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One of the more common questions I receive about working from home is “when should I quit my day job.” This can be one of the hardest decisions when it comes to launching a home-based venture. Sometimes, the answer is “never,” especially if your goal is simply to keep your business as a hobby, there for the soul purpose of just exploring an interest. If you don’t intend to make your unique talents and passion the fuel for your livelihood, then it only makes sense to stay put.
It’s when you plan to make your living from home, and build a business (or at least an additional income source) from your nest, that you have to decide how far you’re willing to go.
If you are the only breadwinner in your family, the decision becomes harder. The stability of a traditional job often isn’t painful enough to drive you to set out on your own. If you love your job, chances are you’re already using you unique talents and skills on a regular basis. The yearning comes from missing time with your family, the lack of purpose, and grinding away at a job where you can’t use those skills you know you are great at. But is that yearning strong enough to allow you to put your faith in your talents, your dedication, and your luck, and make the leap?
Here’s where a good mix of right-brain and left-brain really come into play. First, listen to your intuition. What’s your gut telling you to do? Do you see signs, little “coincidences” that point to your answer? What about your dreams? Often we work though these major life decisions in our sleep, but just don’t remember it. Make a conscious decision to take a look at your dreams, and maybe even ask yourself to send you some guidance in your sleep. Sometimes it’ll just come as an impression, and other times as a full blown dream movie pointing you towards the right answer. If you’re the kind of person who has learned to trust their gut, and listen to their intuition for guidance, this is an easy first step.
Once you’ve gotten a good feel as to what your heart’s telling you to do, take the logical left-brain approach to making the decision. Get a good handle on how much money you need to live. Most people never sit down and hash out what their true living expenses are. If you use something like Quicken, Microsoft Money, or Liquid Ledger, it’s much easier to do. If you use a paper register and statements, don’t let that stop you. You’ll just have to do more up-front work you get the numbers.
You’ll be amazed at what you actually spend each month. The first time I did this, I used Quicken to make up some reports. I actually had a chart and report for how much we spend on pizza each month. At one point Quicken asked if I wanted to make Tony’s Pizza (no relation) a regular automatic payment. That’s when it’s time to reassess living expenses.
Once you know how much you actually need to survive and what can be cut out, take a hard look at your proposed venture. Can you realistically make what you need each month? Doing some research on budgeting, personal finance, and your money values can go a long way to helping determine where you are and where you need to be.
If you’re a 2 income household, and one of you is looking at running a home-based business to be home with your kids, you might find it’s actually cheaper to stay home than work. This seems counter-intuitive, but when you add commuting cost, dry cleaning, parking, food away from home, day care, and the other expenses necessary for the working person, you may be surprise how much you’re actually netting each month.
Granted this is just a starting point, but these are the first exercises I recommend folks go through when they reach the point that they’re ready to the make the leap. Once you have a good framework, you’ll be more comfortable with your decision.