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Start-up Advice

10 Things You Must Do Before Quitting Your Job To Start Your Company

You have a dream but you need a checklist to achieve it.

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So you’ve decided you’re ready to take the plunge, quit your job, and get your own company up and running. You have an amazing business idea you are ready to launch. You’re probably excited and nervous at the same time, which is perfectly understandable. If this is the case, you need to take a step back and remember that you simply can’t walk into work tomorrow with your resignation letter.

Being impulsive could be a huge mistake so you need to create a list of the advantages and disadvantages you will face when quitting your job. If you decide it’s still what you want to do, there are a few things you must put in place before you quit.

To help you get ready before your big day of freedom, I’ve highlighted 10 things you should do before quitting your job and starting your own company.

1Do research

Quitting your current job before getting your company off the ground may seem like the best option, but trust me, it’s not. The best way for you to get the wheels rolling in a safe and profitable way is to grow your business while you are still employed. This will make your transition from an employee to an entrepreneur a little smoother.

You can’t jump head first into building your new office block or warehouse if you haven’t done your research. You need to know that you have a product or service that you know the ins and outs of, that is unique, and above all, that will sell.

Related: Branson: Know When To Quit Your Day Job

Background research you need to do includes, but is not limited to:

  • Learning everything about your product or service
  • Knowing your audience and buyer personas
  • Researching your competitors
  • Finding the right teams
  • Knowing what your most profitable sales and marketing channels will be.

2Create a business plan

business-plan-creation

Once you’ve done your research, you need to put it on paper. Laying out a business plan before taking the plunge will be a key success driver.

Your business plan will be something you will show to potential investors, partners, and other company stakeholders.

It typically includes:

  • An overview
  • An executive summary
  • A company description
  • Your objectives, vision, and mission statement
  • Information about the market and industry into which you are entering
  • The strategy you are going to follow to enter the market
  • The team you will have
  • A marketing plan
  • An operational plan
  • A financial plan
  • An appendix with more detailed information.

3Outline Your Funding Options

Before looking at funding for your company, you need to have your own personal finances in check. If you quit with just a couple of hundred dollars in your pocket, with rent, insurance, and your phone bill to pay, you may find it difficult to focus your efforts on your new company.

In addition to planning your personal finances, you will need to have a plan for your startup. You’ll typically have three options:

  • One or multiple investors
  • Your personal savings
  • A grant or award for your project

Either way, you need to plan in advance because if you can’t get the capital to get started, your business will stagnate and you will be faced with very few options.

Related: 6 Resources For Start-Ups Looking For Alternative Funding

4Create the structure for your business

You need to have the structure for your startup in place before you can quit your job, specifically, your legal structure.

There are various types of businesses entities you could become:

  • A corporation
  • A limited liability company
  • A partnership
  • Sole proprietorship

You need to consider:

  • The operational complexity
  • Liability
  • Taxes
  • Control
  • Capital
  • Licenses, permits and regulations

5Leverage your resources

Leverage

Of course, you do not want to spend money if you can avoid it. You need to look at the resources that are currently available to you. For example, you may have a friend who is a web developer; they might be able to give you special rates and work for you on a need-to-know basis.

You should contact friends who have started their own business and ask them if they know a good accountant, marketing expert, and so on. Think about joining an online book club to learn more about entrepreneurship, try Read with Entrepreneurs by Cynthia Johnson.

Lastly, contracting all your experts could become expensive. Consider investing in online education for your team that will teach them skills, such as SEO, email marketing, and much more.

6Leave on a good note

Quitting your job without working your notice period, gossiping across the office, not completing your final assignments, and not training your replacement could be the worst decision of your life.

Of course, you are leaving to start your own venture, but you cannot be sure that tt will be a success or that your old company won’t come in handy one day. Leave without burning any bridges and you may be able to cash in a favor one day. Your old employer may even send clients your way knowing that you are a trustworthy businessperson.

Related: 9 Reasons To Quit Your Job As Soon As You Can

7Don’t forget the smaller planning details

As an entrepreneur, it’s easy to become the type of person that can see the big picture. Unfortunately, if you don’t focus on the small details, you won’t be able to mold the perfect company.

