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063 - Is it time to quit the day job?

When do you know that it’s time to go all-in on your business? Many vegan businesses start as evening and weekend ventures whilst the founder uses the money from their day job to pay the bills.  It’s an important part of many people’s entrepreneurial journey – but when is it the right time to quit the day job and go all-in on your vegan business?

Not only is it important not to give up your regular income too early, but waiting too long can be equally as damaging to your growing business.  In this episode, David looks at how to know when the time is right to make the leap and explains that sometimes there is a third option to make that transition go more smoothly.

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Episode transcript

Hello and welcome to episode sixty-three of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe.  And if you have a vegan business, or are thinking of starting one, then Vegan Business Tribe is here to support and inspire you not just to build a vegan business, but to build a SUCCESSFUL vegan business.
 
And as always, I’m going to invite you to go beyond this podcast and come join us over on veganbusinesstribe.com if you haven’t already – because this podcast is only – gosh, something like 10% of what Vegan Business Tribe is about.  I say every week that I want to help you build a successful vegan business, and there’s only so much I can help you by talking at you.  So if you head over to the website you can also join our community of hundreds of other vegan business owners all supporting each other.  You can come to our networking meet-ups, join our group business clinics, study through our courses and collections and get full access to all our content.  You’ll also get to link up with other vegan business owners who are on the same mission that you are in our Community Hub.  And at the same time, the cost of being a member of Vegan Business Tribe (and we’re talking the equivalent to Netflix costs here – or the same as you would spend a month if you bought a cup of coffee a week from your local coffee shop) that funds all the work we do at Vegan Business Tribe.  It allows us to keep putting out this podcast every week, it allows us to keep championing the vegan business scene around the world and to help hundreds of other vegan businesses at the same time. So, if you see your vegan business as your form of activism, as we do, then don’t just lurk around, come and sign-up as a full member and let’s see how we can help you grow your business too.
 
And it’s that growth part that we’re talking about today – because there are a lot of different routes to starting and growing a business.  Some people throw everything they have at it from day one, they go out and get funding, they hire a bunch of staff – and that’s actually how I launched one of my early businesses about seventeen years ago.  Day one, we had 10 staff turn up to our brand new offices with a lot of enthusiasm but very little in the way of new customers and burnt through our start-up funds in just a few months – that was a great learning experience of launching a business the hard way!  Other people start a new venture as a side business first, working a day job and then building the new business on weekends and evenings.  And again, this can be just as hard a way to launch a business because if you’re not careful it can end up turning into an expensive hobby.  But – and I’ll be honest with you here, most businesses take at least two years until they get to the point where they can pay you a wage that you can live on.  And unless you are in the very fortunate position of not needing to have an income, then the early years of your business are always going to be a balancing act between needing to have an income coming from somewhere and being able to give enough of your time and focus to building the business.
 
Sometimes people take this to the other extreme though.  The amount of times we’ve had a 1-2-1 with a new Vegan Business Tribe member and they have said “Right, I’ve just quit my job, I’ve got about three months of savings in the bank so I need to make this new business work!” and the first thing I say is “OK, this is what you are going to do – Monday morning call your old boss, apologise and get your job back”. 
 
And I think I blame programmes like The Apprentice and Shark Tank for making people think this is how business works.  It is extremely rare that someone will start a business and it just works as the plan they had on paper. Usually what happens when you start a business is you find success in a completely different place to where you thought you would.  And that means we need time.  We need time to test, we need time to make mistakes and learn from them before we bet our houses on the business. Because you should only ever put money into a business to scale up something you have already proven works to make it work better.
 
And what all this means is that when you start a business, you might need to provision a source of income for yourself (perhaps even a couple of years’ worth) from somewhere else.  Some people have savings, some people can live off the income of a partner, but for many it means having a ‘day job’ at the same time you are building up your business – and there is no shame in that whatsoever.  It’s an important part of many people’s entrepreneurial journey.
 
To give an example, Lisa recently interviewed Vegan Business Tribe member Ngwarfu Tansie for our monthly feature in Vegan Food & Living Magazine.  Ngwarfu decided to create her own vegan food delivery business during the first lockdown.  She put her Cameroon-inspired dishes on a takeaway platform called Get Vegan Grub and trialled delivering her dishes around Manchester – all made in her home kitchen.  And people loved her food and she got amazing feedback.  Now, at that point she could have just quit her day job and gone full time into food delivery – but what a way to kill a fledgling business!  Putting that amount of stress on your new business, to have it have to deliver your full income while you’re still working out what works, just creates a really poor environment for growth.  All the decisions you make are dictated by short-term financial pressures rather than long-term growth.
 
