How do you know when is the right time to quit your day job?

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As the saying goes, if I had a nickel for every time someone asked me “When is the right time to leave my day job?”,  I would be rich.

Just the other day, I received the following email:

“Can you recommend a good strategy for leaving the “cube nation” when there are limited job opportunities should you fail at your own business?  Is there a formula to determine if you should stay at your day job? This is my situation and I know there are others who feel the same way.

The company I work for pays the best and offers the best benefits for technology people (which is my background and experience).  Most people I meet on the street have tried for years to get in my company. When I hear this I think I’m crazy for wanting to leave.  I know I could leave and possibly return, however I have already done this once and feel I might not get a second chance to return.

So essentially I’m frozen by the great pair of “golden handcuffs” with the fear of never getting a good pair again.”

This is a very typical situation for many cube dwellers.

For starters, this decision ranks right up there with:

  • How do I know if this is the right person to marry?
  • Should I buy this house?
  • Is it safe to sink $20,000 into this stock?

All of these decisions have both emotional and practical components. And they all involve great risk. Because they are totally dependent on your individual tolerance for uncertainty and change, there is no magic answer, as much as I would love one. But here are some things to weigh if you are considering quitting your day job:

1.  What is at the root of your fears?

If you are like most people, “When is the best time to leave my job?” is not the question that gets your heart racing.  Underneath that question are concerns like:

  • What if I fail miserably and fall on my face?  How will I get over the embarrassment?
  • What will be the impact on my relationship if I finally follow my dreams?
  • Will I lose my entire savings and end up eating leftover bits of hamburger from trash bins?

Napoleon Hill, in his 1934 book Think and Grow Rich names six basic fears that hold us back from success:  fear of failure, fear of poverty, fear of criticism, fear of old age and ill health, fear of loss of love, fear of unknown.

The thought of quitting your day job plays into most of these fears.  It is no wonder that most people sit in a perpetual state of “wait and see” instead of plunging head-first into self-employment.

So as a first step, be honest and dig down to figure out what is at the root of your fears. Then take action to address the problems and concerns.  Think you don’t know what you are scared of?  You may just be afraid of the truth.

2.  How much do you loathe your day job?


  • On a scale from 1=I don’t love my job, but it is fine for now to 10=I feel violently ill when I drive up to my building, how do you rate your day job?
  • The question of loathing is a key determinant in the timing of your
    departure, because if you have a high loathing scale, it is very
    probable that at least one of the following things will happen:

    • You will develop serious health problems like high blood pressure, migraine headaches, ulcers or an autoimmune disease
    • You will do something very inappropriate like attack someone in a meeting or skip an appointment with a very important customer
    • You will get laid off (for seemingly “business, not performance reasons,” when we all know better)
    • You will get fired
  • Unfortunately, there is no correlation between the degree to which you hate being an employee and the degree of success you will have as an entrepreneur.  I have a non-empirical hunch that some of the best entrepreneurs today were not management-hating grumblers, but rather generally positive and productive employees with bigger dreams than the confines of a corporate environment could handle.
  • Bottom line?  If you hate where you are, you better start making plans to leave before someone makes them for you.

3.  What is your financial situation?

  • Do you have at least 6 months worth of expenses saved in the bank?
  • Do you have low debt?
  • Is your partner or spouse willing to step in and support you while you are in the start-up phase of your new business?
  • Are you aware of all the costs involved in starting your new venture?
  • Are you up-to-date with your taxes?
  • Are you willing to scale back on expenses,including steps like moving to a lower-cost city or trading your Executron mansion for a smaller house?

While none of these conditions are mandatory prerequisites for going out on your own, they will certainly help you feel safer about cutting off your regular income stream.  If you are in a less-than-ideal financial situation, you may want to spend at least six months focusing on this area.

I also suggest talking with a trusted, objective financial adviser who can help you sort out different options, like whether to use savings or debt to finance start-up costs, what to do with your retirement  and health insurance plans and how present your financial situation in a way that will be attractive to lenders or investors.

4.  Is there any “there” there?

Obviously, a key part of your success as an entrepreneur depends on having a viable business idea. Have you done the following things?

