Forums: Discussions for entrepreneurs and small business.

I started up an outsourcing company in March that is nearing the completion of all the initial planning.  I am ready to take the concept to the market.  The problem is that I have a day job that is preventing me from spending the kind of time I need on my new business.  Also, the type of business I am starting would definately be a conflict of interest with my current employer.  When do I make the leap?  I do not have any clients yet even though I have confidence in the business plan.  How do you know when the time has come?

-------------------------

Jason

Jason,

I guess the question is how long can you go without a paycheck?  A rule of thumb I`ve heard is you should be able to go a year without *cashing* a paycheck from your job.

Problem is, if you end up hurting for $$$$ you`ll put too much pressure on the business.  I`d recommend pulling the all-nighters until things get off the ground.  It almost always takes a lot longer to get going than we`d all like.

 

-------------------------

Bryan C. Fleming

http://www.BryanCFleming.com

I have a year`s worth of living expenses saved up except for the health insurance I will be leaving behind.  Does anyone have any suggestions for a low cost, high quality health insurance provider for small businesses?

-------------------------

Jason

Jason,

I`ve made the "leap" from a real job to self-unemployment before.  It is a gut-check for sure.  I had some rough patches, but never looked back.  

For me, the trigger to jump was a situation at work where I was about to be committed to a two year project and I didn`t want to leave my employer high and dry when I did walk, so I bowed out on the front end, pissed everyone off when I did and by the reactions I got, knew then that I made the right decision.  And I didn`t have 1 year in the bank. 

Actually did it a second time when I got out of the technology consulting business to build my high-tech, alternative materials/energy homes.  I tried to spin up the construction company while I ran the consulting operations, but I found that I couldn`t do get the new business off the ground with part-time effort.

If you find that you cannot effectively operate your new business on a part-time basis, then do the gut-check and go/no-go.

As far as your request for " low cost, high quality health insurance provider for small businesses", these are all subjective terms.  In my experience, the answer is none, however a good provider is Blue-Cross/Blue-Shield.  You will pay a price for their coverage, but it is one of the best in the business.

Jason,

Blue-Cross/Blue-Shield is the best coverage from a quality standpoint.  But it is expensive and may not be something you can get for a small group or just for yourself.  There are other products in the market that are designed for individuals or small groups.  For example, Golden Rule is an insurance carrier that has ok coverage - not a BCBS by any means but decent plans for the money.  They feature high deductible plans that are very low cost.  A high deductible plan means you are paying maybe the first $500 to $2,000 of medical costs and then they pick it up after you meet the deductible each year.  You can team that policy up with a health savings account and get some added tax benefits.  Golden Rule and other carriers like them that write individual medical insurance typically require you to answer medical and health history questions.  If you have had or expect to have health issues these policies may not work for you.

I hope this helps if you want some more details you are welcome to contact my office in Michigan at 866 774-4872 or email me chris@mainstreetptrs.com.

Thanks

Hi Jason,

I believe your situation to be similar to anyone looking to switch jobs or careers, you probably need to have your back-up plan in order, unless going to your day job is truly making you unhappy, then you`ve got to go with your gut make a move.

In my own situation, I had emotional and financial support at home, so I was able to say goodbye to corporate life to concentrate on my business.

But one thing is for certain, you`ve got to put the hours in to the start-up to even give it half a chance.  I remember while I was still at my day job, trying to do both and both things suffered, not to mention my psyche...

Jason,

I made the leap from corporate america to my own business. The way it worked for me was that I started out by working all night on the website development projects after I worked from 8am-5pm at the corp. job. My managers and co-workers knew what I did after 5pm and eventually it began to cost me money by working the 8am-5pm day job. I gave my notice and took the COBRA route for 18 months for me and my family because I am a diabetic. After that I went through a payroll company and got set up with company benefits through my company. I paid $1100 through COBRA fopr my wife and our baby and myself. Now I only pay about $700 through Blue Cross Blue Shield. So the short answer would be, that I would moonlight for the time being and even spend my lunch hour dedicated to your personal business. It will ultimately come down to whether or not you are a risk-taker. A risk taker will give notice tomorrow and realize that it is sink or swim time. If you are dedicated to your business and get up each day and make the calls the business will come in.

    "Also, the type of business I am starting would definately be a conflict of interest with my current employer"

I can apprecite your desire for entreprenuership and all the advice that has been given.  My only issue is that nobody has addressed the "conflict of interest" issue.

Maybe I`m to big on ethical behavior, But In my humble opinion the very first question that should be answered is the conflict of interest Issue. 

It may be the case  because I feel that "what goes around, comes around"  and if you think it is acceptable to take a paycheck from your employer all the time you are developing a business that will compete with your current employer, you may also feel you can do other things  that may be perceived  as unethical like establishing you client base up or even illegal before you make the brake.

I do not believe that is the case yet because you had added it to your post and it was important enough to ask for advice.  Its a tough call.

I`ll just give you two questions.

1. How would you feel if someone did that to you?
2. Regarding the conflict of interest issue "Stay for as long as you can and still be able to sleep at night"

I hope I wasn`t to hard.  I`m  just trying to give you something to think about  and possibly a different perspective.

Good luck and I wish you the best,

BTW you didn`t mention anything about the business specifics, so I`ll assume that you are indeed very confident about your business plan, but if there is anything I can contribute to help you out  I am looking forward to it.  My way of establishing myself in the area in which I am best at.

 

Mike