He quit Wall Street to make men's coats. Good decision?

Don't quit your day job ... yet. Or, at least wait until you talk to Carol Roth, a small-business advocate, "recovering" investment banker, and author of "The Entrepreneur Equation." In a new digital series, Roth takes on would-be entrepreneurs who want to abandon their current careers for new small-business ideas. Here, she analyzes Wall Street hedge funder-turned-entrepreneur Michael Berkowitz, who founded Norwegian Wool, a company that makes men's coats that are warm (down on the inside) but stylish (wool on the outside) — and waterproof.

They say that money can't buy you love or class. But one thing that it can buy you is flexibility — particularly when it comes to starting a business.

Businesses often take multiple years to firm up their foundation, as the entrepreneur's vision often changes while they navigate the reality of the marketplace. Not to mention that the "Rule of Three" kicks in — that is, when it comes to business, things usually take three times longer, are three times as difficult and cost three times as much as you expect them to — or than they probably should. That's where having financial flexibility comes into play.

Take Michael Berkowitz, CEO and founder of men's coat maker Norwegian Wool. He did a number of things to create the financial flexibility it takes to make a business successful. He first started his a career in finance — most recently at a hedge fund — to put himself in a financial position where, when he started his business, he wouldn't have to make personal vs. business decisions. (such as choosing between paying the rent and keeping his business afloat.)

He also did a full business "proof of concept" (a feasibility study), which helped him start to solidify that business foundation before he went full-time with it. He started his business on the side (something that I like to refer to as a "jobby" — a job that's a hobby on the side of your regular job) to see if it was viable before making a full-time commitment.

Lyngen Collection.
Source: Norwegian Wool.
Lyngen Collection.

He also got some real, tangible consumer feedback to indicate that his product solved a market need. Often, would-be entrepreneurs look to their friends and family to buy their product and when a few do so, they believe that proves a market need. What they forget is that many friends and family members want to be supportive, so they make an initial purchase out of kindness vs. an actual want or need for the product. Because these friends and family members are not "real" customers, the entrepreneurs misread those purchases, not waiting to see if they receive ongoing repeat purchases or if a broader market has a legitimate interest in what they are selling — if they even know how to reach such people in the first place.

With Norwegian Wool, Michael kept it as a jobby on the side until he had a couple of years of experience and more than six figures in sales, enough to prove out the financial and market thesis behind the business.

Moreover, by waiting until there was a solid proof of concept, it reduced the financial strain that the business could have on Michael's life and allowed him to walk into the business full-time, starting at "square two" instead of "square one." It will also give him more opportunities to adjust and pivot if things don't work out exactly according to plan.

While it may be enticing to see entrepreneurship as the path to financial freedom, remember that it often takes money to make money. Having financial flexibility creates more options in terms of decision-making and gives you as an entrepreneur a greater chance at success with your business.

So, should he quit his day job? I say ... YES!

If you're an entrepreneur looking to turn your hobby or "jobby" into a full-time career, we want to hear from you. Email: AskCarolRoth@cnbc.com.