When is the right time to start your own business and leave corporate life?

Tim Fitch, Invennt

When I resigned from Vinci to team up with Brendan Morahan in June 2011 lots of people said to me: “I wouldn’t want to start a business now, not in the middle of a recession” or the more positive and supportive would comment: “you are brave”.

I had been in corporate life for 24 years when I made that decision so maybe I had been suppressing my entrepreneurial instincts but I did not agree with the reasoning of the first group of comments and neither did I agree at the time with the sentiment of the second.

Let me explain why.

It was not a snap decision, although I am by nature spontaneous, in this instance a great deal of thought had gone into the reasoning before making the judgement to start my own thing.  This was absolutely not an impulsive move by someone in a mid-life crisis.

For me it was a highly rational decision arrived at over 13 months of enquiry, discussion and analysis. I focused on the downside (very unlike me). What was the worst thing that could happen if I resigned and left my relatively safe corporate position and the new business failed?

1.     I budgeted that I could survive nine months with zero income (living costs plus business expenses as out goings) so after six months of failure I would need to search for a new job. So I would lose a serious five figure sum.

2.     I would have demonstrated to myself and the world that I was not a successful entrepreneur (at least not first time around). This would seriously damage my ego, but at least I would know! 

3.     I would have put my family through a stressful and uncertain period (my daughter was five months old when I took the plunge) for no benefit.

Reflecting now, three years later, it is interesting to reconsider how these three key risks turned out. 

The business was launched in September 2011. First orders came in October, continuous growth came after five months and we have achieved year on year progress ever since.  So the hard cash flow risk never crystallised. However managing this risk was a very important dimension in the early success of the business.

The second and third risks were all about feelings rather than hard numbers.  What I have learned about the second risk is that you have to learn to manage your emotions. For me every marginally positive email or phone call would create a massive rush of euphoria. The opposite was also true however; every knock back however minor would trigger negative thoughts and emotions.

We all have these sorts of emotional swings but I found that at the start of the business where business development activity is at its most intense (and I was really focused on risk one) these shifts in mood were happening most days.

I found the only way to deal with this was to temper my emotional reaction at the point of receiving the information whether good or bad. Good news would be celebrated but only if it was really significant. Bad news was dealt with rationally and in discussion with my business partner Brendan Morahan. We now use negative news as a chance to reflect and improve our service or offering. In this way emotion is not removed but the intense highs and lows have been tempered.   

Anyone with a family to support will understand what risk three would feel like (my wife is a full time Mum to my son and daughter). For me having the support of Alison was essential. I needed her support and understanding to help manage risk one and help me cope with the ups and downs I experienced in risk two. Together we needed to keep the family happy and secure.

So what do I conclude is the right time to start a business? I believe it is a combination of two things;

1. When all the analysis suggest that you have a good chance of success and if not you understand when to start implementing plan B.

2. When it feels right. Your family has to back your decision. You need the right business partner (partnerships are much less lonely) or a business mentor to give you support.

Looking back to the comments I received from friends and colleagues, there were times when I wondered, particularly in the early days, whether the business would work out and yes, I did think have I got the timing right? So maybe now I will admit perhaps I was a little brave.

I would like to sincerely thank all our customers for the support they have given us since 2011 and we can all look forward to a prosperous future now that the economy is safely out of recession.

Tim Fitch is director of Invennt, a management consultancy specialising in construction.