So do I quit my day job?

The attractions of running your own business are many - you can be your own boss, pick your own hours, build some financial freedom, build an asset that may fund your retirement.

The reality is to get there will involve a decent length of time where your income drops - it's the risk reward tradeoff that goes with building your own business.

This question comes up a lot - how do I build up my business on the side to the point I can then quit my day job and still have an income?

A very few have managed it (normally those who can go without sleep). For the majority, the short answer is that you can't. 

What can be done is to manage the transition from a salaried job to a business that can pay you. The speed of that transition is determined by 3 factors - the size of the market demand for your product, your risk appetite,  and your lifestyle requirements. 

Size of market demand for your product

20 years ago a Yoga studio in a western country would have struggled to get off the ground. Now there's one in every gym.

Technology companies are the most public example of this phenomenon - while the founders of Uber may have been able to build their product 15 year ago, they would not have been able to reach their customer base without the advent of social media. 

If your market size is not big enough to support a business (or a key platform is missing, such as acceptance that yoga is not some black magic voodoo) then chances are your transition will take substantially longer. If that's you, then your answer to the next two questions become even more relevant. 

Risk Appetite

This one's a spectrum and is a factor of the belief you have in your product vs your own self confidence and belief. Where that belief matches a customer demand (see above) then success means you'll be the revolutionary who changed the world. If that belief is not matched by a customer demand then you'll prove the many naysayers in your life right. 

Where your self belief, belief in your product and a matched demand from the market line up, then the next factor is how far out of your own comfort zone are you prepared to push yourself, and for how long.

Your risk appetite will be tested during the period between when your regular income drops from your day job and your business being able to pay you. There will be a gap - the above factors will determine how long that gap is. 

Lifestyle

Remember when you were 19 and could live on the smell of an oily rag? Think back now to what you earned and whether you could live on that now. 

Yes, you now have a bigger house (& mortgage), kids in school,  a much nicer car, plans to go to London for a friend's wedding next year. Your corporate salary has grown and your lifestyle has grown to match it. 

This one is simple maths with often complex decisions behind it - the more you can simplify your lifestyle, the longer your runway (see above on risk appetite).

5 years ago I jumped from a corporate job to freelancing. In corporate, I spend tens of $000's every year on clothes, shoes and fancy jaunts in Europe, US & Asia. It helped me deal with the stress of the corporate environment. I also had two properties

Just before I left, I sold one of the properties. Once I left, the need for the retail therapy reduced substantially. I still buy beautiful things - a lot of the fun is finding the really good value pieces at the markets, the whole process is a creative outlet rather than stress relief. 

That was my own little secret to managing the lifestyle issue. The main difference here was my choice did not impact other people - hence the support of those around you is key to how you manage this.  

These 3 factors all come into play in how you manage the transition and the speed with which you'll push yourself enough to make headway, without crippling yourself with financial anxiety (which can kill off every creative impulse you have) on the way through.