This last week I was a speaker at a global Founder Institute event talking about startups, from trends to funding, that was attended by 190+ people. Post this session, many people reached out to me on Linkedin asking to pick my brain on a number of matters. Now, I love helping people, but I do have limited time, so I took the highest-asked questions and have started generating short posts/blogs on it, so I can reach more people who have the same/similar questions on their minds.
This post specifically will be focused on making the transition from employee to entrepreneur. I'll be sharing my views to help you better prepare yourself before you embark on the exciting, but daunting journey. If you have done the same, please feel free to contribute your views and experiences in the comments.
A salary is your first sacrifice. There's no paycheck waiting for you. You need to figure out how you will live, and for how long can you go without a steady income. So let's get down to business and look at just a few things you can do, to make this transition a little easier.
Caveat - I assume that you have identified your WHY, and have already decided that you are taking the leap. It's all just a matter of timing. Here are a few things you need to do before you quit your job.
Start with a clear plan for your business
Before you quit your corporate job, make sure that you have a clear idea of what you will be doing and develop a plan for the business you want to build. Develop a deep understanding of your target market and customer. Test your idea out by interviewing your ideal customer to find out if the problem you will be solving, actually is valid and they will be more than happy to pay you to solve the solution. Figure out the unit economics early, i.e. how will you make money and what expenses will you incur to make that money? How will you cover your working capital until you are cashflow positive? Be realistic about your assumptions by going out and validating them. Think carefully about execution - an idea is worth nothing if you can't bring it to reality in the form of a well-structured business. It would be great if you can do this groundwork before quitting your job. Accelerators like Founder Institute help you ease into it all.
Registering your business
I've come across so many posts that tell Founder to go get their business registered and sort their tax number out etc. Whereas this is important, I honestly feel like it should be done after you have validated your idea, i.e. it's making you money and has proven to be viable. Otherwise, you will be sitting with unnecessary expenses that you don't need to incur if it turns out that your idea is a dud.
Manage your finances wisely
What's your burn rate and how much runway do you have? Don't be duped by the Instagram life and the teenage millionaires you see - some are outliers, whilst others only show you what they need to suck you in to buy what they're selling. Don't be a sucker! Building a business requires work, so be prepared to work hard.
All businesses need money to start, and even with all the "free" tools out there, you still need money. It can take some time before you see any profits, and you most likely will self-fund/bootstrap for a while. be sure to have enough savings, not just to bootstrap your business, but to live and cover basic expenses. Track expenditure in your personal capacity as well as in the business from Day 1.
Outside funding may be an option, but don't bet on it. This funding is not easy to come by...unless you're well-connected and have people who are willing to donate or invest in your dreams irrespective of outcome.
Learn to sell
If you are not into sales, or you cringe at the mere thought of being a salesperson, my only comfort to you is - Suck it up Sunshine!! As the Founder, you and you alone are responsible for generating sales for your business. Without sales, you have no business. Take a sales course (or ten); ask for an assignment in sales at your current company; sign up for an MLM scheme (multi-level-marketing); speak to, and study salespeople - from how they find their customers, to the strategies they use to turn cold leads into raving fans. Sales is a non-negotiable skill. You will need to generate sales to prove your idea is viable.
Be prepared to learn new skills
If you don't know what Google Ads or Facebook Ads are - have you been living under a rock? You are going to use Canva, ChatGPT, Google docs, Trello, and many many other apps to help you do basic tasks you took for grants in corporate. There's something new every day! Be prepared to be learning...a lot!
Embrace failure
I'm yet to meet an entrepreneur who hasn't failed at something. Some are small failures, and others are catastrophic. It's part of the entrepreneurial journey. Failure will either break you or build you up. Embrace them, learn from them, and move on. This builds grit. It will also bring you to the realization that not everyone is cut out to be an entrepreneur. Some of us make pretty decent employees and there's nothing wrong with that. We need all types of people in this world to exist. Do not let failure discourage you from pursuing your dreams. Rather than letting it defeat you, let it be an opportunity for you to grow and learn.
Stay focused
If you're anything like me, sometimes my ADHD brain gets the better of me - like a cat on crack - it's easy to get distracted by shiny objects and new opportunities. You will see more and more opportunities as you train your brain to build businesses. Find ways to stay focused on your goals and vision. Set clear priorities, and don't be afraid to say no to opportunities that don't align with your vision.
Network and seek mentorship
If you don't like networking because you are an introvert...tough - get with the program. Networking is crucial to building a successful business. You will find yourself attending various events, joining professional associations, and connecting with other entrepreneurs in your industry. Actively seek out mentors who can provide you with guidance, advice, and support at the early stages. Again, Founder Institute is a great space to do this.
Build a strong team as soon as you can
I had a serious issue when I left corporate. In corporate, I could delegate work and reach out to others when I needed help. I also never had to worry about paying their salaries. The harsh reality is that when you start out, you probably won't be able to do that and you will find yourself doing everything on your own. Building your team is important as you get your business off the ground. Keep in mind that you will need to pay your staff before yourself, so make sure you have a strong team to support you. This includes strategic partnerships and advisors.
Be honest about your abilities and find people with the skills you lack, to fill the gaps, and who share your vision and values. Don't be afraid to hire people who are smarter than you. They will help you to make better decisions and achieve your goals faster.
Start small and test the waters
We all want to be unicorns, but you need to start somewhere as getting traction is tough, so start small and focus on a specific market, region, or even product. Gain traction, gather insights, reiterate your offering, and expand organically. For example, MPESA worked well in Kenya and was an utter failure in South Africa. Why? Because Kenya's banking system was inadequate and there was a gap for alternate solutions that people were willing to adopt and pay for. South Africa on the other hand, had a strong financial system that was well-regulated. It remains one of the strongest in the world. I'm watering it down, there are many more reasons for its failure in SA, but I'm sure you get my point. If you can, with full disclosure to your employer, get your business off the ground while still employed, opt for that. The financial stress alone is a killer.
Take care of yourself
This is quite the rollercoaster. Some days are great, other days you find yourself scrolling job opportunities to escape something. So even though it's immensely rewarding, starting a business can take a toll on your physical and mental health. You may find yourself working 14-16 hour days and on weekends, with no income to show for it. Make sure you take care of yourself by getting enough sleep, exercising regularly, and taking breaks when you need them.
Starting a business is not easy, but it can be rewarding. If you have a passion for entrepreneurship, are willing to work hard, and have a solid plan, you can succeed. Take one step at a time!
Good luck!
How can we help:
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