  • Chosen a target market and specific niche?
  • Determined the major problems or concerns faced by people in this market and developed your product or service to address those needs?
  • Evaluated your competitors?
  • Shared your idea with a successful, more experienced entrepreneur?
  • Developed and deployed a prototype or sample of your offerings and gotten good response?
  • Had success in any other self-directed parts of your life like volunteer activities, fundraising drives or lemonade sales?

Of all these elements, I recommend testing your real product or service with real people to see if it works.  Make sure you are not betting your livelihood on an idea that has never made it out of your head.

5.  What other employment options do you have if your self-employed gig doesn’t work?

The reader quoted in the beginning of this post stated:

“I’m frozen by the great pair of “golden handcuffs” with the fear of never getting a good pair again.”

While I know that this can feel true, when you look at all of the ways that you can make a living, this is obviously not the only job opportunity on the planet.  And fearing not getting a good pair of handcuffs in the future makes me think of a correlated analogy:

“He may be a low-down, cheating husband, but he is MY low-down cheating husband.”

Ick.  Don’t live your life that way.  You are worth more than that.

Be creative in researching your options for generating income.  You may be surprised that instead of feeling trapped and limited, you have endless opportunities, including living the globe trotting lives of my virtual buddies Lea and Jonathan.

6.  How close are you to retirement?

For those that have worked for many years in one company, or who will receive significant, long-term  financial benefits by staying another two or three years in your day job, consider this:

  • Sometimes it is worth staying in your job now to have lots of freedom later.
  • You can make the most of these last years of employment by building out the infrastructure necessary for going out on your own.
  • Much depends on your loathing factor, described in point #1.  I knew a miserable, dedicated employee who put up with tyrannical, abusive bosses for most of his 30+ year career because he wanted to have security post-retirement.  In his last week as as employee, he was riding the subway into the city.  With no warning, he clutched his chest, slid down in his seat and exhaled his last breath on earth on the floor of a commuter train.

7.  How supportive is your partner/spouse?

If you are in a serious relationship, you know that career decisions are never only about you.  Your spouse will feel ramifications in every aspect of his or her life, including financial, emotional and work/life balance.  Although living a dream may seem like a good idea, you may find that as you change, your relationships change too. For tips on how to have the “I want to quit my job” conversation with your spouse, look here.

Even if you checked every single box on this list and find that you are mentally and physically able to quit your job, your business can still fail miserably.  I am sure I will hear (and hope I do) stories of wildly successful entrepreneurs who started their businesses without testing anything, in a financial cesspool and against the virulent protests of their spouse.

Your inspiration to quit may come from a much more improbable source, that lies somewhere between a small hunch and a profound spiritual revelation.  Many people who have made the leap say that they just “knew it was the right time.”

For my dear friend Steve Darden, the inspiration to quit came through his son Seth, who woke up from a nightmare one evening and called out for his Dad.  Steve was a hundred miles away, staying in another city so he could fulfill his dream of managing a large agency.  Haunted by the loss of his own father when he was just 3 months old, Steve realized that he was sacrificing his role as father for a job.  He quit, and never looked back.

For those who made the leap, please share how you did it.

36 Responses to “How do you know when is the right time to quit your day job?”

  1. […] Here’s a great article from Pamela Slim of Escape from Cubicle Nation on How to Know When to Quit Your Day Job. […]

  2. Ruben Gorneault says:

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  3. Stefany Bonini says:

    Hi Josh,Thanks for adding. Your site is added as well.

  4. Suzy says:

    I am one who has left jobs without any plan whatsoever. I agree with one of the comments above that there is never an absolute right time to do something. Every major decision involves risk and a leap of faith. Even with all your eggs lined up in the basket there will be some point where you just have to trust, take your step, and believe that the bridge will appear. I have found that every “leap of faith” I have taken in life has resulted in the greatest rewards.

  5. George says:

    You left out something important:

    8. Is your health and health history clean and impressive enough to convince an insurance underwriter that you’d be a high-performing asset in their portfolio of individual insurance policy investments?