So at the point where Ngwarfu did realise that the business had a future, when she’d proven people would pay money for her food, she did actually quit her day job.  But instead of putting her new business ‘Gwarfuvegan’ under all that pressure to perform, she instead took a part-time job that paid just enough to cover all her monthly bills, with a little bit of belt-tightening and saying no to a lot of social activities.  And the reason I like that was her response is that Ngwarfu went for a third option instead of just thinking in terms of all or nothing.  She made some sacrifices, she freed-up a whole lot of time that she needed to give to the business to make it grow, but she didn’t just quit her main source of income.  We’ve seen other Vegan Business Tribe members do the same thing.  Graphic designer Katy Wade set up her vegan graphic design business Little Victories in her spare time and started to pick up her own clients.  At the time she was actually working as the company designer inside a large commercial business and when she was considering quitting the day job to concentrate on her own business, the company actually proposed that instead of Katy just leaving, they instead became one of her first customers.  This meant she still had that foundation of regular work on which to launch her new business but she still had the extra time that no longer being employed by the company gave her.  And this is an arrangement that I’ve come to myself with employees in the past, when they were looking to leave to set up their own thing but I was keen to keep their skill sets. Giving them two or three days a week as a subcontractor was often better than losing them entirely, and those arrangements had a lot of benefits to me as an employer too.
 
So it might be that if you’re at the point where you’re thinking about quitting the day job to focus 100% on your own business, that you look to see if there’s that third option like Ngwarfu and Katy took.  Take a look at the job you are doing at the moment, could you either cut down to part-time or perform the same work as a freelancer or remote subcontractor working fewer hours?  Or could the company you’re working for now actually be your first customer.  And if that’d not going to work, then instead of quitting the day job entirely to focus on the new business, can you do it in stages?  I knew one person who quit his full-time job when he launched a new business but got a job as a postman doing early morning deliveries so that he’d have the bulk of his day free to work on building his business. Having that separate source of income is really important in the early days.  It allows you creativity.  It lets you test out ideas without everything, including your mortgage, riding on them.
 
BUT – and this is a really big but – at some point, if you are going to build a business then you need to decide to actually BUILD a business. The thing that often stops a business growing is the person who founded it.  You are often your company’s most limiting factor, and as a founder of a business it’s important that you recognise this and get out of the way of your company’s growth.  If you are the bottleneck in your business then you need to start letting go and building a business that can operate without you doing every single thing.  If you have proven that your business works but you know it’s being held back because it’s not your main focus then you need to start clearing the board.
 
So how do you know when it’s time to do that?  How do you know when it’s time to quit the day job and go all-in with your business in order to make it successful?  Well, we’ve already touched on the answer – you don’t give up the day job until you’ve already proven the thing you are giving it up for works.  In other episodes I’ve mentioned the story of Innocent Drinks.  The founder Richard Reed and two university friends were running a small business making fruit smoothies. And one day they decided to go all-in, they bought £500 worth of fruit and took a stall at a London music festival.  Above the stall, they put up a big sign that read: ‘Do you think we should give up our jobs to make these smoothies?’ and had two recycle bins for people’s empty bottles.  One bin had ‘no’ on the front, the other had ‘yes’.  By the end of the day, the ‘yes’ bin was overflowing so they all resigned from their jobs to set up Innocent Drinks.  Now, of course it wasn’t that straight forward and they actually went through a really hard time in the early days – but it illustrates the point.  They didn’t quit their jobs when they had the idea, they didn’t even quit their jobs when they started, they quit their jobs once they had proved they could sell what they were making and had confidence that people wanted it.  And not just their friends and family, but complete strangers.  And that’s the benchmark that you have to hit too.  The very hardest point of any business is proving the idea.  As one successful vegan business owner told me when I interviewed him, the job of any entrepreneur is to try and kill an idea as quickly as you can.  To either prove or disprove the idea you have on your hands.  Because why spend three to five years of your life on an idea that was always destined for a dead-end?  And until you have proven that idea, you need to make sure you keep hold of that income coming from somewhere else.
 
And that gives you a real focus to your business.  If you want to quit the day job then put all your time and resources into proving your idea works so that you have the confidence to do that.  And that isn’t just having a business that works on paper, that means actually getting people to pay you money.  That means proving you can successfully find customers.  Vegan Business Tribe was not funded by our members in the first twelve months, it was funded by the other consultancy work that Lisa and I do.  That other work gave us our income and covered our bills, and what was left went into proving the idea of Vegan Busines Tribe. Could we first get people to sign-up to the website for free?  Then could we get people to actually take a paid membership?  And could we get enough members to build a business on?  In fact, you could have said that during that time, Vegan Business Tribe WAS just a very expensive hobby because it was costing us way more than we were earning from it!  But Lisa and I knew that until we could prove all these things to ourselves that we had to keep our other sources of income.  But that gave us a lot more focus, because as much as we enjoyed the work we were doing with other companies – we LOVED doing Vegan Business Tribe.  And we were able to put together a cash-flow spreadsheet that showed us just how many members we needed to be part of our Vegan Business Tribe mission before we could give up the other work we were doing.  Once we had that number, then getting to it became our number one priority.
 
