Aspiring entrepreneurs often ask how they can tell when it’s time to make the leap, quit their jobs, and really go for it. There are two indicators you can look for to know that “it’s time.” First, it’s time to get serious when you’re emotionally ready to make the leap. In a way, the emotional aspect is kind of like being in love. You know that you’ve struck upon the right idea…when you know. When this happens, you’ll have a gut feeling that this is “the one” and there’s no choice but to move forward.
Second, it’s time to go for it when you’re financially prepared. Starting a company takes time and capital, so you must have cash in the bank before you leave your job and eliminate your income. The general rule of thumb is that you should have at least 12 months of expenses in the bank (this includes both personal and business expenses). If you have a spouse and kids to support, your expenses will obviously be higher. Many bright entrepreneurs with promising ideas have failed unnecessarily because they didn’t have enough money to get the company off of the ground.