will love you and what you do, others might not. 

If you worry too much what everyone thinks, it can be hard to sleep at night, or act on your ideas.

You’ll never please everyone, all of the time, and that is fine!

10. It can be lonely; you need support

Even with a great team, product and client base, starting and running a business can be lonely! 

It’s important to have the right support around you, whether a business partner or a mentor, and to focus on maintaining a strong and positive mindset. 

11. It’s a rollercoaster, and you won’t be in control all the time

You won’t be in full control, most of the time.

Running a business can feel like a rollercoaster ride: exciting and scary; up one minute, and looping round faster than your eyes can follow, the next. 

If you can take energy from the highs, lows and learning curve, rather than feeling defeated or terrified when issues arise, and if decide you love the thrill, you won’t want the ride to stop! 

Having left the comfort of a City job, to run my own venture (well, a few), I can confirm: the realities are far from the media-led vision of glamour and success. But it’s certainly been worth trying, for me. 

Over the years, I’ve spoken to many with entrepreneurial dreams, which they wish they could explore further. 

My view is: if you still have a genuine desire to run your own business, it’s always better to try and risk failure, than to live with regret. 

Ultimately, you’ll never know ‘what if’ unless you try!