In most cases, you should not quit your job before your LLC makes money-unless you have substantial savings, low personal expenses, and a well-prepared business plan.
Launching your own LLC and becoming your own boss is exciting, but doing it too early can create unnecessary stress and financial risk. While some entrepreneurs thrive under pressure, most benefit from a transitional period where they build the business while still employed. Before you hand in your resignation, there are key financial and strategic factors to consider.
Contents
1. Why Most Experts Say: Don’t Quit Too Soon
Unless you already have significant startup capital or passive income, quitting your job before your business earns revenue is risky. Here’s why:
- Income disappears immediately – but your expenses don’t.
- Your runway shortens – without money coming in, your savings won’t last long.
- Stress increases – financial pressure can cloud judgment and lead to poor decisions.
Building your business while employed-even if it’s only part time-can provide the cushion you need to test, iterate, and grow more safely.
2. When It Might Make Sense to Quit Anyway
In certain cases, leaving your job before your LLC makes money can be a strategic move. For example:
- You have at least 6 to 12 months of personal savings set aside
- Your cost of living is low and manageable without income
- You’re launching a business that requires full-time effort from day one (like opening a brick-and-mortar location)
- You’ve secured outside funding (loans, investment, or grants)
- You’re mentally prepared to go without income for a while
If you fall into one or more of these categories, quitting may be reasonable-but only with a clear plan and emergency backup options.
3. Consider a Part-Time or Phased Transition
You don’t have to choose between all-in or all-out. Many entrepreneurs build their LLC during nights and weekends, then reduce to part-time or freelance work as the business grows.
Benefits of a phased transition include:
- Maintaining steady income while building your business
- Testing your business model before committing full time
- Creating a more gradual shift with less pressure
This approach gives you time to learn the ropes, avoid burnout, and make adjustments as needed-without risking your financial well-being.
4. Have a Financial Plan Before You Quit
If you’re seriously considering leaving your job before your LLC makes money, you must have a detailed plan that includes:
- How long your savings will last
- Projected monthly expenses (both personal and business)
- Startup and operating costs
- Estimated time to first revenue or break-even point
- Emergency options if the business takes longer than expected to grow
A written budget helps you anticipate challenges and decide whether you’re truly ready to take the leap.
5. Know the Hidden Costs of Self-Employment
When you leave a job, you don’t just lose your salary-you lose benefits and financial stability. Before quitting, plan for:
- Health insurance premiums (ACA plans or private insurance)
- Retirement savings (open a Solo 401(k) or SEP IRA)
- Self-employment tax (15.3% on net income)
- Business software, equipment, licenses, and other operational expenses
These additional costs are easy to overlook but will affect how far your savings will go.
6. Be Realistic About Time and Motivation
Some aspiring entrepreneurs believe quitting their job will automatically make them more productive-but without a clear schedule, routine, or income target, it can backfire. Ask yourself:
- Will I stay focused without structure?
- Am I self-motivated and disciplined?
- What will I do if things don’t go as planned?
Running your own business requires resilience. The early days can feel slow, and without external accountability, it’s easy to stall.
In most situations, the best move is to keep your job while your LLC begins generating income. Quitting too early can create financial strain and delay your success. But if you have strong savings, low expenses, and a well-thought-out strategy, you may be ready to make the leap. Just make sure your decision is guided by numbers and preparation-not just frustration or excitement. Entrepreneurship rewards bold action-but only when it’s backed by a solid plan.
