This article targets key aspects of your transition plan – the plan that takes you from your dream to your ideal business.
Transition Plan Tip 1 – Build a Financial Reserve. Prior to making the leap and quitting your day job, create a financial reserve. Building a reserve will give you confidence and provide you a financial cushion. You want to be free of concerns about covering expenses with too little cash on hand. Setting up payment terms with your customers is a must and managing account receivables is critical. However, if you have a cushion, you will be better positioned to manage cash flow to cover personal and business expenses as you build your business.
Action: Review your monthly living expenses, business expenses and your cash flow projections. Determine how many months of reserve you will be comfortable with prior to leaving your day job. Most financial planners recommend having a personal reserve of 6 months. I recommend that you add a contingency of 15% for unknown expenses that may arise and to brainstorm expenses that you may need to pay for yourself, like healthcare. Open an account and start saving for that reserve today.
Transition Plan Tip 2 – Reduce Energy Drains. As you look to launch your dream business, create an emotional reserve and plan for a timeframe when your personal life is on solid ground. Creating a business requires emotional support and a tremendous amount of energy. You will be the boss and ultimately accountable for all the decision making and business results. I have witnessed entrepreneurs create businesses through marriage, divorce, caring for elderly parents and the birth of children. It is possible, but typically undesirable based on the emotional and time considerations involved. You won’t always be able to plan for major life events but you can develop a reserve.
Action: Create an emotional bank account by eliminating those things that drain your energy. Negative people, things and situations that are incomplete or unresolved can drain our energy. Determine what or who is draining your energy and commit to five specific changes you will take to this week to reduce what is draining you. For example, you may decide to spend less time with negative co-workers or postpone your launch until after you daughter’s wedding.
Transition Plan Tip 3 – Determine How You Will Measure Success. Prior to launching your business and your 60- 90 day goals, determine how you will measure the success of your business. How will you ensure that your actions are getting you closer to your dream? We can take many actions that may or may not be yielding results. You’ll want to measure some key metrics like website traffic, website sales conversions, profitability, sales, customer retention, customer satisfaction, referrals, etc. Always have a metric in place to determine your success prior to committing to an action.
Action: Look at your top three 60 – 90 days goals and find a metric that suits each goal. Measure your progress weekly or monthly and determine if that goal is yielding results. Release your attachment to the outcome. If the specific goal is not bringing you closer to your dream job, find one that will.
Reflecting on these tips, create a transition plan and timeframe that works for you including reserves and measureable results that show progress.