So if you are thinking about quitting your day job, do you have that figure worked out?  Have you done the financials that tell you at what point the company will be earning the bare minimum you need to cover your living costs?  How many units a month do you need to be selling or how many customers on retainers do you need to get there?  And how does that translate to a date in the diary?  Because if you extrapolate from your current sales and rate of growth, you should be able to use that data to give you a date when you can quit your day job and focus on the business full time.  And once you have that, that gives you your target, that gives you energy and focus to make it happen.  In fact, you will start doing everything you can to bring that date forward!  If picking up two new customers a month means it will take a year until you hit the date where your figures say you can quit your day job, then what can you do to pick up four new customers a month to bring that date forwards by six months? And if your projections show that you’ll never reach that point, then what are you going to change in your business?
 
And you might say I’m advocating being overly cautious here.  But I’ve seen too many good businesses give up simply because they ran out of either money or energy – often just at the point when they were starting to work it all out.  They burned it all up in the early days because they went all in before they had proven that their business or idea actually had a future, and I don’t want this to be you.  Go all-in once you get to the point where the only thing stopping your business from growing is lack of time, not a lack of customers loving your product.  Do pop-up shops on weekends to find a customer base before you commit to a three-year commercial lease.  You can go from a full-time job to a part-time job to give you the extra time to further expand what you’ve already started growing. And then, when you’re at that point where you’re rushing home every night after your day job to fulfil your orders – that’s when you know you’ve proven the concept and you’ve got a business that is worth all of your time.
 
And this is equally important.  Because business growth needs momentum, and if that momentum starts faltering because you don’t have the confidence to make the leap then that can be just as damaging to your business.  If you are actually looking to grow a business, then you need to decide you ARE going to grow that business.  You need to get out of your own way.  This is why you need to have that figure worked out and that date on the calendar.  Base your decisions on hard facts and projections based on what income you need.  And be ready to make that move once you reach that line in the sand that says you can.  Once you meet those projections then make your move straight away. Don’t still be undecided about giving up the day job in a year’s time from now because the market will move on and the momentum you built up that enabled you to hit that target will fall off.
 
OK, so let’s round this up.  So if you’re wondering if it’s time to give up the day job, how do you make that decision?
 
  1. Most businesses take at least two years until they get to the point where they can pay you a wage that you can live on.  You should factor that in when starting your business – which might mean making other provisions for income for quite some time.  Trust me, putting yourself under huge personal financial pressure makes for a terrible environment for trying to grow a business.
  2. You don’t need to just quit your day job, there is often a third way. Such as swapping out your current job for a part-time one to give you more time to focus on your business, or even taking on the company you currently work for as your first client!
  3. The first job of any entrepreneur is to prove or disprove your business idea as soon as you can. All your early energy should be spent on this.  Why spend three to five years of your life on an idea that was always destined for a dead-end?  And until you have proven that idea, it’s a good idea that you keep hold of that income coming in from somewhere else.
  4. Work out how many customers you need to be able to give yourself the bare minimum income you need.  Then work out at your current acquisition rate how long it’s going to take to get there.  That’s your line in the sand.  Put that date in the diary then work on what you need to do to bring that date forward.
  5. Momentum and energy are the most important things when growing a business.  So once you hit that line in the sand take action to keep that momentum going.  Don’t spend a year trying to decide if you are giving up your day job or not – commit to making the move when you hit the figure you have set for yourself.
 
And in fact this podcast is quite timely because Lisa and I are actually at the time when we’re asking the same question: is it time to quit the day job?  As I said earlier, Vegan Business Tribe has been funded from our other businesses but we always had a figure in our spreadsheet of how many members we needed in order to give up the other work we do and spend 100% of our time helping you amazing people. And, after having a huge influx of new vegan businesses into our community in January I have to say that we’re getting close to that figure.  We’re getting close to Lisa and I being able to just do Vegan Business Tribe full time – there is a date in the diary.  So I guess I want to end this podcast with a question to you – and if you are already a member of Vegan Business Tribe then you can answer this question in the community hub, or if you’re not you can drop Lisa and myself an email on hello@veganbusinesstribe.com – but just like Innocent Drinks, should we give up our day job and do Vegan Business Tribe full time?  I would genuinely be interested to hear your answer!
 
OK, so that’s it – and like I said, if you are not already a member then do head over to the website because it’s a really exciting time for your company to get involved with Vegan Business Tribe at the moment – and we wouldn’t just love you to be part of our journey but we want to be part of yours too.  The amount of opportunities that people have found through Vegan Business Tribe is what’s given us all our energy, the amount of link-ups we’ve seen and even the success stories – we’re still absolutely chuffed that one of our members got the job of Joey Carbstrong’s cameraman through the community!  But it’s because of this that we really want to get as many vegan businesses onboard as possible.  We have proven there is real strength when we come together as vegan businesses, there is strength in community and I know that your business will be more successful if you’re part of it too.  Jut head over to the website at veganbusinesstribe.com and click on the big join button on the homepage to find out everything you get access to as a member, but also know your support will be helping countless other vegan businesses too who are all helping to bring about a vegan world.
 
So thank you so much for your time, Lisa and I really appreciate you taking the time to listen, let me know if you think we should give up our own day jobs to bring you Vegan Business Tribe with 100% of our time – and I will see you on the next one!

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