Many founders are fed up with their permanent employer and would rather be their own boss. But when is the right time to cancel? We asked experts.
Realizing your dream of owning your own startup – there are a few things to consider. momcilog/Gettyimages
Inflexible working hours, little self-determination? Always implementing other people’s ideas and not your own? At some point that was no longer enough for Kati Ernst. After twelve years at the consulting firm McKinsey, she wanted to take her working life into her own hands. “If there isn’t a good part-time job, I’ll just create my own.†So she quit and founded her own company with Kristine Zeller: a period underwear startup called Ooia.
It is a path that many founders have taken. For more flexibility and independence than the ex-employer could offer. So just quit and become self-employed. As tempting as it sounds, this step must be carefully considered. Ultimately, you forego a comparatively safe and therefore comfortable workplace. And takes a lot of risks. But when and how do you know it’s time to quit your job and start your own business?
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Everything depends on the idea – and getting started
There is no such thing as a right moment, says Kati Ernst. But she thinks: “If you have an idea, you should get started.” Because it is much more difficult to find than anything else. When Ernst heard about period underwear from the USA for the first time, she knew immediately that she wanted to bring it to the German market. So she decided to start a business from one day to the next. “If you are convinced of your idea, you should dare.“
Founder Jaclyn Schnau thinks so too. “If people have enough passion for a project, that is a clear sign to me that they are ready to start a business,†she says. Schnau started her own company, “Pumpkin Organics,” after she was diagnosed with the autoimmune disease Hashimoto’s, an inflammation of the thyroid gland, in 2014. She really wanted to promote healthier, organic food, especially for children
As nice as it sounds, just having a good idea is not enough to start a business. Everyone should consider whether it really makes sense to become self-employed. Jaclyn Schnau also thinks so: “Being my own boss is great, but also very stressful.†You often work more, have more irregular income and take a lot of risk. “Founders should always be ready for 24 hours of power and responsibility,” says Schnau. You have to have maturity in order to be able to deal with difficult situations. Jaclyn Schnau believes they should also be able to bring people together, sell their product and motivate their team.
Keep risks as low as possible at the beginning, even privately
According to founding coach Florian Bahm, you should definitely consider beforehand whether you are the right type of person. Once you have done this, planning is everything. Founder coach Heike Sohna advises her customers to first do a reality check and be honest with themselves. Is the idea mature? Do you have enough financial reserves, ideally potential customers or investors? Only if you can answer both with yes does she recommend quitting the job: “I advise my customers not to take any risks or at least to reduce them as much as possible,” says Sohna. The start-up coach Florian Bahm also recommends that founders only resign when they can realistically assess their success and have the necessary resources.
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Financing should be available, especially private funding. Kati Ernst thinks so too. Before she quit, the Ooia founder calculated whether it would be possible to finance the family without her salary. “Back then, I made a private business plan and calculated how much money we needed,” says Ernst.
But it’s not just financial matters that should be considered before setting up a business. Heike Sohna also recommends clarifying private problems. “For example, it’s not good to be in a breakup or an unstable situation when you start a business,†she says. After all, you first have to concentrate fully on building the company.
A good support network
The most important thing here is the support of friends and acquaintances. “You need a good network to support you. That believes in your idea and, ideally, invests in you,” says Jaclyn Schnau. The founder of Pumpkin Organics worked for large companies for years and was previously CEO at Diaper Bar. Over the course of her career, she was able to build up a good network that supported her with advice and support when setting up a business. Kati Ernst also repeatedly integrated her network. “I met colleagues and acquaintances for coffee and asked if they could help me,†she says. Heike Sohna recommends presenting your idea to other people as often as possible. It helps to see whether it is already mature.
Whether and when the right time is depends heavily on your own situation. However, the experts advise founders to have at least a concrete idea and well-structured financing before they cancel. Only then will they be ready to start their own business.
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“No, not everyone can just start a business in Germany.“