Planning is key, and little things such as choosing the right social media channels, keeping up to date with emails, or even remembering to file your taxes are vital to your success.

8Choose your new office space

When planning the day when you quit your job, many assume that they will work from home until their company is off the ground and they have a team backing them up. Although this could work in the short term, it’s not a feasible option in the long run.

If you choose to work from home, you need to find a balance between your personal space and work space. Working in bed, on your computer, all day, every day will lead you towards an unhealthy lifestyle that could have a domino effect on the progress your startup makes.

9Create a portfolio or resume

portfolio or resume

You may think that owning your own company means you’ll never have to create another resume in your life. Wrong!

Bulking up your resume and/or portfolio is a key driver when building your new business because you will need to prove to your investors, teams, and even clients that you are worth their money.

10Finally…

Remember that starting a new business is going to be more challenging than you imagined. You’re going to have to make the planning process your full-time job before you even see an income.

That said, with the tips outlined above, you could make it the best, most profitable adventure you’ve ever embarked on from both a professional and emotional point of view.

This article was originally posted here on Entrepreneur.com.

Dave Peck was an early champion of influencer and social media marketing who has been active in online communities for more than a decade. He is the author Think Before You Engage: 100 Questions to Ask Before Starting a Social Media Marketing Campaign. Peck has helped build online communities and develop social media strategies for Coca Cola, Wells Fargo, The Grammys and many others. As PayPal’s Global Head of Social Media & Influencer Marketing, he is focused on defining the company’s voice and creating stronger connections to customers through online communities.

Start-up Advice

Entrepreneurs! Do You Know What Your Customers Want?

Take off those rose-tinted spectacles and start looking at your business the way your customers do.

Chris Ogden

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Do you know what your customer’s need? Have you really looked at their problems and challenges and asked yourself how your product or solution helps solve them? Do you even know if your business addresses any one of the myriad pain points they face every day in their personal and professional lives? If your business talks to other businesses, are you speaking in the language they want to hear? If you don’t answer a definitive YES to every one of these questions, then you need to start paying attention…

Put in the effort

Research, research, research. Find out what people need through all the myriad of digital and physical research channels available to you. And when you engage with your customers in person, ask them questions and write those insights down. Listen.

Related: 5 Reasons Why Your Business Is Losing Customers

Bad feedback is great feedback

If clients are unhappy, they talk to you. This is good news. Use this feedback to build solutions that change these issues into advantages. This is when you should consider building an open feedback loop or mechanism into your business to ensure that you are getting the best possible insights from your customers. I

It’s also a good idea to check their criticism against reality before you spend thousands on fixing a problem that doesn’t really exist. For example, if they complain about poor customer care, assess your process and see how many complaints you have. It may be that one customer happened to deal with that one unhappy employee.

Understand their business

Your client has their own clients who have their own clients, and so on, and so forth. Take the time to get to know their business and their market. Often entrepreneurs don’t get to know how their client’s businesses work and they miss a crucial trick. By spending time with them and listening to them you get to understand their pain points and their needs. This way you can be the one who helps to fix their problems properly.

Related: How Well Do You Really Know Your Customers?

Don’t stop innovating

Don’t fear the ability to change something to suit a client’s needs. Your products and services have to evolve constantly as your market and consumers are changing constantly. You need to add value, change features or adjust your services dependent on the business you are in. Pay attention and innovate.

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Start-up Advice

Why Failing Is A Necessity Proven To Guarantee Success

We should always have this at the back of our minds whenever we have that nudge to give up on our dreams.

Matthew Mordi

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There comes a time, especially after a terrible defeat, when we feel like giving up or even quitting. The defeat clouds our minds and make us forget completely what victory feels like. We forget the successes and judge ourselves solely on the defeats. This feeling isn’t unique to a single individual as even the most successful businessmen, inventors, politicians, world leaders have experienced failures at different points in their lives.

