Should you quit your day job to start your business?

To side gig or not to side gig – that is the question facing would-be entrepreneurs and freelancers. Here’s how to decide whether you should quit your day job or hang onto the full-time income for just a little longer.

So you’ve decided to strike out on your own, either as a freelance financial professional or are trying to get your startup idea off the ground. Great! Among the first big decisions you’ll probably face is what to do about your current job. Do you boldly commit from the get-go, quitting your safe day job for the lure of your entrepreneurial dream, or do you cushion the transition by keeping those pay cheques coming while you side gig for a while? Experts have plenty of advice to offer on how to make the call.

The Pros of the Side Gig…

Side gigging can obviously be lucrative but perhaps the biggest advantage of sticking a toe in the entrepreneurial waters while you’re still employed isn’t the extra income but the extra skills and contacts you gain, which can both help you decide if entrepreneurship is for you, and act as an insurance policy should something go wrong.

Perhaps that’s why side gigging is more popular with less experienced workers. “The people that are confident in their skills and have built a strong trusted network (usually people with more than eight years of career experience) generally take a clean break and become full-time independent workers,” says Gene Zaino, CEO of MBO Partners, an American consultancy that provides services for solopreneurs. “Those that are less confident tend to do side gigs.” This two-income-stream model is a popular approach. In the US, for example, there are 12.1 million part-time freelancers and 60 per cent of this group has a traditional full or part-time job, according to MBO’s figures.

Serial entrepreneur Emma Sinclair notes that side gigging isn’t just good for your skills portfolio but will also benefit you as a human being, broadening your horizons and boosting your motivation which can actually benefit your engagement with your day job. “Thinking about other people’s challenges or something other than yourself will do you and your career wonders. It provides perspective, it adds skills you otherwise might not develop, and it allows you to communicate and resonate with people on a far more human level,” she has written.

And if you’re worried that starting as a side gig will make your business less likely to succeed, fret not. Recent research indicates that businesses that began this way actually have a 33 per cent higher chance of surviving than those whose founders went all in from the start.

… and the Cons

There are major drawbacks of splitting your focus, however. Chief among them is the danger of over-committing and annoying someone, either your new clients or your old employer. It’s a potential problem that serial entrepreneur David Hauser has highlighted on his blog.

“Side projects create a talent bubble of people who aren’t fully engaged and are just doing enough at their ‘real’ or full-time job to get by until their startup is up and running. This means their productivity suffers at their full-time job, an expense the employer ends up paying,” he says. Zaino agrees, explaining that doing less than your best at your regular job not only hurts your employer, as Hauser points out, but can also boomerang back to you in unpleasant ways.

“You can easily commit to more than you can deliver to your clients and the results could lead to poor service delivery or employer conflicts,” he says. “It’s important that you don’t damage the relationship with your employer as most independent workers find former employers as fertile ground for initial project opportunities.”

What’s the bottom line?

Besides considerations of your personal capacity for risk and financial circumstances, the decision probably comes down to this calculation:

How much bandwidth do your realistically have to dedicate to your new venture if you stay employed…

versus

Are you at a career stage where you have already accumulated the focus, skills, and contacts you need to go it alone?

Think hard, and good luck!

Want to start your own business? Attend one of our Be your own boss events. These events are designed to give you an insight into the life of an AAT Member in Practice. You’ll learn how to set up your own business and how AAT can support you. Get chatting to other members thinking of starting their own business on the forums. 

Jessica Stillman is a freelance writer based in Cyprus with interests in unconventional career paths, generational differences, and the future of work. She writes a daily column for Inc.com and has blogged for Forbes, CBS MoneyWatch and GigaOM, among others. Follow her on Twitter @EntryLevelRebel.

Jess Stillman is a freelance writer based in Cyprus with interests in unconventional career paths, generational differences, and the future of work.