When is the right time to quit my job and run my startup? My startup generates 20 times my monthly salary.

Updated on : December 3, 2021 by Nikolai Wong



When is the right time to quit my job and run my startup? My startup generates 20 times my monthly salary.

It seems like a trick question in algebra class.

On the surface, you want to answer like most of the previous answers. Of course! Do it! What are you waiting for?

But the tricky part of your question is what do you mean by "generate 20 times my monthly payment".

  • It does not say that you actually earn 20 times the salary (i.e. profit or salary), only that your business generates that amount.
  • It does not say that the 20 times are in the same time period (monthly). It could be that you make $ 10K / month and your business generates $ 200K / year.
  • It does not say whether your business is profitable. I know someone who brags about
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It seems like a trick question in algebra class.

On the surface, you want to answer like most of the previous answers. Of course! Do it! What are you waiting for?

But the tricky part of your question is what do you mean by "generate 20 times my monthly payment".

  • It does not say that you actually earn 20 times the salary (i.e. profit or salary), only that your business generates that amount.
  • It does not say that the 20 times are in the same time period (monthly). It could be that you make $ 10K / month and your business generates $ 200K / year.
  • It does not say whether your business is profitable. I know someone who boasts that his business raises $ 5 million a year. But if you start to investigate, you find that he is not receiving a salary and that the company is in a negative net profit situation.

For me, this is the kind of carefully worded question that avoids describing the real situation. Maybe you just want to get encouraging responses to tell him to quit your job. If so, keep the details to yourself and keep the “20 times” information vague. Then you will get what you are apparently looking for.

But if you want a reasonable and informed answer, please explain what you mean by "generate 20 times" and provide context about your situation so that Quorans can actually advise you properly.

There is a simple test.

If you lost your job today, would you replace it? If so, why?

It really should be how you think about this.

Sometimes we keep jobs for benefits, or not to spend the day alone, or for some similar reason that is outside the realm of a direct cash response. Some couples keep one person employed so that both have good health coverage while the other runs the risky start-up.

Keeping a job that generates a little less than 5% of your income is not logical unless there are other factors. Especially when the typical 40 hours a week are put in.

That's a bad tract

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There is a simple test.

If you lost your job today, would you replace it? If so, why?

It really should be how you think about this.

Sometimes we keep jobs for benefits, or not to spend the day alone, or for some similar reason that is outside the realm of a direct cash response. Some couples keep one person employed so that both have good health coverage while the other runs the risky start-up.

Keeping a job that generates a little less than 5% of your income is not logical unless there are other factors. Especially when the typical 40 hours a week are put in.

That's bad traction, to put it mildly. But then there are the other factors.

Most startups require attention to get to the point of becoming cash cows. If work takes time away from a legitimate income stream that is sustainable, then you should have quit your job by now if you want your startup to survive.

Other people here have talked about those factors and you should read them carefully. If the 20x value is just a temporary spike, then you already know the answer. You don't give up yet.

Andrew, thanks for asking me for a comment. What I am reading is a bit disturbing. If you have a startup that already pays you 20 times what you make at your other job, then why waste your time with that other job? If you're proposing that the startup could make you 20 times more than you currently make, then I'd say don't count your chicks before they hatch.

You cannot predict the outcome of a future event even if you have been successful with similar events. Every time a baseball player approaches the batter's box, he runs the risk of missing the base. If you have achieved t

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Andrew, thanks for asking me for a comment. What I am reading is a bit disturbing. If you have a startup that already pays you 20 times what you make at your other job, then why waste your time with that other job? If you're proposing that the startup could make you 20 times more than you currently make, then I'd say don't count your chicks before they hatch.

You cannot predict the outcome of a future event even if you have been successful with similar events. Every time a baseball player approaches the batter's box, he runs the risk of missing the base. If you've managed to get a hit from this particular pitcher every time you've met, there's no guarantee you'll hit base this time.

I am not suggesting that you give up on your dreams. But if you have a steady salary, then I would make sure that you have saved 2 years in living expenses before you put your old job aside. Most startups take at least 2 years to make money.

Except you're picking up something of a skill from your job, or just enjoying it more than your business, I don't see why you're still there.

However, you need to make sure you are working on the foundation of the business to ensure that you are building a sustainable one. You will be faced with hiring and working with people, administration, accounting, customer service, etc. Make sure you put all of this in place because once you leave your job, this is your job now and it is your responsibility to make it as organized as where you work now. Develop a culture that helps your strategies achieve what you want.

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Except you're picking up something of a skill from your job, or just enjoying it more than your business, I don't see why you're still there.

