Many people stay their whole lives in jobs they don’t really want to do because inertia keeps them there. to quit your day job to start a new business is a risky strategy, but sometimes the right one. While I recommend that you validate and test your idea as a side hustle first, there is a time when you need to consider going all-in, making a commitment to your business, and make the decision to quit your day job if you want your business to succeed.
Many people stay in their current job as they launch a startup business, but this can sometimes have a major disadvantage: complacency. If you think about it, the average person with a job will not put as much effort into looking for a new job as the unemployed person. The same can be said for a person starting a new business. Aside from the time commitment required to have a day job and launch a startup simultaneously, when you are not 100% committed to earning a living from your startup, you just don’t have the same obligation to make it a success. To improve your startup’s ability to succeed, it may be wise to eliminate the safety net and be all-in by leaving your day job to eliminate your opportunities for a retreat.
When Cortés came to the Americas, he feared his army might take the safe option when faced with fierce Aztec warriors and return to Spain rather than continue to fight.
Accordingly, he decided to scuttle most of his fleet, thereby removing the safe option for his soldiers. Effectively stranded, his army was essentially all-in and had no other choice but to succeed in their goal. They had to either go forward and plunder Aztec gold or die trying. The result was the success of his expedition.
When it comes to debt financing, lenders such as banks and investors generally require a substantial investment from the business owner before they even consider granting any type of loan or investment to a startup. This practice ensures that the debt or investment is secured by the owner’s own skin in the game, which dramatically improves the odds of repayment to the lender or investor.
In comparison, home loans historically required minimal skin in the game from the homeowner. During the turn of the millennia, no down payment or a very small one was required to secure a home loan. As we all know, in 2007, the housing market turned just enough to eliminate the owner’s equity in the property. Since they owed more than the value of their property, many owners simply walked away from their homes. This led to an increase in mortgage foreclosures and an economic downturn.
There is a clear correlation between the degree of one’s negative exposure due to limited escape options and the probability of success. Consequently, if you are operating your business on a part-time basis while you hang on to your day job, perhaps your day job is preventing your part-time business from being all it can be.
When you quit your day job and go all-in personally and financially it certainly forces you to learn to overcome all obstacles and brings out the best in you. While I do not advocate quitting your day job without validating and testing your startup idea, once a successful business model is confirmed, being 100% committed will improve your odds of success through forced learning.
It takes guts to quit your day job and go all-in to launch a business, and it may not always work out as planned. Those most likely to succeed will have thought out their day job exit and saved enough money to bridge the gap until the business generates sufficient profits to replace their day job wages or salary. Moreover, the most successful ventures will have struck when the iron was hot. For many, right now may be the time to consider exiting the rat race of being an employee working for “the man” or “the woman”.
However, success is never guaranteed simply based on your commitment to the outcome. The market must be big enough and customers must be able to be stimulated to buy your product or service. That being said, with a solid business and economic model and by committing yourself 100% to the outcome by quitting your day job to eliminate the possibility of turning back, you can certainly amplify your probability of success.
How committed are you to your business success?