- The Nest Egg – Stephens says her most important piece of advice to any would-be entrepreneur is the creation of a nest egg before the fateful “jump” is made. “It would be difficult to focus on the new venture if you’re scared about paying the mortgage,” she explains. “The nest egg should be large enough to cover your expenses for at least one year, but that target depends on the type of business you’re trying to start.”
- Credit Considerations– Anyone who is thinking about financing should take credit into consideration. With increased industry regulations and a tightening market, understanding how your credit looks before you embark on such a venture will give you an idea of credit worthiness. “Banks and other lending organizations will not take a chance on a person who has a poor credit rating,” says Stephens.
- Start-up Financing – Entrepreneurs are likely to find that credit is tight for start-up enterprises right now, so Stephens advises hopeful business owners to define and secure business funding before leaving current positions. “If major funding is necessary,” says Stephens, “you’ll want to have that available the day you jump, which may be more challenging than you think.”
- Tax Advisor – Working with a tax advisor is another recommendation that entrepreneurs will thank Stephens for making. “Your tax advisor can help you find opportunities and strategies for how to approach your start-up costs,” she says, “as well as help you determine the best structure for your new venture. “
A true entrepreneur knows that although the jump is typically done solo, success is achieved only by leveraging the help of others. And, a great way to do so is to seek the advice, input, and knowledge of other entrepreneurs who have made it work. Ask questions, be open to insight and constructive criticism, and most of all, be willing to admit if it becomes apparent that it’s a better idea to stay with your salaried position.
“Being an entrepreneur is not an easy path,” warns Stephens, “there will always be potholes in the road to success. But with a thoughtful strategy before you leave your steady paycheck, you’ll be well on your way to success.”