Quitting your job to launch a business? Prepare your personal finances first

Subscribe to enjoy similar stories. Thinking of quitting your full-time job to build a startup or business of your own? Along with a business plan, it’s critical to prepare your personal finances for the early years of the new venture. “You need to survive in order to run the business," said N.

Raghu Kumar, a Bengaluru-based registered investment adviser, 41, with the Securities and Exchange Board of India. Mint Money spoke to three individuals who left their corporate jobs to become entrepreneurs, to get their learnings on managing finances at home without a steady income to count on. Well before you quit, start building a corpus which will fund your home bills until the new business takes off.

Begin by calculating your monthly expenses, including obligations like rent, children’s school fees and insurance premiums. Estimate how long it would be before your new business might start earning revenue. “Whatever your first thought is, just double it in terms of expenses and timelines," said Jugal Wadhwani, 39, who launched his own software-as-a-service company in Noida.

For nearly 10 years, Wadhwani worked at startups or companies where he got a steady paycheck, including as a digital transformation consultant for Radio Mirchi, but he quit in 2023. He had estimated it would take around six months to get revenues going, but it ended up being more than a year before the first deal happened. For the first few years, “you’re just struggling.

Nobody wants to be with you, even if you have the best of products or services," said Wadhwani. While his business is generating revenue now, it is yet to make a profit. So, drawing a salary or earning income from the business could be a while away.