We all love success stories. It’s a matter of fact that behind every success story is a large amount of failed attempts. The notion of overnight success is a myth. It took the Wright brothers between four and seven years of scientific experimentation and several failed attempts before their maiden flight covering a distance of 852 feet which lasted a mere 59 seconds was achieved.

History is replete with instances of individuals who were written off after a terrible fall from grace. These individuals, against all odds, didn’t give up.

Related: Having The Perfect Product Isn’t Enough To Keep You In Business

Tiger Woods, for example, has for the most part of his adult life being in the public eyes. That’s why when he went to his very public divorce, tales of womanising, dabbling with prescription drugs. Also plagued by injuries, his golf was seriously failing and in danger of being a “has been,” analysts advised he should just retire. It was obvious Tiger had a different plan up his claws by winning his first PGA tournament in five years.

His recent resurgence in form is testament to the fact that no one has the stop button to our life or life’s dreams and ambition. No one but you. It’s only when we stop innovating and trying that we’ve failed. Having lost a business deal that had the chance to change our lives positively forever isn’t the end of the world. Hence we need to reinvent and innovate.

If achieving success was easy, the vast majority of people would be successful. We have to put in the work and our skill to be able to achieve success because the most worthwhile things don’t come easy.

Defeats, if seen from a positive perspective, bring out the best in us. Victories don’t. Victories swell our egos, fill us with the air of invisibility, and this is dangerous. Hence we need a large dose of failures and defeats to bring us down to earth, to make us learn and better appreciate success the moment we’re able to achieve it.

What then do we do when we experience a poor run of defeats that make us doubt our abilities. Being fixated on the defeats for one, isn’t the solution. It has the tendency of making us forget what it felt like to win and totally derail us from our set goals. This, in itself, is a problem as it may lead to a state of unhappiness.

Related: Why Small Businesses Are Unable To Pay Staff Salaries

The bad results we might have experienced isn’t an indication of our inabilities, it’s an opportunity for us to look at the venture from a different perspective and take necessary action to improve or try a different approach towards achieving our aim.

Defeats can be depressing when we have dependents who rely on us for guidance and in some cases sustenance. Dependents could be in the form of a spouse, children, wards, parents, even staff. The pressure can be enough reason for some to give up and settle for the safer option.

With the decision to settle comes the likelihood of regret which may be more depressing than the expectations of dependents. Fortune they say favours the brave and nothing worthwhile was ever achieved without the possibility of failure.

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Start-up Advice

Why You Need Smart Legal Foundations For Your Start-up

The legal background to a start-up might not be the most exciting area for an entrepreneur, but it’s your foundation for growth. Are you aware of everything you need to have in place?

Kyle Torrington

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One of the best parts of what we do is helping start-ups — the right legal foundations can mean the difference between a start-up that’s geared for scale, and one that needs to retroactively put agreements, checks and balances in place. If you’re aiming for growth, you want to get these foundations right from the get-go.

When Benji Coetzee launched EmptyTrips, a hot up-and-coming start-up 16 months ago, Legal Legends was on the ground floor with her. Although your start-up trajectory may not be identical to that of EmptyTrips, many of the foundational principles canvassed in this article will apply at some point in the lifecycle of your business. They highlight what you should be thinking of from the word go.

Laying the right legal foundation

By the time we were introduced to EmptyTrips, they had already registered their entity as a company and had started to prepare for their first beta public launch in April 2017. When our dealings with the start-up began, the business had already enjoyed a quick and accelerated cycle.

As with all start-ups, the founders had a clear vision and objectives. Unlike too many start-ups however, Benji understood how important the right legal foundations would be, particularly as the business matured and required different support structures.

The following three actions are a good example of the legal foundations all businesses should consider, particularly if growth is a part of the founder’s vision:

1. Why you need trademark protection

Given that EmptyTrips is a digital solution, with limited physical assets, protecting intellectual property as ‘soft’ assets was critical to its differentiation and valuation given the recognition of brand value over time.

At first, we set out to ensure that EmptyTrips’ marketing materials and properties, such as company name, slogan, and product names were protected sufficiently from use by others. This was done by filing for various trademark registrations.