However, you need to make sure you are working on the foundation of the business to ensure that you are building a sustainable one. You will be faced with hiring and working with people, administration, accounting, customer service, etc. Make sure you put all of this in place because once you leave your job, this is your job now and it is your responsibility to make it as organized as where you work now. Develop a culture that helps your strategies achieve what you want. Good luck!

Now.

This approach is a bit spartan, but I'll share it anyway.

When it starts, monetary support is essential. But most importantly, you need to support yourself emotionally. It is only efficient to follow an action plan where the solution of one need automatically solves the other. Hope the following steps help you devise a path. These are working pretty well for me.

Create an inventory of your assets - include everything. All the money in your bank accounts, all the gadgets you own, all your vehicles, your furniture, your clothes, your appliances, the number of pairs of shoes ... You understand me. H

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This approach is a bit spartan, but I'll share it anyway.

When it starts, monetary support is essential. But most importantly, you need to support yourself emotionally. It is only efficient to follow an action plan where the solution of one need automatically solves the other. Hope the following steps help you devise a path. These are working pretty well for me.

Create an inventory of your assets - include everything. All the money in your bank accounts, all the gadgets you own, all your vehicles, your furniture, your clothes, your appliances, the number of pairs of shoes ... You understand me. Keep this list, edit and update as necessary.

Live frugally, but not greedily - we almost always surround ourselves with things we think we need. We don't need that much. We want things, yes, but we don't need them. The key is to be able to differentiate between our needs and wants. When I started, at some point I wrote the things I needed. This is how it looked:

Literally, that was all he needed. Of course, all I had to do was sit down and program, so the needs were quite limited. Things may differ in your case. The point is, treat everything you don't need as a luxury. But don't compromise your needs.

Choose Freelance Jobs and Get Paid in Kind - Remember the nature of money - the more you have, the more you need. Money is the root of desire, which in turn is the cause of misery (what an incredibly true cliché). In order to concentrate on work, I had to give up all excesses and found that the moment I made some money, after spending on necessities, I would go out to indulge myself. So to avoid indulging myself, I started asking people to pay me by buying things from me for doing their weird consulting / planning / coding jobs. I got an internet dongle that helped keep me mobile, another "client" got me a USB hard drive for backup purposes, another paid for my laptop batteries, and so on.

Avoid instant gratification - wait to go out to that pub until the day you absolutely have to. Wait until you try that new burger joint. Do you need to get drunk? Take a few days before doing it. All of this will help you savor the moments of ecstasy. Like holding on to drink water until absolutely necessary, the first drop becomes the most delicious drop ever. Summary: Let your fun be qualitatively richer than quantitatively rich.

Hanging out with friends / family at their houses: When we go out, there is too much noise, too much distraction for you to pay attention to the people you are with. Hang out with your loved ones indoors or in quiet places (which don't cost money). As you save money, you will bond better with the people you care for and who care for you. This will be of great help as a support.

Your friends and family may have more jobs for you than you can imagine - reach out to help your loved ones and you will discover that there are a million ways you can be of use to them. And since you get paid in kind anyway, you won't have to worry about the menial task of asking for money. But make sure you don't start spending all of your time doing these things. Know when to say no.

Review your list of assets: Once you have started following this lifestyle for a couple of months, review the list you made in the first step. Cross out items that you later deem unnecessary. Sell ​​those crossed out items. If they have emotional value, don't get rid of them. But anything that is excessive can always be sold to someone else. I sold my furniture, my expensive headphones (to buy cheaper ones), my iPad, some of my suits, some shoes, a couple of watches, an expensive microwave to get a cheaper one, etc. This helped me stretch my runway in 3 more months.

Regarding accommodation: Take the bullet and move in with your parents if you can't find anyone else to live with. They will love your company and you will be able to spend some time with the people you should be spending time with anyway (under normal circumstances). This is the best support you will ever have. Even if they think you're being stupid by taking such a big risk, try to convince them that this is important to you. I found that my conviction and belief in my idea grows with every discussion I have with my parents because by explaining to them, I have to articulate the answers in a clear and unambiguous way, something that I would never have done while responding to my own words. questions.

Warning: this is not as easy as it sounds. It really isn't. I used to give in to temptations quite easily and to increase my efficiency I had to resort to all of this. Without money distractions, I can focus on just work and hope it gets me somewhere. If you can avoid the temptation of money, you don't need to follow such a spartan routine.

Remember this, we really don't need a lot of money to live comfortably or happily.

I can't believe I wrote all of this. I will totally understand if it seems crazy to others.

Let us call your current company "Company A" and the startup you want to join "Company B", okay?

Company B offers you a fair amount of Equity in it, while Company A only offers you a title of "Vice President of Sales" and a larger paycheck with the promise or anticipation of more promotions.

