Are you interested in changing careers but wanting to become an entrepreneur? If so, you’re in the right place. In this article, I’ll walk you through the different steps you want to consider when making this change.
1. It’s a lifestyle change not just a job change
When you become an entrepreneur it’s a lifestyle change – not just a job change.
If you're coming from a traditional job, your entire relationship with your work is going to change. In fact, your entire life is going to change.
You'll have the opportunity to create the ultimate work life balance and take control of your destiny, perhaps for the first time in your life.
But you’ll also be strapping yourself into a roller coaster that doesn’t have a charted path, other than going constantly upstream. It's both exhilarating and exhausting but for many people it's the only way.
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2. Carefully design your “on ramp”
When you’re thinking about changing careers from a traditional 9 to 5 job to something entrepreneurial, it’s extremely important that you have a carefully designed on ramp.
If you’ve ever merged on the highway and had to deal with a short on ramp you know how much more stressful that can be compared to easing on via a longer, more gradual on ramp.
It’s the same way when you’re switching careers to an entrepreneur route. Both entries can lead to an epic crash if you’re not careful.
The good news is that a lot of times you can start off as a part-time entrepreneur and do it at your own pace and on your own time.
I’ve had friends go part time on their business endeavors for over a year before committing full-time.
And whenever I made my transition, it was over the span of about 24 to 36 months. So everyone will have their own timeline that works for them.
The key here is patience and realistic expectations.
Remember, most new businesses need 18 to 24 months to reach profitability. Your business might be ahead of the curve but it also might be behind it.
You need to think about how to approach your current employer about your upcoming career change.
In some cases, you may have to keep quiet about it in order to avoid turning off your current employer.
This “in the closet” approach may not be as easy as you think, especially if you’re going to be relying on things like social media and easily searchable Google reviews to help promote your new business.
In other situations, you may have to disclose what you’re doing.
The biggest risk here is that your employer will see the writing on the wall and will preemptively fire you so that they don’t have to put off the situation.
Of course, if your side hustle is not interfering with your work product this is probably less of a worry, especially if you have a good relationship with your supervisor.
But you’ll have to use your best judgment and make sure that you are aware of any legal implications regarding any contracts you may have signed.
If your new business is going to be a competitor to your current employer that might get you into legal trouble so be careful and make sure you are aware of any noncompete clauses.
And regardless how you feel about your current job, don't burn any bridges when you depart. You never know if you might need to turn back even if it is only temporarily.
So navigate this part of your transition very carefully. And remember, once the word is out, there is no going back.
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3. Speed up your learning curve
When you’re thinking about starting something new in any field you always want to speed up your learning curve as much as possible.
But when you’re diving into being an entrepreneur for the first time you really want to do everything you can to avoid spinning your wheels.
That’s because unlike a traditional job, there’s not going to be anyone there to tell you that you are not cut out for what you’re trying to do.
You’re going to have to make that determination yourself and typically you will base your conclusion on the amount of traction that you gain over a certain amount of time.
If you don’t create enough traction or you simply plateau, you will likely hit burnout and your dreams may crash and burn.
Luckily, there are a couple of ways that you can help avoid this burnout scenario.
Find a good course or two
The first is to take relevant courses that can help jumpstart your endeavors.
For example, if you want to get into blogging then consider taking a course that shows you how to monetize your blog or create a brand.
A lot of times these jumpstart courses are not terribly expensive or time-consuming.
What you’re trying to accomplish is learning the fundamentals so that you don’t have to spend months or years figuring them out on your own.
One course is not going to give you all the fundamentals you need but it will help you find the necessary footholds to get going.
Find a good mentor
The second way to avoid burnout is to find a good mentor.
Finding a mentor is not always easy but it is one of the sure-fire ways to expedite your learnings in an industry. Try to find someone who is already doing what you want to do and start interacting with them.
A good way to start that is by commenting on their emails, blog posts, Instagram posts, or whatever type of outlet they output content on.
If you show them that you are sincerely interested in their space and appreciate their content, they will almost certainly take the time to interact with you. (If they don’t, chances are that’s probably not a good mentor for you or it might mean that they offer advice on a paid basis.)
After you build a relationship then you can have the “hard ask” which could come in the form of a direct message where you ask them for 30 minutes of their time.
Go into that 30-minute meeting prepared with lots of good, well-thought-out questions that will help you fill in the holes that you need and you will be off to a great start.
If the conversation goes well and you feel a connection, then make sure they know how much you appreciated their time and plan to follow up with them 3 to 6 months later.
At that point, you want to update them on your progress, continue to pick their brain and do your best to nurture the relationship on a human level.
Rinse and repeat until you have a true relationship with this person.