A trademark is a sign or symbol that is unique to your business, and which distinguishes it from other businesses. The most common forms of trademarks are business names, product names, logos and slogans.

By registering a trademark you are granted exclusivity over the use of the name, slogan or logo, and may prevent others from using similar names, slogans or logos in their business in the future.

Related: [PODCAST] Benji Coetzee, Founder & CEO Of Empty Trips – How To Disrupt A $8 Trillion Logistics Industry

When it came to EmptyTrips, they had already filed a trademark for their business name, so we focused on protecting the names of the different service offerings on the business’s platform as the solution evolved and pivoted. These included Trip Exchange; Freight Open Exchange; SureFox and RailFox. As the business grows and product lines are added, we will continue to update this list.

2. The importance of website legal documents

EmptyTrips is predominately an online marketplace solution to enterprises. It is a digital transport brokering agency that has been developed to source, match and market available transport capacity (empty space on trucks, trains, vessels and so on) to commercial freight with on-demand supporting financial products (insurance etc).

Our next task was to prepare the documents that would govern the relationship between EmptyTrips, its users and service providers. These documents, as with most websites, consist of both a terms of service and privacy policy.

Each company’s Terms of Service will be unique to that business, market and customers, but privacy policies are universally required by law.

A privacy policy is a written document available for all users to inspect on your website and which they are required to agree to. It sets out the different kinds of personal information that you collect, coupled with how you store that information, and what you do with it. A privacy policy is required by the Protection of Personal Information (POPI) Act No 4 of 2013, and the General Data Protection Regulation (GDPR) (EU) 2016/679 if you are collecting personal information from European citizens.

In the case of EmptyTrips, their pick up and drop off address, business information to cater for the pick-up and drop-off of goods by carriers, personal information such as the name of the carrier, and payment details, need to be recorded in the privacy policy. In addition, certain elements of the information, such as pick up and drop off locations being shared with potential transporters, need to be mentioned.

If you do not have a privacy policy in place on your website, Legal Legends has a cheap automated version available at the following link if you would like to order one: www.legallegends.co.za

3. The legal frame work around outside investment

Like many high-growth starts-ups, Benji and her team reached a point where outside investment was needed. This is an area where your legal partner is key. Apart from attending to various due diligence meetings and ensuring proper governance controls, we were tasked with ensuring that the contracts for external investment were prepared in a manner that sufficiently protected the interests of EmptyTrips and its founding members.

It’s common during a seed or series A round of funding for an investor to present the start-up with a term sheet detailing the nature or basis of the intention and extent of their investment, as well as all the terms relating to the governance of the company that they would like to put in place.

In this case, the institutional investor presented EmptyTrips with a term sheet that detailed the monetary investment that the investor would provide over a number of years, the monthly draw-downs of the investment that EmptyTrips would be entitled to, the number of shares that the investor would be issued for their investment, as well as the manner in which the governance of the company would be changed in order to protect their investment.

Often, and this applied to EmptyTrips, the terms contained in the term sheet require a new shareholders’ agreement and/or memorandum of incorporation in order to protect the interests of the minority shareholder (the investor).

A shareholders’ agreement governs the relationship between the shareholders of the company and their ability to administer the company.

A memorandum of incorporation governs the relationship between directors, shareholders, prescribed officers and the company.  A standard memorandum of incorporation is issued when a company is registered, but it will often need to be amended at a later stage if, for example, measures to protect the minority shareholders are introduced.

A memorandum of incorporation can regulate the same aspects as a shareholders’ agreement, however, the main difference is that it is a public document available for inspection by anyone, whilst a shareholders’ agreement is a private document.

In addition, if there is any conflict between a shareholders’ agreement and a memorandum of incorporation, the shareholders’ agreement will not apply and will be voided to the extent of its inconsistency.  This often means, as was the case with EmptyTrips, that certain aspects of the shareholders’ agreement that provided for protection of the investor required a redraft of the memorandum of incorporation so that the two documents were aligned.

A shareholders’ agreement might not be enforceable until a memorandum of incorporation has been aligned with it.

Read next: 5 Lessons From The Legal Legends On Pivoting

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