If Company A is a well-developed business, has good cash flow, strong balance sheet, is in a strong financial position, has good inventory turnover, has a strong stable fast ratio, is constantly increasing its NPM (margin of net profit) every year and have good to reasonable market share in your country, then it is safe

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Let us call your current company "Company A" and the startup you want to join "Company B", okay?

Company B offers you a fair amount of Equity in it, while Company A only offers you a title of "Vice President of Sales" and a larger paycheck with the promise or anticipation of more promotions.

If Company A is a well-developed business, has good cash flow, a strong balance sheet, is in a strong financial position, has a good inventory turnover, has a strong stable fast rate, is constantly increasing its NPM (Margin Margin). net profit) every year and has a good to reasonable market share in your country, then it is safe to say that Company A will not go downhill anytime soon. If you stay at Company A and, as you said, you will become the "Vice President of Sales", then expect a salary of between $ 100,000 and $ 150,000 (depends on the size of the company and the country it is located in). like the assurance that your job is not at risk and you will not end up broke on the streets

on the other hand

Company B provides you equity, as Company B is a startup and a startup is not always safe in terms of survival, while your job at Company A is very safe. If Company B is doing well in terms of selling their products and supplying the demand they are targeting, then expect their Net Worth to increase, as as the value of the company increases, so does its share. in her. But if Company B has a bad business model / no business model, it is all talk and ideas and there is no exact way to make money, it has no demand for its products / services and it has a bad financial position, then I do not know. recommends that you join.

All startups say "There is demand for my product / service." WHERE IS? "THERE" is not something you should wear, show they have a demand for what they have to offer

Joining a startup has its pros and cons, and as a sales person, you will undoubtedly know some of them.

It's all up to you, if you think you should move and join Company B then go ahead, if not, remember that no employee is as rich as the employer and you have a choice, you can build your dream. or keep working for someone else. Do you understand what I'm saying?

My name is Bryan Lawrence, I write about business, stocks and everything related to money, so if you follow me and my blog The Commerce LifeStyle, you will not waste your time :)

The strength of a true entrepreneur is perseverance. They follow where others say 'no, it's impossible', 'you should give up', 'you're crazy', 'waste of time', 'waste of money'. It is also your weakness and an element of risk that can ultimately bring huge financial rewards or failure; Although failure can bring different rewards if you can learn from experience, often an expensive but invaluable education.

Clearly, there are many empirical metrics you can use to justify your decision to continue or quit, but ultimately it comes down to a choice and the choices in your heart are usual.

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The strength of a true entrepreneur is perseverance. They follow where others say 'no, it's impossible', 'you should give up', 'you're crazy', 'waste of time', 'waste of money'. It is also your weakness and an element of risk that can ultimately bring huge financial rewards or failure; Although failure can bring different rewards if you can learn from experience, often an expensive but invaluable education.

Clearly, there are many empirical metrics you can use to justify your decision to continue or quit, but ultimately it comes down to a choice and the choices at heart are often emotional / intuitive (even if justified by many fundamentals and pre-decision and post-decision investigations). .

So quit or carry on, it's actually what you do best. What no one knows, until he has the power of hindsight, is whether or not he will actually succeed at the desired or planned level; obviously with good research, solid financial models, expert planning, experience, the right people, helpful contacts, timely / sufficient funding, proper execution, and a decent review / feedback / monitoring process, you can skew the odds in your favor.

If your criteria for success are commercial, if your business doesn't solve a current problem, you're going nowhere. The key here is timeliness: timing is everything.

The best entrepreneurs will adapt their vision along with reality feedback and, as others highlighted, they will simply pivot and adjust so that they are ultimately successful in the end, regardless of obstacles; however, the vehicle of its success will undoubtedly have evolved from the first. they started in.

Real time of stories….

Many of us in the IT industry think about this very question and search for an answer. Well here it goes ...

After engineering (2012 passout) I didn't have any skills. I had first class, but in my mind I knew that I could barely write a C program and run it successfully. I joined a pretty awesome sports analytics company and loved every second of it. The first time in my life I learned something with genuine interest. Unfortunately, they stopped running that company in Bangalore and instead gave me the opportunity to work remotely. Moderate pay too. For 6 months I worked at home and was doing well

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Real time of stories….

Many of us in the IT industry think about this very question and search for an answer. Well here it goes ...

After engineering (2012 passout) I didn't have any skills. I had first class, but in my mind I knew that I could barely write a C program and run it successfully. I joined a pretty awesome sports analytics company and loved every second of it. The first time in my life I learned something with genuine interest. Unfortunately, they stopped running that company in Bangalore and instead gave me the opportunity to work remotely. Moderate pay too. For 6 months I worked in my house and was earning a good sum. One day the ghost called the middle class mentality haunted me. Family members began to ask where he was working. How much did he earn, etc. I didn't give a damn, but my mother, my poor mother, thought a lot about my future and told me that one day I would go to work outdoors, etc., etc.

