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I am in the process of finding that right time myself. First I am creating enough content for a really good (I hope) website and brochure/flyer/direct mail thingy, and enough samples to display in whatever appropriate venues will have me. Also enough material to enter a good trade show - I'm thinking the Royal Winter Fair as I do a mean horse (and dog) portrait. Then I would ask for an unpaid leave of absence if I thought for one moment I would get it, although some companies will do that sort of thing. Failing that I will ask for part time work. Since my company does not like that either, I might consider getting an offer of good part time work elsewhere first, and then approaching my employer.
Having a skill that you can freelance out is nice, too. I've got graphic design and illustration. If I didn't, and I was a reasonably young man, I would be thinking landscaping or construction as per Henry. Up here it offers low to reasonable wages, insane hours in the summer and Unemployment Insurance in the winter.
I might also consider taking a pay cut and taking a more flexible job as a transitional stage.
I have thought this inside out and upside down. The final answer is most likely as Michele noted: Everyone has to make that decision for themselves. I think that for me it will get to the point where no other way of life is remotely acceptable, and then the decision makes itself.
Good luck!
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