If you have been working on a new idea and want to quit your job to take it to the next level, it's time to do some financial planning to make it happen. Here are some tips on forming a plan to get your start-up off the ground.
How much of your living expenses do you have covered?
Before you quit your job and ride off into the sunset, you'll need to have some living expenses covered. Work out how many months of salary you have in savings and how long you can stretch this for before you need more income. (This is where a comprehensive personal budget can some in handy!) Start-ups often struggle to pay wages to their founders for the first year or two so having a plan on how to cut back expenses will give you the best chance to get the project working.
Some start-up providers also find ways to earn income whilst starting up their business, such as by taking high rate/low hours jobs like tutoring.
How much money does the start-up require?
In order to get your start-up off the ground, you might need to hire in some people with skills you don't have or purchase materials to make some prototypes. Work out a business plan to work out how much money you will need to run your company for the first year before you'll be able to access venture capital or funds through banks. If you don't have savings to cover this amount you may need to think about other ways you could finance the amount such as by using your home to access a secured loan or you may be able to liquidise some investments such as shares to pay for the project.
A full business budget will help to you to assess your business money needs.
When you should you quit your job?
Meeting with an independent financial planner can let you plan the best time of year to quit and how you should invest your savings for the next year to maximise their effectiveness. Financial planners can help you review your overall plan and savings strategy to help you get to your start-up plans happening as soon as possible.
Taking time to plan your transition from working in your current role to dedicating yourself full-time to your start-up maximises the chances of your start-up being successful. Make an appointment to speak to a financial planner and start on your journey today.
Share29 July 2015
I didn't used to answer my phone when I didn't recognise the phone number, because I was so afraid of all the calls I was getting from debt collectors. I knew when I sarted having dreams about being chased by debt collectors it was time to get on top of finances. I won't pretend it happened overnight, but I am slowly learning more about how to manage money and how to get out of debt. This site charts my journey with managing my debt and starting to save for my new goal - a new cars! Soon I'll be zooming around in a hot new car.