22 years .. enjoyed ?? No. Did you study, did you get the first places? No. Did he have something? No, except family love.

The next 4 years I learned more than all my 22 years combined. In the background was that emptiness of doing nothing and going to the office ... boring life ... Like all friends, we also argued about starting a company and it would be limited only to the weekend. One day my friend who was intellectually amazing inspired by his friend told me about E-bay and selling some things ... 8 months I was living again ... buying items from Mumbai, Delhi and other places and selling them on eBay , Flipkart, Amazon, Snapdeal, Paytm, etc. We were quite good at learning quickly together and executing it. I handled the packaging and part of the acquisitions and it was amazing ... I was a bit hectic but I wanted to do something and the things learned cannot be compared to any paid course ...

Then came disaster .. My friend was betrayed by his girlfriend he was abandoned. I was devastated. He couldn't focus on anything. He lost interest in everything ... In the end he collapsed ... He had a big impact ... Fortunately, our regular job The salary helped us ... He recovered slowly ... However, it took 8 months ... For the Guys it is very difficult to forget a girl whom they loved the most.

He likes development and I like digital marketing ... Good combination I guess ... We got down to business and started researching and creating a website again. Now it's 80% done and we're working on it ... Sure enough it's going to be pretty amazing ... Once I recover, I'll quit my job and go. (It doesn't mean that everyone has to go to work in addition to starting a business.)

  1. It never goes the way you planned or thought ... But don't give up ...
  2. Do not lose confidence at any time .. Never ..
  3. You'll be broke ... like financially sometimes, but never lose your nerve ...
  4. Never listen to your negative family or friends. Just don't do it.
  5. Don't rush ... Think it over ...
  6. Believe in yourself .. You can do anything ..
  7. Learn simultaneously ... Never stop learning from mistakes ...

All the best ... Everything you do in your life will be insignificant but it is very important that you do it ... !!

There is no "right" time to do this, and it depends on the business you are starting. You may not have to quit your job to start the business, choosing to quit later when your business has enough income to support yourself and yourself.

Here are some factors to consider when making the decision for your own specific situation:

  1. Do you have six months of savings you can live on while setting up your business, assuming it can take that long to get your business to produce enough income?
  2. How much money do you need to start your business? How much money wi
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There is no "right" time to do this, and it depends on the business you are starting. You may not have to quit your job to start the business, choosing to quit later when your business has enough income to support yourself and yourself.

Here are some factors to consider when making the decision for your own specific situation:

  1. Do you have six months of savings you can live on while setting up your business, assuming it can take that long to get your business to produce enough income?
  2. How much money do you need to start your business? How much money will you need to keep running for the first six months of your life?
  3. Can you start your business while you still have your job? Can you develop leads and / or clients before actually opening the business?
  4. Do you have a written business plan? Some kind of plan, even for the smallest businesses, can make startup a lot easier and is critical if you want financial backing. An excellent resource for planning your business is the Small Business Administration (SBA), which has two excellent organizations under its umbrella: the Small Business Development Center (SBDC) and the Senior Corps of Retired Executives (SCORE). They can be found online and have offices across the country. Their services (business plan consulting, marketing training, creation of a legal entity, etc.) are free and low-cost, can help with your specific situation, and are available not only for startups, but also for existing companies,

I hope this information provides you with some guidance on how to start your business without undue risk. We wish you every success in your business!

You have good answers. This is really an impossible question to answer without limiting it. Your current job pays X. Your startup would pay Y. Can you live in Y? For your part, that includes your family if others count on your income. If you can't live on Y, do you have savings to cover the 12-24 months until your business income increases?

Also, what is your time frame? Are you planning to get married or have a family in the next few years? Are you negatively or positively affected by doing this?

You can get an idea of ​​the timelines to go big (assuming you need outside money) at David Ro

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You have good answers. This is really an impossible question to answer without limiting it. Your current job pays X. Your startup would pay Y. Can you live in Y? For your part, that includes your family if others count on your income. If you can't live on Y, do you have savings to cover the 12-24 months until your business income increases?

Also, what is your time frame? Are you planning to get married or have a family in the next few years? Are you negatively or positively affected by doing this?

You can get an idea of ​​the timelines to go big (assuming you need outside money) in David Rose's book, Angel Investing: The Gust Guide to Making Money and Having Fun Investing in Startups.

It is not just about money. Your startup is yours. If you want to be an entrepreneur, you usually can't do it while being part of a large company. I have several friends who have been serial entrepreneurs and have several small businesses that they started that provide them with a good (not great) income, but they are doing things that they love to do. They are much happier than other people I know in large companies (and a small business) who hate going to work every day.

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