What Happens When You Leave Your Job or Business Abruptly

I started working in my early teens. I didn’t make any significant money for doing so but it’s been a while. I received my first pay-check in 2004. I am 30 years old now and I can say I’ve worked for more years than I have not.

Despite being in a career for this long, I have never had a day job. Not even for 1 day. So I don’t know how that works. To top this off, my own company is also a distributed one with a headcount of less than 5 and a couple of freelancers. So I’ve never seen the other side of the picture clearly. May be there’s something I’m missing out in a day job, I absolutely don’t know about that.

However, thinking on those lines something popped up in my head and I thought to lay it out here.

When you leave your job abruptly, what happens? If after 7 years of working, you have decided to leave your job today, you may be given some bonuses I suppose for staying around long enough. I don’t know what that number would be but I suppose it won’t be a lot or that it would depend a lot on case to case basis.

When you’re asked to leave your job unwillingly, severance may be offered? How much does that sum into? Internet suggests 2-4 weeks per year that you’ve worked. Let’s average that out to 3 weeks. Since you’ve worked for 7 years, this could be mean you’re getting 5 months of salary without working. That’s not too bad.

What happens though when you leave your business abruptly? If it’s a very very small internet business doing anything between $10K-$100K per year. You will easily flip it for 30x monthly multiple. If it’s slightly bigger than that, but still a small business doing $100k-$1MM per year, I suppose you’ll get over 40X monthly multiple. If your business is larger, solid, more consistent and has been around for 7 years, you can hope to get paid even more than that. If it’s an offline business, I suppose you will get paid a lot more than what you get paid for internet businesses today.

Assuming you have a steady job giving you 6 figures per year i-e $100,000 USD, for having a business of the same size you’re looking at an extra $300,000+ for abruptly leaving it. I don’t think any bonus or severance pays that much. Educate me if my understanding is incorrect.

As humans, we’re so focused on the short term, living in today and thinking everything in the terms of daily and monthly gains, that we forget about the value that is created outside of today. The value that is created outside of today can often be much larger than today. A reminder of that is necessary and I make every effort to constantly remind myself.

Thanks for reading.

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