How To Financially Prepare To Quit Your Job And Start Your Dream Business

If the word “entrepreneur” has been floating around in your head recently, or if you have an idea for a business you think would really take off, you are also likely facing concerns about how you could prepare yourself financially to make that dream business come true. Between rent payments, grocery bills and ever-fluctuating utility prices, actually leaving your full-time job to pursue your dream of starting your own business may feel out of reach.

The good news is, there are steps you can take to plan ahead so you can focus on building your business without having to worry about paying the bills. We spoke with entrepreneurs who have taken the leap and they shared their best tips for financially preparing to set out on your own.

After spending nearly a decade working in finance as a balance sheet strategist for an investment bank, entrepreneur Amanda Gilman found herself becoming unfulfilled at work and day dreaming about her side passion: making healthy snacks that fueled her during the work day. After exploring a few recipes, she created AMG Snacks in 2019, which is now in more than 200 retail locations.

While it might seem like an obvious first step, creating a savings plan with specific goals will lay the foundation upon which you can build up your business.

“I’ve always been a saver,” Gilman said. “Since I thought about creating this business for a year, I prepared to have enough money to cover expenses for two years and gave myself that time frame to leave and work on this company.”

Maude Gagnon had known she wanted to run her own cookie business since she was in middle school, so she started Southie Cookie, a bespoke cookie bakery in South Boston, as a side hustle in 2020. After working her day job as a marketing coordinator, she would head to a local kitchen, where she’d often bake until well past midnight. By using her marketing industry income to financially support her, she was able to fully explore her Southie Cookie concept.

“Doing it on the side was a great option for me because it allowed me to learn, make mistakes, and grow my business savings account while being comforted by the fact that I had a stable income coming in from my 9-to-5,” she said. “Because of this safety net, I was able to enter this new world slowly and safely, yet fiercely.”

After two years of working two jobs, Gagnon officially quit her day job to run Southie Cookie full time in March 2023.

Financial advisers play key roles in helping businesses get off the ground and see long term success by providing financial guidance and expertise that can be helpful in making decisions around money matters, personal finances, and investments.

As Gilman can attest, financial advisers can also help you keep your head on straight. “I found [one] I trusted [to] help me take anything emotional out of the process and figure out what I was getting myself into logically and practically,” she said.

If finance is not your strong suit don’t worry, Gagnon said. She was able to launch her business using Excel, and later, Quickbooks, to help track sales. She also took advantage of online business courses, workshops and mentoring opportunities. It may not be the most fun, she said, but your numbers tell you the health and direction of your business.

“All you need is an Excel sheet,” Gagnon added. “If you can keep track of your sales, expenses, your inventory in dollar amount at the beginning of the month and your inventory in dollar amount at the end of the month, you’re off to a good start.”

Setting out on your own can be incredibly stressful, which increases the likelihood of experiencing mental health challenges.

“You constantly ask yourself, ‘Am I doing the right thing?’ ” Gilman said. “I got through it by telling myself, ‘I’ve prepared for this. I want to experience this so I have no regrets looking back, and I can always get another job using the skills I’ve developed over the years.’”

To help you deal with the stress, Gilman recommends establishing a clear financial plan and sticking to it.

“The financial plan could include utilizing savings, adjusting to a new income level, or taking on a part-time job,” she said. “But the key is to make sure you have a plan to get you through the beginning stages while your company is first taking off.”