    That is an unfortunate reality of “the best health care system in the world.” When you apply for individual coverage, you’re not applying for health coverage. Rather, you’re bidding to become part of an insurance company’s portfolio of high-performing, low-risk investments. Any blemish whatsoever that suggests you’ll be anything other than a dependable source of continually-increasing premium payments who will never generate expenses will mean either an unaffordable premium for a policy that excludes any condition you’ve ever had (or might get), or else the the inability to obtain individual coverage at any price.

    The “best health care system in the world” means that many people’s entrepreneurial dreams will remain forever unfulfilled because their only access to health care is through a cubicle. They may hate their jobs, but it’s the only way they can keep their bodies (if not their spirits) alive. Until there’s a fundamental change (which the entrenched interests will do anything to prevent), your advice will remain irrelevant for millions of people whose imperfect health is an indefinite sentence in cubicle prison.

  6. PT says:

    Reading this right before I go give my 2 week notice. Thanks.

  7. Mr. Chow says:

    Thanks for the advice. ‘Need it. Esp. with setting up a new blog to supplement my income.

  8. John says:

    I really look up to everyone who had the guts to quit his/her day job. It really is “golden handcuffs” and I hope I join the group soon (That said, yes i do have a plan and i’ve already started taking action on it but I have a feeling it will still take me a long time before i’m able to earn a living out of it but atleast I have a plan and I’m never giving up)

  9. This is such a great subject, and so helpful. I for one am blessed to have a job that I like very much. Problem is, because I work for a non-profit and my job depends on my organization receiving donations, my job security is never, well, …secure. So I’m trying to ignite an online business as a financial backdrop in case anything happens to my day job – and also to take me through to retirement (in maybe about 10 years). I just hope I have enough time to see it through to fruition.

  10. I’ve read all of the comments here and I feel a lot better about the move I’m about to make: leaving my cubicle behind and starting out on my own.
    I have my finances in order and am ready to start a new life.
    Some people are happy working in a corporate environment, but it was really getting me down.
    I already have a few clients for my web site design business. I’ve been doing it off and on for a few years while slaving away for someone else. Now I feel is the time for me to make the plunge. Thanks for the insight and the encouragement I’ve found on this thread!


  11. The Cubicle is 40 Years Old

    The cubicle, those little enclosures that people are assigned to when they work for other people’s companies, is coming up on its 4oth birthday soon. I was reading about knowing when to leave your day job over at Escape From

  12. Pamela Slim says:

    Thanks everyone for your truly exceptional comments! Sharing your own experience REALLY helps others who are contemplating the leap.


  13. Eliza Amos says:

    I covered this topic in my own blog this summer. I agree with the risk-takers: Just do it!

    “I’d say that I have undertaken the leap away from nine-to-five grind the way many people wind up having kids: You plan and plan, hoping for a time that’s right, but in the end you just do it. Because the time is always right.

    And though perhaps life gets messy for a while, and there are times (like now) when you don’t have two pennies to rub together, you know that there is no other life you’d rather be living.”

    (Escape Artist: The Creative Liberation of an Ordinary Wage Slave)

  14. sharon weber says:

    I just wrote a book called “1 Degree At A Time: A Survival Guide for the REAL YOU in the Corporate World.” I wrote it because I have found that we all start our jobs like the frog in a tepid pot of water, but 1 Degree At A Time we find ourselves conforming to a boiled version of ourselves. Going out on our own is one way to revive ourselves, but I found in my research 12 Practices of Thrivers, people who learn and grow in their jobs, make a good living, make “real-lationships” at work, and keep it all in perspective. For those who do not have an affinity for taking the plunge on their own business, you can take the plunge of rediscovering the excitement of your job.

  15. Kevin says:

    I think that this person may be more ready than ever to go out on their own. From the sounds of it they are very employable. My personal experience is when I was being offered the highest salary of my career with the greatest amount of flexibility it was the best time to say, “Thanks, but good bye.” I’m no millionaire (yet) but I’m a million times happier.

    And I’m very confident that if I had to go and get a job I could find one making pretty much the same amount as when i left.

    As “Rich Dad Poor Dad” says, freedom only comes when security is gone.