One of the first questions people have is “What type of entity should I create?” The answer to this of course is that it depends.
You could start as a sole proprietorship, LLC, C corp, S Corp, etc. (the majority of small businesses are run as sole proprietorships or LLCs).
In some states, it's very easy and cheap to create something like a single member LLC where you are the sole owner. You literally fill out a couple of forms, make a payment, and set up a registered agent. Even if you need to create an operating agreement, that can also be done with automated software.
But things get much more complicated when you start introducing multiple owners and potential investors, shares, etc.
If you're comfortable with basic legal principles you can generate the paperwork needed for these things yourself. For example, Clerky is a great software for creating documents for corporations.
But if you have any doubts at all you should involve an expert or attorney. You probably also want to talk to a tax professional about tax implications.
And make sure you are aware of all of the fees that go into forming these entities because they can sometimes add up, especially for corporations.
Don't rush into choosing your entity type but once you get it settled, go ahead and set up your bank accounts for the business as quickly as you can.
If you have good credit, apply for a good business credit card and start segregating expenses for that business.
If you need an EIN you can often get that in minutes.
6. Find out what you need financially to get started
Another big question you need to figure out early on is how much money will it take to launch your new business. And secondly, how will you get that money?
The great thing about online businesses is that they can be extremely cheap to begin with. On the most basic level of creating a blog, you can basically get started for free or for sure under $100.
Obviously, things are much different if you’re trying to set up a brick-and-mortar shop where you might need to get approved for licenses, and permits, and obtain SBA financing to purchase equipment, real estate, etc.
Depending on what you are trying to accomplish, you may or may not need to put together a business plan or executive summary (business plans are always helpful in my experience – even if they are not required).
Another route is the investment route. If you’re trying to build something like a tech startup you want to start thinking about things like SAFE agreements and convertible notes.
Typically, you would probably begin gathering financing from friends and family but some people go right in and approach angel investors once they put together a solid pitch deck.
You could also apply for a respected incubator or accelerator program and if you get accepted you could plan on leaving your job at that time since the program might require just that.
Regardless of which route you take, it would be best if you did sufficient research to determine which routes appeal to you and would be a good fit.
This process of your journey typically takes a few months to really sort out so once again try to be patient and remember there is often not one single “right” way to do these things.
At some point, you’ll need to make revenue projections whether it is for investors, a business plan, or just for your own self planning.
Almost every entrepreneur I have ever met overestimates the amount of revenue that they will generate in the first year – often by a long shot. It’s just something that is really hard to predict.
On the other hand, predicting your expenses is much easier.
Sure, you’ll get hit with things that you never expected but you can allocate some cash for those unexpected events.
But whether you are projecting your revenue or figuring out your expenses over the next 12 months, make sure that you are being as conservative as humanly possible.
This will really help you have a smooth on ramp if you are starting your entrepreneur journey part time.
8. Explore retirement, healthcare options
When you decide to make the plunge into being an entrepreneur, chances are that your retirement and healthcare is going to work a lot differently than it did with your traditional employer.
Make sure you do some research to see what type of plans you can take advantage of.
9. Connect with entrepreneurs ASAP
Once you start going down the rabbit hole of becoming a full-blown entrepreneur, you’ll be amazed at how much you simply don’t know.
When I first got into becoming a digital entrepreneur, I got connected with a couple of groups and realized how little I actually knew about the space.
There were so many acronyms not to mention apps and software products out there to help me accomplish my goals that I quickly became overwhelmed. But by interacting with other entrepreneurs I was able to start piecing things together in a way that started to make sense.
Again, a good mentor helps with this tremendously but you’ll be better off supplementing that with real-world interactions with other entrepreneurs.
10. Figure out your motivation
Making the transition from a standard 9 to 5 job to an entrepreneur can be a daunting task. It can be scary, uncertain, and you will likely face a lot of self-doubt during the process.
So it’s super important to hone in on what exactly it is that is driving you to become an entrepreneur.
For a lot of people, they just want to be their own boss and enjoy the freedoms that come along with that.
But for others the motivation can be more personal or aspirational.
Maybe you just had a child and you want to spend more time with them as they start to grow older.
Or maybe you have an insatiable desire to travel and work remotely.
Constantly reminding yourself about your motivation can help drive you to take care of all of the things you need to in order to get the ball rolling.
Final word
Going forward with a career change to become an entrepreneur is an exciting but also challenging task.
But if you go in with a good plan and remain realistic about things like revenue and expenses, you can have a relatively smooth transition from your traditional job.
Try to do whatever you can to expedite the process by taking courses, locating a mentor, and getting connected with other entrepreneurs that will be happy to help you out.
And of course, remind yourself about your motivation as you work hard to achieve your goals.
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