One question many entrepreneurs ask is about how they can know when it’s time to leave their current job to pursue their dream. They have a great idea for a new business or career but feel trapped in their 9-5 job. At what point should they take the risk and leave the security of that job to begin something new?
I’ve heard people call into the Dave Ramsey program asking that question, and his answer is always the same. Make sure you’ve got the boat close enough to the pier so when you do step into the boat you won’t fall into the water. Great advice! In other words, be patient. Protect your own financial security by keeping your job while you work your dream job part time until you know that it’s going to succeed.
The Wall Street Journal writes that three out of four start-ups fail. Some studies indicate the number might be even higher. No matter how great your idea might be, there is a good chance that it will fail. Why would anyone want to jeopardize their financial security and that of their families by jumping too quickly into something that statistically has a low chance of success? It makes much more sense to begin slowly, testing the waters, and then moving gradually into your dream career.
Let’s assume you do make the jump and begin a new career or start a new business. How quickly should you try to grow that business? Again, the answer is slowly. You don’t want to outgrow your cash. Remember the previous blog post on how cash is king. Some small businesses outgrow their cash, assume a lot of debt to continue their growth, and when the growth ends they find they are still carrying a lot of debt that becomes more difficult to pay back.
You also don’t want to outgrow your people resources. It takes a certain number of people, and the right people, in order to provide the quality service you should want to provide. A small business cannot hire all those people at once, and if you try it’s likely you’ll hire some real clunkers that will cause you more trouble than they’re worth. Hire wisely and grow your business based upon the number of people in your company who can handle that growth well.
You don’t want to grow your business larger than your own leadership abilities. Some people can lead a company of 500 people. Others will struggle to lead a company of more than 20. It’s important to know your strengths and limits and plan accordingly. Of course, you can hire people who are strong in the areas where you are weaker, and you should, but as mentioned above, you can’t hire all of them at once. Grow your business at the level you can effectively lead. As you bring more good leaders on board you can then grow the business larger.
Whether you want to begin something new or grow your small business larger, the key here is to move slowly. Going slowly will lead to sustainable growth which will be better for you and for your company.
For more on starting and growing your small business I highly recommend Dave Ramsey’s #1 New York Times best seller EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches.