This can be one of the most perplexing and difficult decisions you have to make as you decide to create a business. Here are some questions to ask yourself that may help you to come up with the right decision for YOU.
Obviously, there is no "one best way" to enter self-employment. The choice you make on how to do it will most likely depend upon your current state of affairs: your employment situation, your tolerance for risk, your family size and makeup, and your ability to take care of your financial obligations with or without a regular paycheck.
There is some wisdom in not rushing things at the outset. Quitting your full time job and putting your loved ones at risk can be a very scary proposition. If you lose your medical and life insurance coverage, will you be able to afford these new out-of-pocket costs? How long will you be able to last if your daily and monthly living expenses come from your savings account?
Who will make the house payment, the car payment, and buy groceries until your new business begins paying off? Will your wife have to go back to work to help support the family? Or will her current income be enough for you to live on until the business gets going?
What if you get into the daily operation of your business and find that you really aren't happy with what you're doing? Or that you can't generate the amount of revenue you need in order to justify staying in business? If your new business was forced to close its doors, would you try to find another job in your field or search out another new business idea?
On the positive side, full time business means you will have more time to spend on your operation, it should reach profitability sooner, and you will grow your clientele faster. Also, you will be available during the day to talk to customers and supplies. Sometimes too, part-time owner operated businesses are not taken seriously by lenders and distributors.
The cons of beginning a business as a part-time project include not having sufficient time to really work the business as it should be done, the drudgery of coming home from a hard day's work only to be forced to put in more sleepless hours on top of it, unnecessarily lengthening the time until the business becomes profitable, and not being able to deal with important communications during the day time business hours. Stress and burnout also often become major issues, since family and leisure time are often sacrificed on behalf of the new part-time business needs.
You will have to make the decision on how best to get started by reviewing your own circumstances, the projected time it will take before income will flow from the business, and how much savings or reserve you have at your disposal to keep you and your family solvent.
Before you decide, here's a tip: involve your spouse and family members in your decision from the outset. They need to understand the commitment both you and they will have to make, and the resulting sacrifices that may result. They will be in a better position to be supportive and understanding of your time constraints if they buy into the decision.
Just one other important question: if you begin on a part-time basis, how do you know when it's the right time to quit your job and go full time?
Here's my feeling. Wait until the pace of your new business causes you to lose sleep many nights in a row. If you have enough demand that you can't fill all the orders without losing a lot of sleep, you will probably be at a point where your business will support you as it continues to grow.
One of the reasons why I am so high on the Lone Wolf business strategy is that the costs to entry are very low (hence the risk is low), the demand and time to fill it can grow together, and you will be able to dictate the point at which you transition from part-time to full.
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