employee to entrepreneur

Four Ways to Transition from Employee to Entrepreneur

Are you ready to make the leap from an employee to entrepreneur? Maybe you have a great business idea, you hate the rat race of the corporate world, or you just want more professional freedom. Whatever the reason, you may be wondering how you can make the transition a little bit smoother.

No matter how you decide to take the leap, there are going to be some hurdles to maneuver. As someone who recently left her six-figure salary to start an online business, I can promise that no amount of planning can guarantee you a smooth transition. But, hopefully the preparation will make the new endeavor more navigable.

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How to transition from employee to entrepreneur

Here I am going to discuss creative ways to make the switch. Each has their advantages and disadvantages and it’s important to choose which is the best fit for you.

Option #1: Quit your job and start your business

This may seem like the most obvious option, but it’s also the riskiest. If you have a family to support or other financial obligations, quitting your job without another source of income can put a lot of strain on your personal life. Not to mention, starting a business is no small feat. It takes a lot of hard work, dedication and money.

But, there are definitely some perks to this method. First, it gives you the capability to put your entire attention to your business. Not to mention, there’s no better motivation when your entire livelihood and reputation are at stake: You simply cannot afford to fail.

If your personality is more of the all-or-nothing kind, here are some tips to help you succeed:

  • Beef up your savings account. Before you quit your job, make sure you have at least six months of living expenses saved. This will give you a cushion in case the business doesn’t take off as quickly as you’d hoped.
  • Create a detailed business plan. This will be your road map for success and will help you track your progress along the way.
  • Implement a business budget. It’s important that you know where your money is being allocated and if you’re meeting financial goals. If you need startup funds, secure those before you quit your job.
  • Know when to pivot. I’ve seen firsthand many people refusing to accept failure. While this is a remarkable quality, you need to take a step back to maintain objectiveness. If your business isn’t taking off the way you envisioned it, make sure you are prepared to pivot the business direction to give it the best chance to succeed.

There’s no better motivation when your entire livelihood and reputation are at stake: You simply cannot afford to fail.

Option #2: Continue working and start a side hustle

Many people cannot afford to lose their steady income whether that’s due to financial or family obligations. So the natural path is to start your business on the side and grow it over time. The key to this option is lots of patience, as there are only so many hours in a week and your job takes up 40 of them. But this transition strategy minimizes your personal risk and allows you to test the waters to ensure your business idea is viable before making any big investments.

Contrary to what many people think, businesses don’t always start off with a grand plan. Often, they just evolve into something their owners never would have imagined at the beginning. Many people have monetized their hobbies into a booming business. Working parents have found a way to launch a side hustle that gives them more time with their families. Even seasoned employees with established careers are discovering the earning potential of their side business.

Here are some tips if you plan to grow a business on the side:

  • Work smarter not harder. You can’t afford to waste time on trivial parts of the business. If you’re earning a little bit of money, reinvest in the business and outsource easy tasks. This allows you to spend the time you have toward growing the business.
  • Choose the right side hustle. If you want to work and expand your business at the same time, then you will need a side hustle that can be flexible around your working schedule. For example, a passive online or an Etsy business can typically be done at any time of the day.
  • Get your qualifications ahead of time. If there’s any business that requires qualifications, choose one where you can learn around your work schedule. For example, you can take a notary signing agent course and get those certifications ahead of time and then work on the weekends. If you’re going into real estate, there are many online schools where you can get licensed on your own time.

Option #3: Leverage yourself into an entrepreneurial opportunity

Do you love your company, your job, but want to be the one steering the ship? Then finding partnership opportunities might be a better fit for you. If you’re working for a startup company, you may be able to use your unique skill set to your advantage by leveraging it to become a partner.

Even as I’m writing this, I always think “making partner” only applies to lawyers. But that’s not the case. Partnerships come in all types of industries and all types of company sizes. It really can give you the best of both worlds: a steady income career but the potential to be an entrepreneur. The investments you make now will carry forward with you.

Here are some considerations if this is an option for you:

  • Make sure you want to have a partner. Not all partnerships have good endings. Make sure you see yourself being able to split decisions with somebody else.
  • Make sure you like who you work with. If you do want a partnership, make sure you like who you would be working with. Think about what disagreements would look like and how they would be handled to see if it’s a good fit.

Option #4: Brand yourself, then branch off

Out of all the options, this one may be the best. If you’re in a career, set out to make a name for yourself. This could be in any field from digital marketing to being a hair stylist. People always know and recognize great talent. That way, when you’re ready to branch off on your own, you already have a clientele waiting for you. I know this may sound Miranda Priestly-ish by “stealing clients,” but hopefully you can do so without burning any bridges.

Shift from an employee to an entrepreneur mindset

Once you’ve chosen your exit strategy, it’s time to make sure you’re ready to “change hats” so to speak. It takes some time getting used to working for yourself and not having someone else hold you accountable. Here are some tips to transition to an entrepreneur mindset:


There’s no more rush to clock in anymore, but you need to act like there still is. Create a timeline and deadlines for yourself. Set up a daily routine that mentally sets you up to conquer the day. Whatever it takes, find a way to get yourself going because you’re the only one who can.

Work smarter

One of my favorite words is leverage, because all successful entrepreneurs need to know how to use it to their advantage. You can’t do everything yourself and you don’t have to. Delegate, outsource and automate when possible so you’re working on your business and not in it. Productivity and efficiency are what move the lever.

Communication and networking skills

This is key. In order to promote and market your business, gain clients or business partnerships, having persuasive communication skills can be a turning point for your business.

Networking will also help keep a positive outlook. Starting out on your own can be really lonely, so it’s important to have people you can lean on when things get tough. Join social media groups to learn from like-minded individuals. If you can find a mentor, this is a great way to get some feedback or ask questions over a coffee break.

Be prepared for failure

Starting your own business is not for the faint of heart. There will be failures and setbacks. Be prepared to look at your own business from an outside perspective and adapt to change as necessary.

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