How to Transition from Employee to Entrepreneur

Online, February 8, 2011 (Newswire.com) - Doug Allen, author of the book, "Million Dollar Profits," has just posted a new blog entry on his Million Dollar Profits blog that describes "How to Transition from Employee to Entrepreneur."

Below is an excerpt from this article:

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How to Transition from Employee to Entrepreneur

Many people get stuck working at a job to make money so they can pay their bills and aren't sure how to make the transition to a full-time entrepreneur. This article gives a really interesting perspective on how to make that transition.

Are you dreading being at work right now, and longing for the day that you can tell your boss that you quit? Are you saying to yourself that you could be growing your business so much faster if only you didn't have a full time job?

I know how you feel. I have been there myself. At times I have pined for the opportunity to just quit my job and focus full time on my business. But, at the end of the day, I realize how lucky I am to be able to build a business while still being an employee.
Having a full time job while building a business gives you a huge advantage, and you need to embrace this advantage. Your employer in many ways is funding your new endeavor by paying your salary while you build you business in your free time.

Don't minimize this opportunity. There are many people who have recently found themselves laid off, unable to find a job, that are building businesses just to survive. You are so much more fortunate.

Once you realize your full time job is an opportunity, it is time to maximize that opportunity. My goal with this post is to give you a plan to take advantage of being an employee while you transition to being an entrepreneur.

How To Move From Employee To Entrepreneur

Create a Realistic Time Frame For When You Will Be Able to Quit
One of the first questions I get asked is, "How long will it take for me to grow my business to the point I can quit my job?" I would like to have a simple answer to this question, but the truth is that this depends on a lot of factors -

What income do you need to generate to quit your job?

How long will it take you to generate that kind of income?

Do you have savings that you can use as a bridge loan to yourself?

Since all of these questions are personal to you, think about these long and hard, and determine a realistic time frame for how long it will take you to grow your business to the point you can make it your full time job.

As a general rule of thumb, most people can make the transition in six to twelve months. For me, I am giving myself two years to make the transition because that is how long I think it will take me to replace my income.

Create a Learning Plan

There is a ton to learn before you start your own business. Use your transition time to learn how to run a business successfully. The goal here is to learn all of the business basics while you are still employed.

I think that the best way to do this is to develop a learning plan that lists the areas of knowledge that you need to learn and then map out how you are going to learn this information. Understand your strengths and weaknesses. What skills do you possess? What skills do you need to learn before starting your business?

There are two categories of information or skills that you need to learn. The first category is information needed to run your specific business - industry specific knowledge and product specific knowledge.

The second category of information is general business information, like managing finances, communication skills, marketing, sales, personnel management and taxes.

Develop Your Life Plan

This is a topic that I am passionate about, and feel that too many aspiring entrepreneurs neglect. If you want to make sure that your new business venture fulfills you and makes you happy, you need to know what you want out of life.

The worst mistake that you can make is to build a business that doesn't fit your life goals. You will be just as miserable as you are with your current job.

I am currently writing a life planning workbook for small business owners. As soon as I have finished this, I will be sure to let you know about it.

Develop a Network of Mentors

Before going out on your own, take this time to develop a great network of mentors. Find people who have built businesses themselves. Connect with peers who are also starting new businesses. This is also a good time to interview a few lawyers and accountants. These are two professionals that you need when launching your business.

You should also think about hiring a coach. Despite being a coach myself, I have hired a coach to help me build my business. We all need someone to help us focus and stay on track. You can hire me as your coach here - small business coaching.

Develop Your Financial Plan

You have to be on solid financial ground prior to leaving your job. Take this time to make sure that you have a strong financial plan in place so that when you are ready to quit your job, your finances are in order. Make sure you save enough money in your emergency fund, and pay off as much debt as your can.

This is a big part of my transition plan. I still have a good bit of law school debt that I want to pay off before I go out on my own.

Develop Your Business Plan

Get your business plan in tip-top shape. Do your market research. Make sure you know who your customers are and what their problems are. Understand what you are going to sell them.

You have to get your thoughts down on paper to make sure that you have thought through all of the details in your business. Creating a business plan is a great exercise to make sure your have rigorously thought through these details.

Start Building Your Business

Last but not least, start growing your business. Start making sales. There is no reason why you have to wait until you quit your job to start selling. In fact, you must be out there selling before you quit your job.

You will never start a business by planning.

You start a business by doing.

Use this transition time to get your revenues up. Grow your bottom line so that you can support yourself once you move from employee to entrepreneur. But, don't get me wrong, you have to do the planning too.

One of my favorite quotes is, "If you fail to plan, you are planning to fail."
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One of my favorite parts about this article is the whole idea of just getting started.

There is only now. "Someday" will never come.

You may also enjoy reading Doug Allen's previous article, "Why the Rich Get Richer."