In the article, “How Not to Go Broke When Starting Your Own Business,” featured on Money’s website, www.time.com/money/, Elaine Pofeldt writes about the importance of planning when making the switch from employee to employer.

Pofeldt shares in the article the success of Stefanie Smith, who left her career at Grant Thornton to start her own boutique firm with a goal to provide more flexible and customized services to her clients than she could in a staff position.

“That was in 1996. Today, she has no regrets that she has poured her energies into her business, Stratex Consulting [and Coaching],” says Pofeldt in the article, adding an important message from Smith, “You have to have the courage to invest in yourself.”

In the article, Pofeldt offers four tips “for getting your ducks in a row” as you take a step toward becoming an entrepreneur:

  • Don’t quit tomorrow. Though it may be tempting to quit right away, don’t. It might take several months, and maybe even years, before a startup can start to pay your bills. According to Gallup research, only 38 percent of entrepreneurs with a one-year-old (or less) business depend on this startup as their main source of income. This percentage increases to 51 percent for owners with businesses that are only two to five years old.
  • Test the waters. While you are still working begin searching for your first customer — as long as you haven’t signed any agreements with your current employer. This is a good way to see if your business idea has what it takes to develop a strong customer base before you even start your venture.
  • Save money. Start saving money now. This can help to shorten the time it may take to quit your current job. If you don’t have another supplemental income to rely on while you launch your business, make sure you have a year’s salary saved up to help cushion the transition.
  • Have a support team. “You want smart, honest people around you who really understand what you bring to the table and what makes you special,” states Smith in the article. Building a “dream team” can help solidify your startup. They can offer constructive input on your business ideas to help you more clearly see what will work and what won’t. If you have a significant other, he/she should also be included in your support team, as well as any immediate family. Remember, taking this step to becoming an entrepreneur impacts them, too.

Read the entire Money feature here.