When Is The Right Time To “Burn The Bridges” For Your Own Business

So you have a side gig that is starting to gain some traction, or you're thinking about starting a side gig. One of the most difficult decisions you'll have to make is around when you should "burn the bridges" with your day job and go all-in with your own venture. 

I went down this same path back in 2020, and it can be super stressful.

Let's look at some things you should consider before making the jump.

Considerations For Leaving Your Job

#1: Health Insurance Costs — most likely your day job is covering a portion of your health insurance and dental costs. Maybe they're even covering all of your premiums.

Once you cut the cord from your employer, you'll now be responsible for getting insurance on the open market. This can be costly depending on what type of coverage you need.

And, if you have a family, you may be looking at $1k+ per month in premiums. 

With this said, make sure when you're budgeting for your monthly expenses, you don't overlook the cost of health insurance and other services you'll now be covering out of your own pocket.

#2: Cash Flow — It's important to remember that every dollar you use to pay your own bills and cost of living is a dollar that won't be reinvested into your business.

Going from a steady paycheck each month to no paycheck or a small paycheck can be difficult to overcome. This is why cutting the cord too early and draining your savings or consuming all of your business profits is a recipe for failure.

Make sure you've analyzed the amount of money you can realistically take from your business or savings without draining too quickly. 

I personally believe you should have a runway of two years to make this happen. 

For some people, a runway of two years may not be a huge amount of money. But, for someone with a family, this could be a huge dollar amount. 

Ultimately, it's your decision on your own personal risk tolerance, but be careful not to jump all-in without considering your cash flow. 

#3: Your Significant Other — Are you married? If so, who you are married to will play a huge role in the success of your entrepreneurship journey. If your partner is not supportive of what you're doing and is not willing to take the same type of risks as you, it's going to be difficult to succeed.

If you aren't married, but you have a girlfriend or boyfriend, this can still have a big impact on your business. 

It's important to understand the type of support you have from your partner before making any big decisions on your business. 

Here's the deal... it's easy to get support in month 1 or 2 without revenue, but how does that support change in month 6 or month 12 if the traction isn't where you'd hoped it would be. 

Just make sure you have the conversation with your partner to make sure you're on the same page with expectations.

And if you aren't in a relationship, this is still important to consider when you do decide to get into a relationship in the future. 

The Bottom Line

There are many considerations you must take into account before leaving a stable job for your own venture. It can often be more beneficial to grow your venture on the side for as long as possible to gain as much traction as possible before jumping all in.

Going in too early will be a drain on your cash flow and is often a recipe for failure.

We all have different risk tolerances, so we're not going to make the same decisions. Just as there are some of us who will jump in too early, there are others who will never cut the cord.

And never cutting the cord is also a recipe for failure. You can't succeed if you never start.

Map out your finances and fully understand what your run rate will look like and be sure to pad your estimated expenses by 30-40% because you'll always spend more than you think you will. 

Good luck, and I hope to see your business boom in the not too distant future!