  16. About Quitting the Day Job

    Last week in Quit? Take No for an Answer? I questioned the common idea that entrepreneurship is about never quitting and never questionning. Or perhaps we could call that quoting others who did. Today I read a great follow-up to that idea, in which Pam…

  17. One of the most powerful and real fears most people have is not having health insurance. I would like to hear some stories from cubicle escapees out there on how they solved this serious, pressing issue. If it’s too long to post here, you can email me at mariosc (at) gmail (dot) com.

  18. Love this article…I was a corporate zombie for a while it was a very horrible feeling. Stressful to go out and start your own thing, but if you love it, your to-do list feels like a present list.

    Albert | UrbanMonk.Net
    Modern personal development, entwined with ancient spirituality.

  19. I worked on leaving well for a few years before I left. What has surprised me the most is no matter how much you plan (I am a planner by nature), your business and how you feel about it changes quite a bit – even in the first six months. Two things that can be very helpful are to figure out exactly where you will get revenue from (not just a general idea of where it will come from) and what is the least amount of money you can make for the longest period of time and still consider yourself successful. You will probably make more, but doing the calculation on what you must have can keep you focused on your progress and moving forward.

    Also, it helps to have a bias toward action before you leave and is very useful after you leave too. Working for myself, on what I want to work on and when I want to work has been the best career move yet.

    When you really can’t decide, it might be best to make the move to small business owner or solo entrepreneur when you can’t stand not to make the move any longer.

  20. Andy D says:

    This is a great post. I work at a day job that I truly loathe while I am building a very successful web traffic and SEO business. In addition to the concerns listed in the comments – I increasingly have trouble finding time to work on my fast growing business. I’m looking at supposed “part-time” options at my high tech handcuff employer – but am torn between how I am spending – and hating versus enjoying my time…

  21. Richard says:

    I am the originator of the email and I appreciate these responses. I’m currently in a good position to make the jump. Almost zero debt, 2+ years living expenses saved up, no kids and a wife that has a decent job and is moving up the ranks of her company. In addition to what is holding me back is that I had a bad string of work and business failures from 2000-2005. I broke even from the experience so I learned a lot. I know enough that I could loose my shirt and how difficult it is just to generate revenue, even harder to generate a profit. The past two years has been a nice change of pace. What makes it even more difficult is that I network with local entrepreneurs and they tell me (as they point to my wedding ring) I’ve got too much to loose by following my true passion to own my own business. I have multiple projects going on outside of work. With time, I’m confident that something will manifest itself into an opportunity. I must say thanks to Pam for putting so much effort into my email. I’m bookmarking this tread and will use it for inspiration.

    @eric – I envy you, I’ve wanted to ditch the cube for my own construction and handyman business for years.

  22. Eric Deeter says:

    I didn’t plan. I just jumped. I knew handyman and construction work well enough. But I didn’t know beans about running a business. Thank God my wife’s office job brought in enough for us to live on. By the time I’d learned to charge enough for my services she was ready to quit her office job and ended up joining me in business. It’s been 13 years and our business has morphed into providing high-end faux and specialty finishes. And now we’re looking to transition into other business opportunities as well. But I can’t see us ever going back to the “dark side”.

  23. Kelly says:

    I’m delighted to see Michael Katz’s comment above, because he was a major inspiration in me finally quitting, even though he has no clue who I am. He wrote an article, available on his website, about how he did it. One quote from his article kept repeating in my head while I was going through mental hyperventilations about quitting my job. “Leap, and the net will appear.” It doesn’t make ANY sense until you’ve obsessively prepared in every way you possibly could. Saving the 6 months of finances, researching the market, starting to build your network, planning until you just can’t think of a single thing that isn’t contained in an Excel spreadsheet somewhere. In the end, it all comes down to faith. Believing in the system. That if you market yourself & do the work, you’ll make it happen. And reading Michael Katz’s article on how he did it–and talking to a coach–and making a commitment to a group of people who knew me that I would quit by x date–and seeing that other people were out there and making it happen–made me think I had a shot. The worst mistake is to try to do it all on your own. You need support, and it’s not cheating if you have to promise someone else you’ll do it, just to make yourself do it. Whatever it takes. Just find people who take YOU seriously, people who will hold you accountable for leaving your job–not for staying the same. You have enough pressure to maintain status quo. You need to fight back by getting a different group of people in your corner. Plan plan plan plan plan, but then recognize that you’re never going to not feel the fear. Fear is not an indication or whether or not you should do something. It just means you’re about to do something worthwhile.

