How to give up your day job
I get asked this a lot at the moment and I think its probably a sad indictment of the state of morale with many nurses. Often people have a great idea for a service or a new social enterprise but don’t know when the right time is to leave. From my experience over the last 5 years, I think there are 3 distinct phases you need to move through and (for the record) I completely botched this myself and survived the first year by the skin of my teeth.
Stage 1 – The planning stage (still with your current employer)
The 1st stage needs to be complete before you do anything about leaving. First you need to work out your business idea and by that I mean the idea or service AND a way that this can be run at a surplus. Often people have a great idea but haven’t worked out how much it will cost to run, where the income will come from and the “napkin costings”. Once you have a business idea then you need to develop contacts with commissioners and potential purchasers and look to raise the start-up income. You may even be able to start delivering the work at this stage even though you are still holding down a full-time day job.
Stage 2 – Early growth (part-time with your existing employer)
This stage starts when the new enterprise can pay AT LEAST half your current salary. Until you have brought in half your salary then you are still at stage 1 and it is incredibly risky leaving your job while you are in stage 1. Once you have enough income to support yourself on a part-time job then you need to start negotiating with your current employer about moving to a part-time role. Tim Ferris has some very detailed strategies for this stage in his book “The four-hour workweek” and I can heartily recommend this to anyone at this stage. This transition can be tricky and you need to carefully think through a number of issues such as conflicts of interest, indemnity insurance, workload balance between the two roles, work-life balance, etc.
Stage 3 – Full-time entrepreneur
You can move to this stage when your new enterprise can pay AT LEAST your full-time salary. A reserve of 3-months salary is the bank is ideal but it needs to be able to complete support you. At this point, you should hand in your notice and it is possible to waive your contract’s notice period if both you and your employer are happy to do this. One of the other possibilities at this stage is for your new enterprise to second you from your current employer although you will definitely need advice if you are looking at this route. The big advantage of this is that you may be able to keep your pension and it may be slightly less risky than being a full-time entrepreneur (although if you are that risk-averse, being an entrepreneur may not be a very comfortable existence).
The key to this process is that it is not dependent on your personal aspiration, your current work situation or how good your business idea. The stage you are at is ENTIRELY BASED on how successful your enterprise is. Given that 50% of new enterprises fail within 4 years, it is also a way of testing how good the idea is and whether it can financially support yourself without risking everything on it. If you leave prematurely and the enterprise is not as successful as you hoped (or even if you hit the dreaded cash-flow problems) then you may end up taking on personal debt in order to survive as the enterprise cannot afford to maintain you. It is also easier to grow your market, do your business planning, make business contacts without the enormous pressure of wondering where this months mortgage payments are coming from or shopping for Netto’s no-frills baked beans and wondering what exactly were the frills