STRADDLING BOTH WORLDS.

JOSEPHINE THOMAS QUIT A $30,000 A YEAR JOB AT MOUNTAIN BELL IN DENVER AND STARTED her own business the minute she got her real estate license in 1985. She was 31, the divorced parent of two boys, David, 12, and Brian, 8, and felt she possessed the right skills and knowledge to be successful in Denver's bustling real estate market.

"The first years were great," says Thomas, now a manager with Lucent Technologies in Basking Ridge, New Jersey. Then the bottom fell out of the real estate market in 1987 and her business collapsed right along with it.

Today, Thomas says she has learned the hard way that you don't quit a job and jump into business without adequate finances and a strong support system in case the going gets tough. But it takes more than that to keep from winding up like the 83,384 failed businesses that Dun & Bradstreet tracked in 1997.

To make a successful transition from full-time employee to full-time entrepreneur, you also need experience in the field, a good business plan and a job that lets you start up part-time.

YOU'VE GOT TO HAVE A PLAN

Don't even think of giving up your livelihood to become an entrepreneur without a business plan, says Emily Miklis, chair of the Cleveland Service Corps of Retired Executives (SCORE), Chapter 30. A business plan helps you determine if there's a need for your product or service; your consumer base; pricing; your competitors; growth potential; and if you nave adequate financial resources to get started and expand. (See "Small Business Checklist" at www.blackenterprise.com.)

Cheryl Prince, the owner of Ethnic By Design, a $50,000-plus mail order and e-commerce ethnic gift and collectible company in Atlanta (www.ebydesign.com), developed a solid business plan, says Lloyd Atkins, assistant director of the Small Business Development Center (SBDC) at Georgia State University in Atlanta.

Prince, 43 and single, left a near six-figure middle management career at a Fortune 500 company in February 1997. She opened her own company one month later. Before quitting, she negotiated a package to help pay living expenses, researched the market, wrote a business plan, obtained a loan of $20,000, matched by $20,000 of her personal savings, and started up textbook perfect.

Writing a business plan is time-consuming, but easy to do. Pick up a copy of Business Plans Made Easy: It's Not as Hard as You Think by Mark Henricks (Entrepreneur Media Inc., $19.95). And go to the library and check out Annual Statement Studies from Robert Morris Associates for hard data on businesses like yours. Log on to the U.S. Census Bureau's Website (www.censns.gov) or a chamber of commerce site like the New Jersey Commerce Business Resource Center (www.njbrc.com) for state, county and municipal demographics. Then, go to your local SBDC (contact 703-271-8700 or www.asbdc-us.org for locations) and let a counselor help you write the plan.

GET EXPERIENCE IN THE FIELD

"If you haven't already worked in that business, there's no way you're going to succeed because you don't have the background for it," says Cleveland SCORE's Miklis. "You don't even know how to price, or how much competition is in the area."

It's "a formula for disaster," agrees Francisco Marrero, the U.S. Small Business Administration's (SBA) district director for New Jersey in Newark If you want to own a flower shop, "start by working part-time at a flower shop. Try to work in the different areas of that shop so you get to know the different aspects of it." Then, find an SBA Business Information Center (800-827-5722 or www.sba.gov) where the shelves are crammed with handbooks on entrepreneurship. Also, search the Internet to see what other information pops up under your business category.

John Erving Jr. of Willingboro, New Jersey, carried over his sales and marketing experience when he left a full-time job as a territory manager at Kraft Foods in 1996 to devote more time to running JonMar Creations Inc., a $60,000 ethnic greeting card business that he and his wife, Margaret, started in 1995. Erving also took a part-time sales job at a local Wal-Mart to help make the transition easier on the family's finances.

The Ervings used $12,000 in savings and a $30,000 Economic Development Agency (EDA) credit line. "It takes a lot of courage to walk away from a 9-to-5 job when you get a paycheck every week and you're going into the unknown," Erving says. But, a little over a year later, after building up a good customer base, he also quit Wal-Mart and made the full transition to JonMar. "That time, I wasn't scared at all," he says. "I felt a lot more confident that I'd be able to support my needs and support the business."

Trade organizations and franchise training programs are terrific resources for getting your feet-wet in the industry, too, says Melvin J. Gravely II, author of Making It Your Business: The Personal Transition From Employee to Entrepreneur (Impact Group Consultants, $16.95). Trade groups hold regular training seminars for members. So do franchisors who have a direct stake in seeing that franchisees are successful. You'll learn about the industry, operations, inventory control, marketing and financial management.

BEGIN SLOWLY

Start the business part-time, then make a gradual transition to full-time. This way, you can use your job to capitalize the business and pay personal expenses while building up clientele, experience and confidence. "It is very difficult to lose income and start a business," says Inno Ekeh, Ph.D., a consultant at East Bay SBDC in Oakland, California. "You never know how it's going to be, what's going to happen, whether it'll be profitable immediately--or if it's even feasible."

Most black women start their business part-time, according to Women Business Owners of Color, a study by the Silver Spring, Maryland-based National Foundation for Women Business Owners. Nearly half, (48%) of African American women surveyed in 1997 say they started a business while working full-time at another job, compared with 35% of Hispanic women and 22% of Asian and Caucasian women.

