When I quit my job last year, I had no savings which would last me until I had another job. The experts recommend that one save six months’ worth of salary before quitting a job. The importance of not having debt, or at least eliminating debt as much as you possibly can is crucial because life is unpredictable. In my case, I had to leave my job without a savings plan because my health was at stake. Not having debt became a huge blessing. This meant that I could save up or invest my pension payout. I took a portion and put it into a pension fund and I invested the rest in starting my laundry business. Quitting a job, which means loss of income, is extremely difficult, especially if you are the main breadwinner in your family.
There are few factors that helped me survive the dry season as the business was still picking up, rather, as it had its first slump after a few months of enjoying great revenue. The first factor is that I do not have children, so I do not have to worry about school fees, uniform, medical aid costs or any other costs associated with having children. The second point is that I live at home and that means I do not have to worry about rent. I made this decision while I was still employed and at the time, I wasn’t even thinking about quitting my job or starting a business. The only thing I need to worry about is making sure I have electricity. Initially, I managed this fine, but when I ran out of the little money I had from my salary payout, the business helped me because it consumes electricity and I’m running the business from home.
The third factor is not having serious debt, like paying off a house or a car, except for a few policies and investments. When the money finally ran out, these either lapsed or were put on hold, to be resumed when I have a regular income again.
The fourth factor is that I opened an investment account with Momentum when I was still employed and I authorised them to debit R5 00 from the account every month. I initially took this investment account to save for my holidays. When I stopped working and could no longer continue with my contribution, I left the money in the account, saving it for a rainy day. I only took a large portion to invest in the business and left the rest there. It doesn’t matter how desperate my situation becomes, I never touch that money, and it’s for the worst of rainy days. I’ve been tempted numerous times to withdraw it, but I haven’t. It gives me peace of mind to know that some money, however small it may be, is locked up somewhere.
The last factor is leveraging my skills. I’m a writer and I had a great career in writing before I started my business. When the business was not doing well and I had zero customers, my writing fed me. It still does as my business, after one year, is still not in a position to pay me a salary. I think the advantage of becoming an entrepreneur, after building a solid career, is that you have something to fall back on financially. This is important. I know that if this entrepreneurship thing fails and I discover that it’s not for me, I can always go back to writing full time. It’s important to discover one’s passions and skills even when one identifies a lucrative business opportunity.