A paycheck is like crack cocaine. Here’s an excerpt from Felix Dennis’ book, How to Get Rich.

For those determined to succeed in the getting of money, earning a living working for others can prove useful. But beware. Given time, a salary begins to exert an attraction and addictiveness all of its own; regular paychecks and crack cocaine have that in common. More to the point, working too long for others will serve to blunt your appetite for risk. And in risk lies the only sure path to riches.

At some point, if you’re serious about starting that new business and taking control of your life, you’re going to have to give up the comfort of a regular paycheck and stable job.

You’re going to have to take a leap of faith and venture out on your own into the cold harsh world of running your own business.

But, you’re not alone! I’m here to help you navigate this path, which, I’m afraid to say, can be very lonely and will most certainly test your character and willpower.

In fact, this blog post is the answer to a question that was asked by one of my readers! They replied to an email I sent out asking “what’s your biggest challenge as an entrepreneur” (you can subscribe below).

Hey. Great to be connected and thanks for writing. If you ask me honestly, the biggest challenge is leaving a job which pays you regularly and starting something when you cannot survive without your regular monthly income…any thoughts? Thanks – Jayasree

First, let’s talk about how you can minimize risk and not fall flat on your face. Then, I’ll cover some legal ramifications and finally I’ll share my story of how I went full time on my business!

1. Minimize Risk: Start your business part-time

You might have a million different excuses as to why you can’t start your business now.

“I don’t have the time.”

“I don’t have the energy at the end of the day.”

“I can’t think straight after work.”

EXCUSES! These are all excuses. If you can’t overcome them now, brace yourself, because you’re going to be dealing with harder problems when you own your own business.

By starting your business part time (like I did), you’ll give yourself the chance to get to know your customers, test your skills, and get a sense of the market opportunity. It’s best to have a bit of revenue coming in before you go full time on the venture.

Most of the hard part in starting a new company comes in the early stages, when you’re not generating revenue. You have to figure out:

• Who your customer is
• What your customer wants
• How to create a great product or service
• How to market that product or service
• Systems that you can set up to make the process easier

What makes it even more complicated is that often times, the plan changes. You’ll pivot. I did several times. Just because you think there is an opportunity serving one type of customer, doesn’t mean that’s true.

While you’re learning these key elements of every successful business, you’re not generating any revenue. It’s only once you hit product-market fit that you’ll begin to see the cash come in.

Therefore, I’d learn as much as possible (from books and market tests) and take as much action as possible before you leave your job. This way, you’ll leave your job knowing:

• You have revenue
• You have something your market wants
• You know how to get the word out about it

In time, you’ll have to figure out how to hire great people and set up better systems or better advertising, but you’ll at least have nailed down the basics. It’s just a matter of pouring in more hard work, time, and energy.

Believe it or not, this is actually an investor’s mindset. There are very few investors who will put money into a company knowing that the entrepreneurs are using it to create their product, test out the idea, and see whether or not it works. This is idea-stage investing.

Idea-stage investing might have been popular in the dot com boom, but it’s very rare today. Now a days, investors will only put money into your company once you have proven you have something the market wants and that you’ll be using the money to scale up.

To get you started, I’ve put together a few part time business ideas which can be scaled into a full time business with the right amount of effort and hard work. You can check them out here.

2. Warning: There are legal implications

Before I get into this topic, let me just say that I’m not a lawyer or an accountant and this blog post should not be taken as legal or accounting advice. It’s my opinion.

That being said, I highly recommend buying The Entrepreneur’s Guide to Business Law. It’s a actionable textbook with everything you need to know about business law.

There are a few items that you should consider before starting your own business.

• Trademarks & copyrights: Is your idea already taken? You don’t want to get a year into your business and then get sued. I was threatened to be sued once for using an image on my other blog that I took from google images. Was not fun.
• Employment law: Are you allowed to work on your venture while you’re employed? Is it going to compete with your employer? This will vary from employer to employer, your role in the company, and depends on your contract. In general, don’t use any materials your employer owns and don’t work on your business while at their office or on their time. I highly recommend reading up on this.
• Setting up the organization: Will you create a LLC, Corporation, or keep it a sole proprietorship? Each has benefits and drawbacks. They also vary in how you’ll report your taxes and structure ownership.
• Structuring ownership and raising money: If you’re going to be raising money, there are a whole slew of issues to read up on and it’s unlikely you’ll be structuring as an LLC. Also, having a partner in your business will have it’s own set of legal ramifications.

I’m not gonna lie. I think that setting up a business, even in the USA is unnecessarily hard from a legal, tax, and accounting perspective. Those are things that most people don’t want to deal with or master as a new business owner. But, you have to do it and dot your I’s and cross your T’s.

Unfortunately, I’ve made a few mistakes and they have always been costly. You can minimize your mistakes by taking the legal and tax elements of starting a new business very seriously. You’ll thank yourself later.

3. Dealing with and managing partners

For some of you, this won’t be an issue because you’re a solo entrepreneur. However, if you have a partner that you’re starting this business with, read carefully.

Having a cofounder is like being married…but without the sex….so like most marriages. You’re going to have ups and downs. You’re going to agree and disagree and you’re most certainly going to need to pick your battles.

The most important thing that you can do is have a written copy of all “understandings” and have everything laid out in writing when you’re making crucial decisions.

I would nail down:

• What each contributes to the venture
• Roles of each cofounder
• Vested equity and a vesting cliff
• Your vision for the company and yourselves
• Communication schedule
• How company related decisions will be made

This is a sticky topic, but I’d also recommend only having a cofounder who is located in the same area. I’ve seen too many cofounder disputes and communication is generally harder when you’re not in the same area.

Finally, the last thing I’ll say about this topic is that you need a cofounder who not only shares your vision and has a complimentary skill set, but also who is as committed as you are.

If you take one thing away from this section, it’s COMMITMENT that matters.

Someone who is as committed as you will quit their job when you quit yours.

They’ll put in the long hours needed to get the business off the ground.

Just like a marriage. They’ll be with you through the good times and the bad. You’re going to deal with a lot of stress and problems. You need someone who is up to the challenge and the long road.

I made this mistake when I was trying to launch a new tech startup. I moved to New York City thinking that my cofounder would as well. We had been working on the company for some time. Months and months went by and it didn’t happen.

Eventually, I quit that business and focused on my own, which is now successful.

I don’t blame them. That’s just life. But it’s something to be aware of.

4. My Story and A Gift

Before you go off on your way, take a second to connect with me and subscribe to this blog. You can reply to any email I’ll send out.

I started my business while I had a part time job that paid for my basic expenses. I devoted all of my extra time to growing my business. I did not have a full time job. This is another strategy to supplement your income.

Instead of quitting your full time job outright, you could trade it for consulting, contracting, or a part-time gig to pay for your core needs while you transition into launching the company.

From the start of the company, it took about a year to go full-time and then it took another year for me to feel comfortable about saying that “yes I was successfully full-time on the business.”

For a while there, I was existing on pizza, ramen, and living in a bad section of the city. But, I made a promise that I’d do whatever it took and endure whatever pain came my way, as long as I was eventually successful.

The amount of time that it takes YOU will depend on your product/service, work ethic, and industry.

As a gift, if you reply to one of my emails that I send out, I’ll answer your questions, like this one. I might not be able to get to all of them, but I’ll do my best!