Giving up your work to launch a business can be very risky and very tempting. Before stepping out, make sure you have a safety net in place, advises billionaire investor and entrepreneur Mark Cuban.

“First, save your money. “Make sure you know what you’re doing before quitting your job,” Cuban advised Wired in a video Q&A last month. His reasoning was that although there are many motivational success stories, most people who quit corporate America to follow their own ideas end up failing miserably or not at all.

“We keep hearing these tales about people quitting their jobs, founding businesses, and becoming extremely wealthy,” Cuban remarked. “You don’t hear the stories of people who quit their jobs, founded a business, and then failed miserably, leaving them stuck in a job they detest.”
Approximately 50% of Gen Z employees want to launch their own companies, per a recent Morning Consult and Samsung survey. Not all of them will be successful; according to data from the U.S. Bureau of Labor Statistics, 20% of new businesses fail within their first year, and over half fail within five years.

Experts advise conducting extensive research before quitting your job.

A few financial advisors advise setting aside enough cash for both living and business costs for a full year. You should have enough money to cover “at least six months” of living expenses, according to Cuban.
Why it’s so crucial to plan ahead, especially financially
Cuban is among the prosperous individuals: He founded the software company MicroSolutions in his 20s after losing his sales position, which he later sold for $6 million in 1990. Five years later, he became a co-founder of the business that would become Broadcast.com; in 1999, he sold it to Yahoo for a whopping $5.7 billion.

Even so, Cuban’s career was not without setbacks. For example, he almost lost everything when his former secretary pilfered $82,000 from MicroSolutions, nearly wiping out the company’s account balance. Every new company has obstacles to overcome, and having those savings will help you get through those unavoidable hard times.

You’re still not guaranteed to succeed even then, according to Cuban. He frequently counsels would-be business owners to launch a venture only if “your heart is in it” and if they “know your s— better than anyone else in the room.”

Wired was told by Cuban, “Before you quit, be prepared, know what’re doing, save your money, have at least six months to live off, if you can.” “After that, perhaps you’re prepared to launch your company.”