Transistioning from full time job to running small business full time - need advice

[Anthonyxb]

Hi,

My name is Anthony and I am 28 yrs old, currently working as a product development manager full time (50K before taxes). About 3 years ago my wife started selling home décor on etsy. After a year I started helping her and now we are at about $25,000 in six months (not just on etsy) with 55% margins, with almost no marketing or advertising. I want to quit my job and go full time into our business, however I am now in a dilemma. Due to the extra hours invested in work (and a family, I have 3 boys) and loss of sleep I am having some blood pressure issues and need to cut back on the hours invested. We recently used a lot of our savings to get out of student loan debt and We have reinvested almost all profits back into the business purchasing equipment and a building, so my cash reserves are low.

The question is would you advise that I quit my job and go for it with about 3 months savings for expenses? Or just slow everything down and wait until I have months to a year of living expenses saved?

all advice would be considered and appreciated.

Thanks

[Freelancier]

If it takes two of you to make $13K in 6 months, I'd find something else entirely to do. Sorry, but that's too much labor for too little return.

Bottom line: don't quit your day job and retool your wife's business so that she can do it herself until she gets the number up to $100K every 6 months.

[MosheC]

The first thing you need to know about any business is that they are not stable. They will have good months and bad months. They can't be compared to your day job. The time to quite your day job is when you have at least one year of living expenses in the bank. Otherwise the pressure of working on the business and hitting just one bad month will destroy you.

I'm not saying never to take the leap. But I am saying you should think about it before you risk your financial situation and your health.

Good luck with the business

[webfanatic]

I agree with everyone else.

You need to be making more money that $25k especially since you need to consider the costs of having medical insurance (if you don't already have it already). Too many people quit their "day" jobs way too soon often to their detriment. You need to look at your marketing plan and see if there are any areas in your home decor business that can be outsourced so that you're not putting in so many hours.

That would be the first place to start.

[BusinessBySusan]

$50K pretax isn't a lot. I do understand your health dilemma however.

I think you should take a little step back from your wife's business and focus on building cash reserves. 3 months business reserves or business and personal reserves is nothing.

[stevenfies]

I concur with what most others have said here.

As I mentioned in this thread (http://www.small-business-forum.net/starting-your-business/15809-leave-safe-job-puruse-own-business.html), I personally saved enough to have a 1-2 year ramp (to cover my personal living expenses) while getting my business off the ground.

Something you have to understand is that your time isn't as valuable as you think. Yes, it's very valuable and in some ways, it's all you've got. But just because you suddenly start working a bunch more hours doesn't mean market demand or sales will magically increase. To get from $13K in 6 months to $13K in one month will probably require ball-busting effort, trying and failing at different marketing strategies, and investing some money on top of it all.

All in all, 3 months is a very short period of time, so unless you have a very solid reason to believe you can significantly increase sales in that time frame, it sounds extremely high risk to me.

[NathanR]

Agree with what others have said. Especially the fact that you have 3 children to support I wouldn't recommend quitting and going full time with only that much revenue generated.

In my opinion, keep doing it on the side. Keep growing it while you have the steady income and benefits of your job.