But even if you are 100% sure you have a “can’t fail” idea for a business, actually carrying the whole thing out is scary.  As any retiree will tell you, saying goodbye to the vaunted “steady paycheck” is a big step, and probably especially so in this still uncertain economy. 

Does that mean you shouldn’t do it?  Heck, no.  As the events of the past decade have played out, “employment stability” appears to have evolved into a rather quaint notion, evoking feelings of nostalgia even for many with so-called full-time permanent jobs.  So it could well be that the bigger risk lurks in staying at your current job. 

Risks, risks everywhere.  So what do you do?  Start by reading this:

In the article A top 10 list for all the risk-takers among us, Boston.com’s Scott Kirsner offers up some excellent ideas for mitigating the risks of taking the leap from employed to self-employed.  Check it out before you stop by your boss’ office to say “buh-bye”…

“The goal of this one-day retreat/workshop is to help you gain clarity on the career parameters you should consider to make better career choices for the future.

During the retreat, you will work on self-reflection exercises, alone and in teams, to help you better understand your lifelong career interests, your motivated skills, your behavioral style, and the rewards you want to achieve from your work. At the end of the retreat, we will brainstorm as a group to discover career options that will fit your unique needs.” – Randi Bussin

Click here for more information and to register for an upcoming session!

In this case, the couple wanted to start a family but felt they had to pay down their debt before they changed gears.  Smart!

Photo by Sharon Harvell

Could it be that the long-awaited bluer skies are finally returning?  The stock market, holiday spending, and other economic indicators are up. Most welcome of all perhaps, according to the latest report, unemployment is down. 

If you are one of the lucky beneficiaries of this nascent uptick in hiring, congratulations!  Before you get too caught up in the day-to-day demands of full-time employment, check out my thoughts and others’ on how to make the most of your new job – financially speaking — in this article Newly Re-Employed Need To Revisit Financial Goals by CNBC’s Shelly Schwartz. 

Founder of Aspire!, Randi Bussin

Randi has changed careers twice, working in high tech, higher education, and is a serial entrepreneur.  She has an MBA from INSEAD and an MA from Tufts University.

She was recently voted one of 100 Personal Branding Experts to Follow on Twitter in 2010.

Those from the world of software development know that Beta test is the last phase before a product is officially released, and its purpose is to test drive the product under conditions that mimic as much as possible the way it will be used in real life by real customers.  The kinds of testing that come prior to Beta — unit test, Alpha test, etc. — are typically done internally by the company, and they are critical to getting the software to the point where it is even usable by real customers.

BUT it turns out that, no matter how bulletproof the software development team thinks they’ve made the product, there are always important issues uncovered once a Beta version of it gets into customer hands.  When these problems are found in Beta testing, they can be fixed BEFORE the official release when expectations and stakes are not as high as they would be in production use.  Yes, as all software users know, pretty much every piece of software gets out the door with at least some minor bugs remaining, but those that are thoroughly Beta tested are less likely to result in wildly customer-unfriendly behavior such as data loss, repeated crashing, and blue screens of death.

And this is an important lesson for career changers, retirees, and others whose plans include a change in employment compensation: try before you buy.  Or to put it another way, Beta test your post-transition financial plan as much as possible BEFORE you say goodbye to your regular paycheck.  For career changers and software development teams alike, it is easy to get caught up in the excitement of the new, the feeling of having already done so much and come so far, and the desire to just “get’er done”.

When it comes to career change, including retirement, this often shows up as an overly optimistic view of how much it is possible to reduce living expenses, in order to pull off the desired change.   I read a study a while back that suggested most of us can reduce expenses by 10% without a significant hit to lifestyle, but it’s a really good idea to verify that’s true, not to mention sufficient, for you while you still have all your options open.  Here’s how:

1. Download my free Cash Flow Worksheet with before, during, and after columns, as well as hints on categories where career changers are likely to see fluctuations.  First, determine your current income and expenses, which will help you with the next step: making estimates for the “during” and “after” columns.
2. If your post-transition budget doesn’t balance (i.e. more cash flows out than in, and the assets intended to fund this change can’t make up the difference), dig into more detail and identify additional areas where you think you can reduce spending, being as realistic as possible.
3. Now Beta test your plan.  In other words, try now, while you’re still gainfully employed, to spend at the post-transition level to see what “bugs” might be lurking.   While you won’t be able to test every change, e.g. lower commuting costs, you should be able to learn a lot just tracking the categories you can simulate, e.g. spend less eating out.
4. Fix bugs, and retest until the plan is ready for “production use”.

Even if the 1.0 version of your spending plan is perfectly achievable, it sometimes takes a while to make a downward shift in spending.  This Beta test strategy not only gives you that time, it has the added bonus of further padding your nest egg, er, goat pen, should a little extra cash come in handy.  And doesn’t it always??

Randi has changed careers twice, working in high tech, higher education, and is a serial entrepreneur.  She has an MBA from INSEAD and an MA from Tufts University.

She was recently voted one of 100 Personal Branding Experts to Follow on Twitter in 2010.

But a prospective self-employed – especially one whose financial situation has been made more precarious by a layoff — is wise to test the waters first.  Why?  As Small Business Administration (SBA) legend has it, only about half of new businesses survive past year 4.  This SBA article lists the reasons, but they pretty much add up to one thing: cash flow, cash flow, cash flow.

So how to make sure cash from your new business flows in the right direction?  In the Wall Street Journal article Becoming the Boss Can Cost Plenty, a few who’ve recently found themselves in over their heads share what they’ve learned about launching a start-up and how they would do things differently if they had it to do over again.