  24. Heather says:

    I just read this article and realized I did everything wrong, supposedly…I am single, low debt, not alot of savings, taxes are in order NOW…I was pushed out and have been on my own for six months, paying all my bills! I don’t think I would have done it at all if I wasn’t forced too…guess you can’t play it too safe…

    I agree Heather! Everyone is different. When I went out on my own, I was like you. I had no plan whatsoever – but it worked. It is a lot harder for someone that has a family and a big mortgage, especially if they are the only income earner. But obviously not everyone needs the amount of planning like I outlined. More power to you in 2008!


  25. Tim says:

    Hi all,

    All of these posts are excellent.

    As someone half way through “the leap”, I would say the strategy depends on what you want to do in your new / dream occupation. But in many cases it is possible to try out your new idea on an after-hours or freelance basis while you’re still working.

    This will help to answer some of the questions on Pam’s excellent list, e.g. “is there any demand for this product or service?” and “how will I deal with sales / marketing / accounting aspects of the business?”

    Importantly, you will get a feel for what it’s really like, which might help you decide whether it’s really for you. Michael’s post is spot on in this regard – you may never quite feel comfortable. But this isn;t necessarily a bad sign.

    Best of all, you may well find that if you’re on a winner, your business idea will grow to the point where you need to leave your “day job”.

    As much as possible, keep your full-time employment and part-time / freelance work separate. Dedicate time at your employer’s work place to working for them, and don’t try to mix the two.

    And don’t try to work for your employer’s clients on the sly – you’ll be in a world of trouble of you do. As Y0mbo pointed out, you can track your old clients down later, after the leap is complete!

    Instead, as Liz pointed out, networks are key to branching out on your own. Your network will always be a work in progress – and for me, creating and sustaining business friendships is a pleasure in itself – but if you’re authentic about creating relationships and don’t simply run around touting for work, you’ll find that you eventually reach a “tipping point” where a certain proportion of the work just starts coming to you through word of mouth, recomendations and referrals.

    Finally, for your own sanity, give it time and give yourself time. It may not start cranking at full speed in the first 12 months – it might take a bit longer, but if it’s meant to be it will happen.

    In the meantime, look after yourself and balance your combined work load with sleep, family time and recreation. Linda’s thoughts here are right on target as well.

    All the best,

  26. Three things to remember about going into your own business:
    1) Nothing is “forever” – you can ALWAYS go back to the corporate (dark) side if you choose – my career has gone back and forth between freelancing for 4-6 years and then going to the corporate side, and back
    2) The number one thing to research completely, particularly if you are 35 and older, is health care coverage. Being independent but without decent coverage will really spoil the party
    3) Tied to health – be careful not to overdo it if your business requires a lot of computer work. It will catch up with you later, no matter how bullet-proof you feel in your 20s or 30s. Pacing is key – the old saying that it’s a marathon, not a spring, holds true when it comes to your health.

  27. Michael Katz says:

    I made the leap in 2000. Looking back, I think a key realization is that you may never be quite comfortable. All the planning and thinking and putting money in the bank may never be enough to put you completely at ease. At some point you just have to jump.

    Had I known that then, I would have made the move sooner, becuase it would have gotten me off the hook on waiting until I *knew* it was the right time. In the end, and maybe even against your better judgement, you just have to go for it.

  28. Lea says:

    Hey Pam – virtual buddy!

    Thanks for the link and a very thought-provoking post. We’re 3 days away from leaving our Caribbean paradise to go back to the UK for a week before heading to Dubai…all change in the life of a LIP!

    Jonathan and I had very different experiences for our cubicle escapes….mine was prompted by a very personal crisis (my Mum dying) which brought about a whole “purpose of life” phase for me that prompted the jump from the rat race.

