At what point should a budding entrepreneur with a side business go “all in?”
The following answers are provided by members of Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. When the Worst Angle of the Business Is Still Pretty Good
I have this theory that applies to both romantic relationships and businesses — the worst part of this needs to still be fairly good. If you can’t handle a business at its lowest point, then it’s not worth your time to invest in it full-time. You need to be passionate about the product to stick with it and to encourage others to follow you through your passion.
2. When You Become Only Mediocre at Both Jobs
I was in this position when I started my first business. I had a great full-time job at the age of 24, but I always wanted my own software company. I needed my full-time job to make ends meet. I kept both going for about 14 months before I was getting really burned out — and my performance suffered both at work and with my venture. It was obvious that it was time to fully dedicate to my business.
3. When It’s Too Risky NOT to Do It
You should go “all in” when you have an opportunity for success and it’s just too risky not to do it! Too often we assess the risk of doing something. Challenge yourself to assess the risk in not doing it. This might be before your side business is producing a living wage. Yet, if you believe in it and the chance to create and grow is in front of you, that’s when you go all in.
4. When Everybody Is Ready for You to Step Out
I recently stepped away from a company I built and grew over the last decade. I had a side business speaking and coaching. I stepped away from my original business and went all in when I knew my team was ready to run without me. They now run without me and run it better without me. The correct leaders are in the right places, empowered and writing the next chapter of our company story.
5. The Second You Find That Thing You Love
People running side businesses should immediately recognize that in order for something to truly be successful, it’s going to take 100 percent of their being. “All in” should happen the moment they realize that they would rather be doing this new thing rather than the other. To me, the decision to be an entrepreneur isn’t about finances; it’s about passion/risk on a well-calculated plan.
6. When It Makes Financial Sense for Your Individual Situation
It’s a lot easier to take the leap when you have no bills, no kids, no mortgage or any real obligations to attend to. If you have a side business that is making you enough to survive, then take the leap. If you have bills, expenses and other people that you are responsible for, then focus on sales to break even in your business to then quit. Do not quit without any income coming in!
7. When It Becomes an Obsession
At some point, if the idea is right, the entrepreneur will get to a crossroads where the venture is keeping him/her up at night and that is the only thing that they are able to think about. This is when you need to make the leap.
8. As Soon as You Can Support Yourself
If you can lower the cost of living to a rate where you can reasonably support yourself on your side business without having to burn through savings, then you should go all in. That might mean not going out to restaurants for a while, or eating frozen meatballs every day for lunch (what I did), but it’s necessary in order for your business to succeed.
9. When It Consumes Your Thoughts
It really comes down to passion. When what you’re doing on the side is taking up the majority of your thoughts and you start wishing that your side business isall that you need to focus on, then it’s time to go all in. Going all in takes a lot of courage, but for an entrepreneur it’s a bigger risk to stay where you are than to not make the jump.
– Carl Dorvil, Group Excellence
10. Right Now
If you are waiting for that right opportunity to go all in with a side business, you do not have the ideal mindset to be a successful entrepreneur. Successful entrepreneurs have incredible tolerance for social risk taking, and don’t need things to be perfect to get started. The time is now if you are on the fence to jump in and make it happen. Stop thinking and go all in right now.
11. When You’ve Calculated Your Equation
When I started ShareFile, the biggest first goal for me as an entrepreneur was to find the product market fit. From there, you have to figure out your go-to-market strategy and know what your cost and revenue are going to be. Once the math actually works, you have a path to do more and more of that in the future.
12. When You Decide You Want to Be an Entrepreneur
Having a side business as a hobby or to help get some extra money is much different than being a full-time business owner. Before you go all in, you have to ask yourself if you want to be an entrepreneur. If that is your goal in life and you want to work for yourself, JUMP IN! If you like having a side business and not the stress of doing it full time, it may be too soon and it’s better to hold off.
13. When You Have 3x the Savings
If the only thing keeping you from going all in is the illusion of stability that your day job gives you, then calculate the savings you’ll need until your side business makes you enough money. Multiply that by three (because it always takes longer than you think to make a decent profit, and you want to play it safe). Then, once you’ve hit that savings goal, go for it. You’ll be ready to go all in.