4 things to do with your money before quitting your job to start a business, according to a financial planner

You should assess your current finances, figure out how much start-up cash you’ll need, and have an exit plan before starting a business.

To explore entrepreneurship, you’ll need plenty of cash on hand. Photo: Tadamasa Taniguchi/Getty Images

By Eric Roberge

Interested in starting your own business? You’re not alone. Applications for business formations have exploded since the fall of 2020, according to Census Bureau data.

I’m certainly biased toward entrepreneurship. It’s the path I chose for myself and found far greater success with than I believe I could have achieved in a more traditional employee role.

But that doesn’t mean starting a business is for everyone, or that if you choose to make the leap, you can skip over the planning phase. If you want to launch your own venture, financially preparing yourself will go a long way toward allowing you to stick around long enough to find your own success.

Here are some points you’ll want to consider.

1. Know where you stand today

Doing a bit of an audit of your finances can help you better understand what leverage you have, where your weak spots might be, and what actions you can take now to strengthen your position before you take the risk of…