    Jonathan’s on the other hand was very different – he was made redundant (laid off). So one was choice, the other not.

    What’s happened in both cases for us is that the world had thrown all sorts of opportunities our way as it always does when you make a move…any move.

    I think our experiences of doing it both ways have shown that there’s never going to be a perfect time to leave…you just have to work with what you’ve got.

    That said, you can certainly make the transition smoother by following your advice above.

    Hope all the munchkins are well!!

    Take care, Lea

  29. Liz Greer says:

    I would add one more question to your excellent list: have you done everything that you can to build your network?

    Assuming that you’re planning to go out on your own but stay in the same industry, you’ll need a strong network to support your next business venture. You can build your contact base before you quit your day job by engaging in public speaking opportunities; attending and networking at key tradeshows; developing closer relationships with industry influencers; beefing up your LinkedIn profile, and so on.

    You can do these things while maintaining your integrity and your loyalty to your existing employer.

  30. A always a great and thorough post Pam! As for me .. I am 3 months to today out of the cube. That being said I did spend several years building my skills and starting to build the base for my business. This “building” phase involved extensive work with several coaches on both a personal and business level.

    I was wresting with the decision for a long while. My scale of dread ranged from around a 5-10 depending on the team I was on at the time. Although I must admit that on the 10 scale moments I would’ve been incapable of going out on my own because I was too emotionally nuts. So I learned what I needed to learn in those situations and got the scale to a 5-7 where I could think clearly but still knew I needed to leave.

    That being said… as I was still scheming and working out the details of when, money, etc. the company I worked for made the decision for me. Reorganization musical chairs & I was left without a chair. But the timing and whole situation I believe was a blessing.

    As for the whole successful building a business to not only replace but exceed previous income… I am in the process of making that happen, at least that is the plan. Having thoughtfully handled finances prior to the departure date, though is what makes it possible for me to be doing what I’m doing and still pay the fixed bills with ease.

  31. y0mbo says:

    I struggled as a software consultant when I saw things my manager did that were not in the best interest of our clients. At my wife’s encouragement, I quit my job in August 2006 and opened my own independent practice. I’ve been busy with work ever since, even having old clients track me down (I gave some space as a courtesy to not contact my previous employer’s clients) with work.

    Now we’ve moved cities (for my wife’s work), and the transition has been seamless. I’m free to handle transition issues as well as be home when our boys finish with school for the day.

    Going independent in the same market I already knew made the transition much easier. Now I just need to build a new client base in our new city.

  32. I can really identify with your reader’s scenario. I have a great job that I enjoy with pay and benefits that are far ahead of the standard in my field. Unfortunately, it just isn’t enough.

    What I’m beginning to realize is that there is NEVER a good time to leave a job, just as there is NEVER a good time to get married or have a child. For me, the key is to get all of my finances lined up and do some small tests of my business concepts – then just going for it!

  33. I think also it’s easier than you think to renegotiate your day job, particularly if you practice GTD or are relatively efficient.

  34. Harrison says:

    Thanks for the tips. I 100% agree that we must clear with our financial situation and also commitment before making any decisions.

  35. Fred says:

    I have been struggling with this question for some time. I have been in a job (VP of Technology at a startup – but still a cubicle dweller) that was very good in the beginning almost 9 years ago, but has gone steadily downhill for me. I have been locked in, however, by all of the same things others mention:
    – what if I fail?
    – the money here is good, and hard to walk away from, even if being here stresses me out to the point of illness
    – stock options, hard to walk away from the “what if”.
    – health care: i am diabetic, and the thought of no drug plan is scary.

    Fortunately, my company resolved the question for me – I was laid off following the company being acquired 🙂

    Stay tuned for what happens next, I guess.

  36. I am of the disposition that people should just do it and take the risk. There will be other jobs but there will never be another life. Why look back and have regrets, why run the risk of fulfilling your potentially. Naturally you have to plan and have a contingency fund. But sooner or later you just have to risk it and have confidence in yourself to succeed.

    The whole idea of “formulas” which tell you when to quit is trying to make the decision rational. Setting up a business is rarely a rational decision. Give into your instincts, quit and set up a biz!