Shemayne Andie-Williams started part-time and took the leap into full-time entrepreneurship after two years with just $4,000 of personal savings. She had been running A Basketful of Wishes, a gift basket business, from her Ridgefield Park, New Jersey, apartment while biding time in a "stagnant" corporate job. One day, she walked in and quit. Seven years later, she now runs a $100,000 business, with mostly corporate clients, on busy Bergen Turnpike in Ridgefield Park. Recently, she expanded into mail order and e-commerce activities (www.abas ketfulofwishes.com), which boosted annual sales by 20%.

Starting up part-time enabled Dexter Merritt of Gaithersburg, Maryland, to build a successful art-publishing business that posted profits after four years. Merritt, 36, started Positive Black Images Inc. nine years ago while working for IBM Corp. in Texas. He financed and grew the business using his paychecks. By running small classified ads year after year, he painstakingly built a network of 20 freelance artists and nearly 8,000 full- and part-time distributors of art prints, posters, calendars and greeting cards. Today, Merritt is a full-time computer lab manager at Lockheed Martin in Gaithersburg, and his company--a part-time operation by choice--has sales of $300,000.

"Cut down on your working hours and increase your business hours until you can make a full transition," says East Bay's Ekeh. "If an employer values your contribution, and you're in good standing, he or she may choose not to lose you completely."

DEVELOP A NETWORK OF ADVISORS

Most entrepreneurs aren't experts at running every aspect of their business, and are too close to be objective. So they need a team of advisors--an attorney, certified public accountant, lawyer and banker. You may also need a mentor-someone you can use as a sounding board. Good sources for mentors include the SBDC, SCORE or a membership-based organization such as the National Minority Business Council (877-275-6622, www.nmbc.org).

Ethnic By Design's Prince sought help from the One-Stop Capital Shop in Atlanta and Atkins at the SBDC. They helped her set up the infrastructure of her business, develop a strategy, write a business plan, determine her financial needs and assemble the financial package that she showed to three banks. Personal acquaintances and other entrepreneurs rounded out her advisory team.

GAIN CRITICAL FAMILY SUPPORT

Families and spouses may want to be supportive of the business, Gravely says, but initially they may only see the sacrifices they'll have to make--in money, time you no longer spend with them and the perceived financial risks that you will have to take. Sit down and explain clearly what the business is about, what your plans are and what family support you'll need.

A supportive spouse can make the transition to full-time entrepreneurship much easier. Margaret Erving continued working full-time and paid the bulk of household bills while her husband, John, left his job to run JonMar. She also works the trade shows. Shemayne Andie-Williams' husband, Ron, picked up her personal bills and their household expenses until she got A Basketful of Wishes off the ground. Merritt's wife, Zina, a senior auditor for the U.S. General Accounting Office, contributes valuable financial services and creative marketing skills to Positive Black Images as its director of business development.

Unsupportive spouses can be problematic, especially for women entrepreneurs, says SCORE's Miklis. A woman may give up her full-time job--money the family depended on--in order to run her business. But her husband may balk at picking up the financial slack and even refuse to help tend the children. "If he's not interested in taking up the slack, you're in trouble and the whole family will suffer," Miklis warns.

MAKE YOUR MOVE WHEN THE MONEY'S RIGHT

Your finances may never be what you want them to be. Still, the No. 1 priority is to make sure your financial house is in order before quitting and starting a business. That means having a financial plan to provide enough equity to start the business, and having adequate capital to fulfill your needs, says the SBDC's Atkins.

Once you go into a business full-time, expenses soar. Increased inventory, rental of office space, and sales, marketing and payroll costs can cripple an underfunded business. That's why most experts recommend having at least a year's worth of paychecks saved up before making the full-time entrepreneurial leap. Potential sources of start-up capital include an SBA-backed bank loan; an SBA "Cap Lines" loan or "SBA Express" credit line; an SBA export loan (212-466-2958); an SBA Micro Loan; angel investors--individuals with money to sink into start-up companies in return for equity(ACE-Net, http://ace-net.sr.unh.edu); or a Direct Public Offering (DPO) of modestly priced stock shares targeted to an affinity group.

But raising money won't be easy, as Josephine Thomas can attest. She has embarked on another venture, this time with second husband James W. Thomas II, a controller for a midsize manufacturer in Fort Lee, New Jersey.

Together, the Piscataway, New Jersey, couple saved up $50,000 and started Thomas Foods Inc. in 1996 to make and sell a sweet, spicy brown sauce that James grew up eating at home. Tony Dorsett's 33 Sauce, named after the retired Dallas Cowboy running back, a relative by marriage, is sold mostly in stores, delis and via the Internet at www.tonydorsett33 sauce.com.

But, the Thomases aren't in a position to quit their jobs and go into the business full-time--yet. The money's not right. They're trying to raise $1 million in equity financing to fund inventory, sales and marketing costs, in-store advertising, a computer system and working capital.

When the financing falls into place, one of them can quit their present job and focus on the company. Meanwhile, it's tough finding time to run the business, and even harder to figure out how to move forward--with just $30,000 in annual revenues--on leads such as a commitment from national retailer Wal-Mart to sell their sauce in 220 stores and 13 states. "We need some additional financing to be able to take that order," says Jim Thomas.

This time around, Josephine Thomas knows not to quit and jump into business until the money's right. "Our full-time jobs allow us to keep the business going until we get the money we need," she says.

It may never seem like the right time to take the leap from a comfortable job, with good pay and perks, into full-time entrepreneurship. But with careful preparation you can increase your chances of success.