What time is the right time for starting on your own?

You have a great idea; you have gone through several rounds of testing and validating your idea with a sample of your target customers. You have even sounded out your idea with the experienced bigwigs or maybe even with someone from a VC circle! But the thought of acting now [quitting your high paying job] gives you chills. Why? You start to make a list of things [reasons] why it is not a very good idea to go for it now and maybe go for it sometime later. The list of reasons would typically vary with the stage of life you are in. Many of the working professionals in India go through this bafflement and hence are unable to start on their own. There are two predominant stages, when one usually feels the entrepreneurial restlessness set-in, and hence holdups during these stages need to be understood. I have divided the type of reasons that would probably emerge based on one’s stage of life.

Stage 1: 10-13 years of work experience

[Age – early 30s]

Pending Housing Loan: You have recently bought a house towards which you are paying EMIs calculated on an average at the interest rate of 9%. That’s a big chunk of money if the outstanding loan amounts to 80% of the total cost of the house or an apartment. The cost usually hovers around 60-70 lacs for a luxury 3 bedroom apartment which the people of this age group would prefer given the needs of their families. This is usually the trend with this age group. The real estate cost can be much higher in cities like Mumbai.

Kids’ education: You have a family and your kid/kids are in school. You want to provide them with the best education and would want to send them to a school which can develop your child into a well-rounded confident adult. But then the school fees are very high and constitute a significant amount of outflow from your annual budget. Add to this the dire necessity of putting your child into as many extra-curricular activities as possible. All of these are expenses which cannot be ignored.

Spouse is a homemaker: When you entered the marital world you probably never imagined the extent of ensuing responsibilities. Your spouse stopped working as she had to raise the small kids.

Ever increasing inflation: It is tough to fight the ever increasing rate of inflation. No matter what the statistics say, the actual inflation faced by the people is way higher than published by the authorities. The rate of salary growth does not usually match the actual rate of inflation.

Provisioning for the future: You need to plan for the future also apart from meeting the current needs. Some of the obvious things are college education of the kids, your retirement plans and unforeseen medical expenses.

In this case a good practice would be to understand the financial outflows vis-a -vis the savings that you would have made. You will most probably understand the duration for which you can forgo any income. You should also do equally diligent financial planning for your start-up in order to understand the duration till when there will be no income. An ideal situation would be to develop a bootstrapping model for your venture. Read my article ‘Bootstrapping Mantra‘ published earlier to understand this better.

Stage 2: 1-2 years of work-experience

[Age – mid to late 20s]:

You are fresh out of college and have some corporate experience. You may not have yet gotten into the above scenario. But because of short work-experience you may not have yet saved enough or generated wealth enough to both invest in your start-up as well as think of taking up further responsibilities of marriage etc. Also, if you get into entrepreneurship early, and if the venture does not succeed, you are risking your career, since getting back to job with an entrepreneurial tag is very tough. Moreover you may find yourself in a situation where you would have to lose on number of years and start from where you had left.

As suggested above, here too, it will be an ideal situation if you chalk out a plan to bootstrap your venture at least till the time you think it is appropriate to approach for external funding.

The above analysis is based on a strong assumption that people considering entrepreneurial way do not have the buffer of significant inherited wealth or assets. In both the cases above, the person has to make a trade-off. In either case if there are better incubation facilities and small investor networks with proper mentorship, then the entrepreneurship can be a preferred career by many.

I’d like to invite here suggestions and opinions from the reader community, as every experience and situation is different. No matter how many permutations and combinations are discussed, no two situations will ever be same for this topic. The more the opinions are shared the more solutions will surface.

Mridula VelagapudiAbout Mridula: Mridula is a freelance writer. She writes on Entrepreneurship and has worked for a start-up in the past. To know more check out her profile at LinkedIn/Mridula Velagapudi



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