What are some things I should consider before I decide to give up my day job and focus on my startup full time?

I love this! Congratulations on a smart approach to launching a startup. I got a chance to talk to DHH - founder of Basecamp and hacker. (read about it here: http://blog.unthink.me/what-i-learned-in-1-hour-with-basecamps-founder-david-heinemeier-hansson)

One of his biggest pet peeves is the idea spreading like wildfire that entrepreneurs need to jump head on an idea and let the wind take hold. What he suggest and what is greatly showcased by you here is to hold a job and take your startup as the side business until it can sustain itself off sales alone. Don't give equity left and right because if it does take off the last thing you want is to build something you don't own.

If you have been acquiring customers for your product before it's built - that means that it should be relatively easy (compared to most) to get sales once you launch. You are already doing the bulk of what needs to happen which is marketing - simply boost your focus on getting referrals and case studies off the initial sales, ask clients about their core reason for handing you their money and drive that message/reason home on everything you from website to branded material to PR articles, etc. If you end up hiring a marketing agency to help with the next steps, look for the added value of programmers in staff so that they can coordinate what's needed once things are rolling.
Essentially consider the fact that you need to start marketing it and positioning the product with the right prospect clients, get it launched onto product hunt (i could add it for you) because the truth is that you have 3 months to create a marketing system that is helping you sale.
Don't be too afraid of jumping in full time if you can afford at least a few months solvency for yourself and if you are having sales.

You must have heard about many stories of startup failures that surround businesses. You know that 9 out of 10 startups fail and that almost half of all small businesses close down before their 5-year anniversary.

It is the passion that should drive you in your startup. If you feel that this is the right time, then go for it. This reminds me of Gene Caballero, Co-Founder of GreenPal. Before starting his business, he worked as a sales coach at a Fortune 50 tech company. Having done both jobs for 4 years, he knew that at some point he was going to have to quit my day job to pursue his startup full time.

His tipping point was when they hit 500 transactions per week with GreenPal, which has been described as the Uber for lawn care. What this did was prove that their concept was something that could scale and allow him to leave with a better peace of mind.

I will be happy to discuss and identify your tipping point. Go ahead, setup a call.

Thanks
Shishir

Been bootstrapping a HaaS company for 3+ years after quitting my job. Some good SaaS-specific advice has been given above but the fact you've been struggling to develop a finished product in 3 years, which is almost an eternity in software, sounds alarming. I'd look into this oddity and assess your execution capability if you switch to full time. It does liberate you and definitely advances your business faster but doesn't make you a super hero either.

Also, consider the typical financial advice: don't quit before you have a 6-12 months cushion to face tough times. SaaS is hard.

I made the jump from my single client (job) to multi client cashflows in 2005.

The way I think of this is...

"At this point, we're all really freelancers. The only difference is if you have single client (job) or many client income."

My preference == Many clients income.

As soon as your startup produces profit enough to cover your current income... quit your job...

Then focus on putting in more paying clients every day.

Why are you assuming that you will become the bottleneck? Have you talked to your employer about going part-time or getting some flexibility in your hours? If you are a valued employee, your employer may be willing to work with you to keep you on payroll as long as possible. What options are available to you (hiring someone part-time, etc) before you make the leap?

If you truly believe in what you are doing, you are committed to it and have the savings to take care of your expenses while you are getting established then jumping into it full-time may be the right decision. If you are going be awake at night second guessing yourself then maybe not.

No matter how you slice it, you'll be taking a risk. What's tough about this transition is that -- although you can do the math and attempt to project your income in both scenarios -- what you cannot quantify is how much your startup will benefit from the free mindspace you will have when you're no longer spending most of your day in a full-time job.

That part is a bit of a "leap of faith."

When I was considering quitting my comfortable Director of Marketing role to dedicate my days to what has now become my digital agency of 6+ years, a mentor of mine plotted out a simple graph for me. Time on the X-axis, income on the Y-axis, and 2 lines: the first one representing how income level would grow if I stayed in a traditional career, being promoted every so often, steadily growing, etc. The second line reflected my income as an entrepreneur. In the first few years, that line sucked. But pretty soon, with hard work and a little luck, it might grow sharply, and there could come a point where it intersected and grew far beyond what the "safe and steady" line could offer.

As it turns out, that's exactly what happened in my life -- and it didn't take all that long in the end.

This is obviously different for everyone and there are no guarantees, but I'm sharing this because I found it to be a useful way to look at the risk vs. reward of leaving stable employment to focus 100% on growing something new and fragile.

I went through the exact same experience. I was working for a software consulting agency making a very good salary. However, I started an online business on the side that began to grow quickly. I was faced with the decision to stay in my secure job or to officially expand my online business. There were a lot of things to consider but my favorite activity to organize my thoughts is to go through the the “3Cs and 4Ps” exercise.

Any business venture that you plan to embark upon should go through the “3Cs and 4Ps” exercise. You’ll soon realize how incredibly valuable and insightful this exercise is. It may seem simple, but the “3Cs and 4Ps” exercise really allows you to think about a business venture in a structured way. Once you force yourself to really go through this exercise, you’ll realize how much you didn’t know about the business idea you had in mind. This is critical because you want to know that the venture you are about to embark upon is worth giving up a secure job for.

You can read more about it at: https://pezlogic.com/2011/10/20/the-3-cs-and-4-ps-a-critical-first-step-in-business-planning/

Remember that the 3Cs and 4Ps will continually need updating as your business grows and changes. It is what we call a “living exercise” so you need to come back to it often to refine your strategy and approach. The exercise may seem obvious, but once you start thinking about each step in the process, you’ll be amazed at how much more organized your business planning will become.

I really love this question because this is what I have done in last month. I was doing the full-time job and trying to setup my startup since the last couple of years. I spent restless nights to build long term clients who can believe on us and can hire few team members for full time for next couple of months. On those times it was a really tough situation when you are doing a full-time job and at the same time, you are working for making a strong impact with new clients for your startup. But now when I look back it is just the things as an entrepreneur we have to do and at some point of time, it pays back to us. Finally, I found few clients with whom I am working since last more than a year and they hired our team for their projects.

You also need to think before you step out that do you have sufficient cash backup so you can pay your expenses/salaries even at some dark time when you do not have sufficient work for the team.

At the end, I just want to quote one line which I read a long time back and I really love this “To reach your greatest potential you'll have to fight your greatest fears.”