Forum Moderators: phranque
If you care why I ask…
My current ‘real job’ as an engineer (EIT) pays just over the industry average for my location and the benefits are descent. It’s an alright job and I don’t mind it but it’s not the slightest bit challenging and quite boring. For the past two years I’ve been working on websites in my spare time and slowly started building up the monthly revenue from them.
Recently, I stumbled into an idea that has done quite well relatively speaking. Where as two month ago my sites pulled in about 20% of what I make in my ‘real job’ now they are pulling in 60% of what I make at my ‘real job’ and they haven’t stopped growing. None of this is based on advertising or affiliate programs, 94% of the revenue comes from subscriptions.
Right now I get home from a normal 8-hour day and work and additional 5 to 6 hours. My personal work is much more rewarding than my normal job and I would love rather spend 12 hours a day doing that than 8 hours a day M-F at my normal job. I’m just obviously skeptical about making that leap.
I have a similar goal, but my goal is somewhat elusive:
Make 3X what my day job makes AND from seperate revenus streams.
I say 3 times the pay because anything less than that and I'll be afraid to make the jump. Call me a 'coward', OK, I can handle that, but I have a family to support and they need the INCOME.
Just my thoughts on the subject.
I am on my fourth company personally. I've been at it since I was 22 yrs old. (29 now)
Failed on my first two, going strong with my last two.
Be careful, be pragmatic, plan for the worst, hope and operate for the best.
There is nothing more rewarding than having your own company, imho. Once it is in your blood, you can never really go back.
Get ready, cause everything is about to change;)
Remember,
-always, to trust your instincts
-luck is for the birds
-you are a special individual and it is yours
-know who you are and know who you want to be
-be passionate about what you do and dont look back
nothing will be the same; but with you woop01,
justin
the harsh truth is that some people can do it and others can't. my observation is that some (very talented) people just can't hack the self employed thing and others (less talented) can make a great successs of it.
i believe that it is a totally different mindset to being employed - and it is way more work than most people expect at first, you also can end up very isolated in some respects as you don't have collegues or workmates in the same way anymore.
where i have found most difficulty although i have eventually come to a better understanding of it, is budgeting properly: having a really solid financial plan and ensuring you put money aside - because you just do not have the financial cushion that employment gives you.
One is "regret". Its always going to be there with you. Like fear, just depends on how you "manage" it.
The other is knowing the difference between "income" and "turnover". They are two very different animals in every respect and in no way do they "equal" the same thing. The money you put into your pocket after pay day is not the same as the payment you collect when getting paid for services rendered. Typically this money is split 3 ways - overhead, materials (cost of sales) and expenses. If you're lucky and the business is "truely" profitable, you might get to pocket 10 to 15% of that cash. Not the same as a pay cheque.
Then, relating to the above, there are the small things like, "on income, you pay tax. On expenses, you don't" - and figuring all that out.
It doesn't matter what type of business you're in, these are universal truisms.
If you haven't already done so, get along to an edu or business college which offers units or courses in business management.
Most of it'll probably drive you nuts, but at the end of it, you'll have 2 or 5 year business plan.
Doing the course and the business plan will tell you pretty quickly whether you've got what it takes.
If you do and you take the leap, then by the end of the first year the plan'll probably need to be redone, you'll be back working for someone else, or you'll well and truly have the bug and you'll be joining the rest of us real entreprenuers who've failed at least 3 times (the going rate here in Oz is 5 failures before "success"), but at least you'll never suffer from the "couda,shouda,wouda bes".
I approached self employment with some trepidation, but getting well prepared and having good advisors (accountant/tax etc.), as well as being able to network with other local SOHO workers and have a mutual whinge when things are less than perfect, have meant I simply can't imagine working for someone else anymore.
Go for it!
Cheers and best of good planning
JP
Tis indeed a difficult decision, especially if others are dependant on your income.
For me, I came to a point where:
i) I hated the job I was in
ii) I saw an opportunity, having built up a small business part time
iii) My wife was earning enough to keep us afloat should the firm go t*ts up
This added to the fact that I knew I was never going to be happy working for someone else (I just don't take orders that well ;)) and the thought of looking back and not knowing if it would have worked, all added up to an irresistable opportunity for me.
That said, I read a bit of research recently showing that the majority of self employed people are optimists, and therefore prone to underestimate the risks and overestimate their chances of success (which is certainly the case with me too).
I had to work pretty hard to develop a pessimistic attitude about finances, which means that 5 years down the line, we're still afloat and doing not bad. Regret it? Not in a million years, despite the poor pay :)
Good luck with your decision
Cy
I had to work pretty hard to develop a pessimistic attitude about finances
when starting up with an income.. hrm.. tunover (even though it´s only 60% of what you've got now, i'd say you are better off than a lot of others starting up on hope and (believed to be) talent alone.
