How do I transition from corporate life to running my own business?
Q: Dear Ruchi, I have spent over 15 years working in the corporate world and feel it is finally time to pivot into my true calling. I am seriously considering leaving my job and starting my own business. This is a big jump and I am very nervous. As I inch closer to taking this leap, what is the best way to financially plan as I get started? What should I consider before jumping ship?
A: First, I think some congratulations are in order! There is no bigger accomplishment than following the path you are meant to be on and taking steps toward living your happiest, most prosperous life. This is exciting!
I’ve been in your shoes and I know exactly how you feel at this current moment. I too spent many years in corporate before starting my own business. The unknown can be nerve-wracking though when you have a plan in place it’s possible to set yourself up for great success. Here are a few steps you can use to financially plan for your departure from the corporate world.
Review your financial goals & have the necessary conversations.
Think through what your goals are (both financial and life goals). Consider things like: “When do I want to retire?”, “What kind of salary do I want to make?”, “Where do I see myself in 5 years?”, and so on. This includes having real-life conversations to ensure your goals are aligned, whether it be talking with your partner, family members or consulting with advisors.
Look at the numbers.
Now let’s get more technical. This will take time and require you to look at the numbers and get a clear picture of what you are currently making and spending, and how that will be impacted by your career transition. This is also an opportunity to notice where you can temporarily cut back on expenses and start creating a cushion of savings to cover your expenses while you are building your business.
Create cash flow projections for your business to understand what your anticipated revenue and expenses will be, and align those to your personal finances. Be realistic. When you first start your business you will likely not be immediately making as much as you did in the corporate world, and in fact you may not be profitable at first (depending on the type of business you start and the capital required).
Trust yourself.
The beauty of having your own business is that you have the power to take fate into your own hands and create your future. Mindset is of utmost importance on your entrepreneurial journey and it will be essential to trust yourself, trust money, and to let go of old beliefs holding you back. You can do this! Don’t be afraid to ask for help and use the endless resources that surround you.
Here’s to your prosperity!
- Ruchi