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Study: It's Better to Start a Business While You're Still Employed Elsewhere

Study: It's Better to Start a Business While You're Still Employed Elsewhere
Entrepreneur.com
By Nina Zipkin
Published: September 23, 2014
>> Study: It's Better to Start a Business While You're Still Employed Elsewhere

When do I quit my day job to start running my company full time?

It's one of the biggest questions any new business owner faces, and the answer is different for everyone. But according to a new study published in The Academy of Management Journal, if you jump ship too early, you could be setting yourself up for failure.

Professors Joseph Raffiee and Jie Feng at the University of Wisconsin-Madison found that "hybrid" entrepreneurs -- people who maintain their regular gig and while launching their new ventures in stages -- are a third less likely to fail than those who jump in sans safety net.

Additionally, they maintain that hybrid business owners who transition to full-time self-employment "have much higher rates of survival relative" to those who quit their job and then directly start a new company. There is always a factor of risk when launching a new venture, but the study purports that you don't need to thrive on risk in order to be effective.

Indeed, Raffiee and Feng write, "our findings suggest that risk aversion influences the process of how  an individual decides to start a business (i.e., full-time versus hybrid), not necessarily whether  the individual decides to start a business or not."

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