But, of course you always have to watch that burn rate. You've got a) some money coming in, and b) some money going out - subtract b from ((a - costs) - taxes) month by moth for a year, and you've got a budget. If it ends up balancing, by all means do it :)
If it doesn't, at least you will know exactly for how long you'll be able to eat and pay your rent - implying that "at this-and-this-time-you've-got-to-make-some-sales-or-it-sucks". This doesn't have to mean that you shouldn't do it, but do keep your expenses low.
In my experience, few people in the first year has anything like the dough they had when they were merely corporate slaves, and they (still) work for long(er) hours - but, really, most of them look healthier, they seem friendlier, they sometimes even smile a lot ;)
Good luck if you do it, i have about 25% of past income now, and absolutely no benefits. Then, I also was very well paid back then. But by all means i'm a much happier person now.
For me, it was a question of staying in the same safe (and very comfortable and profitable) job for the next 20 years, or taking the chance of going it alone and making my own mistakes and benefiting from my own ideas.
I took the plunge because if I hadn't I would always have looked back and wondered "what if" and because I believe it is always good to shake up your life at regular intervals.
Now I'm not only designing sites and content - I'm also designing my own life - which is a very fulfilling feeling and has led me into areas (with nothing to do with computers) that I wouldn't have thought of at the time I resigned.
Do I earn less and work harder? Undoubtedly. Am I fitter, happier, mentally reinvigorated, more open to new ideas? Absolutely.
I wouldn't change it for the world.
Shake off the buy-now-pay-later mindset, and learn to save for things and pay cash. You don't have to become a miser, just plan your spending so you don't get locked into monthly obligations or have to scramble to make payments. Operating on credit can be okay for carefully calculated business investments, but other than that, do your best to operate on a cash basis.
Do any of you think you made the jump too soon? Too late?
Too soon in my case, though I did succeed. I only had one months salary saved up when I jumped - wouldn't recommend that. You should save, plan, etc, etc... but honestly, if you wait for the "perfect" time it may never come.
I’m especially interested in people who made that jump and ended up regretting it.
There's no regrets, win or lose. Personally, I would have regretted it so much if I never gave it a shot that I wouldn't have been able to live with myself. So I had no choice :)
I never really made the 'jump'. I've always worked for myself, been in business since I was 18 (30 now). While I have been in 3 different businesses, I am still running 2 of them (other one was a fad business, got 2 years out of it which was expected).
Be prepared to work twice as long as any employee, starve sometimes, make a killing others. It DEFINATLY is not for everyone. If you are not disciplined with money, budgeting, and planning, dont even bother. A good friend of mine quit his job last year to start a company, and is back at his job 1 year later. He just couldnt budget properly.
Two months he made very good income, blew it all, then couldn't pay his taxes.. I could have killed him for being so dumb. Then I realized, he just didnt have the discipline to budget.. doesn't make him dumb, or a bad person. Some people have it, others dont.
So, moral of the story.. if you have the financial backup to possibly live on peanuts at first, are disciplined, and LOVE your work, go for it!
Whatever you decide, good luck with it and let us know what happens :)
If you spent the creativity and energy finding, negotiating, and developing a "job" with the right "employer" - e.g. took an entrepreneurial attitude to it - I guarantee you would be happier, more fulfilled, and wealthier than if you "struck out" on your own. That is, if what you want is this beautiful dream job in your home without a boss. You'd be much better off doing temp or contract work, for the same experience.
But if you want to be a business person, if it's the entrepreneurial thing that's calling you then you don't need any advice.
The difference and the test is scalability - if you can only handle as much work as you have hours in the day, what you want is the perfect job. If you want to build an entity you can grow and delegate, then go for it.
imho
But I have a really good job, a great company, and the boss treats me well. It's just that I'm bored with the work!
I could actually quit right now, and support my wife and myself, and pay all the bills just from my website income. But, I'm still uncertain that 6 months from now that income will still be at this same level or higher.
Don't forget, you have to buy your own health insurance! Most individual plans don't offer the same great coverage you get from a group plan.
Did I regret it? Well yes and no. I regret not talking to the right people and I regret not understanding “the bigger picture”, but overall, no!
The main thing is to watch for the boom bust scenario - cost me my first business, house et al. Most people can hack it when the goings good, but it’s when trends change that when real players are left standing.
As Justin said “Be careful, be pragmatic, plan for the worst, hope and operate for the best.”
So go ahead and jump [www1.tip.nl]
Rich
If you spent the creativity and energy finding, negotiating, and developing a "job" with the right "employer" - e.g. took an entrepreneurial attitude to it - I guarantee you would be happier, more fulfilled, and wealthier than if you "struck out" on your own.
Good perspective-- a lot of times we're bombarded with "the job world stinks" propaganda and attitudes, but my guess is a lot of those people don't realize that their desitiny is just as much in their own hands in the job world as it is in self employment. Where and how you work is where you work.
Wow, I should heed my own advice..
woop01-
check out the book by Spencer Who Moved my Cheese? [amazon.com] for good perspective in whatever you decide. I think I'll give it another read myself!
