I’ve been a self employed internet entrepreneur for almost a year now and in my time running solo I’ve learned a few things I wish I would have known before going after my internet business full time. The ideal scenario is that you get to choose when to leave, in my situation I didn’t have a choice to quit my day job because I was fired.
How I got fired
Long story short I was an inside sales rep and worked with an outbound sales rep. My outbound sales rep wanted me to work more than 60 hours a week instead of the 40 – 50 I was doing, but I wanted to spend as little time on my day job so that I could get home and work on my internet business. I was working in a salaried position and although I was paid on partial commission the added money I could earn from the extra 20 hours a week of work would have been negligible (I am a firm believer in the Pareto Principle – 20% effort gets 80% of the results). Although the decision to quit was made for me ๐ I’m going to share some advice based on my experiences after making the switch from employee to self employed which I believe should help you prepare when you decide to make your own transition.
How to quit your day job
These are 3 important questions you should ask yourself before telling your boss to shove it and pursuing your business full time:
1. Are you turning a profit greater than or equal to your day job income?
First thing’s first you need to be making a second income. I don’t care how many blogs you comment on, blog posts you write, forums you created, websites you own etc. and you shouldn’t either. All you should care about is at the end of the day – how much profit is your online business generating? I could go on for ages about how to make money on the internet, but you can look at my other blog posts to get ideas for that and if you’re still strapped for ideas, sign up for my newsletter. I’m releasing a free eBook on how to make money with Amazon.com (my primary income source). At the time I was fired I was earning about the same as my day job and on occasion a little more depending on the month which helped make the transition much easier for me. If I was making less than my day job I would have had to both cut back on expenses and find a way to make even more money.
2. How much money have you saved?
If you’re working a day job and running an online business you’re essentially working two jobs. If you’re turning a profit then ideally you should be reinvesting the money into your business and saving it in a separate business bank account. It’s important for you to be thinking about this from a long term perspective. Now is not the time to be spending your extra income on a brand new car or some other frivolous expense. Ideally you should try to be doing both saving and reinvesting. In my situation, I was doing almost entirely reinvesting because I wasn’t thinking that I would get fired. In my sales position I had already hit my target sales plan for the year almost 3 months early. So I spent several thousand dollars buying domain names, websites and I also spent over $6k to go to Shoemoney’s Elite Retreat event. In fact, two weeks after I got back from Elite Retreat I got fired and unfortunately I had to use an entire month’s worth of website income to attend that event. Now because I was reinvesting most of my earnings and not saving very much it put me in a very difficult position. I was making too much to qualify for unemployment from the state (which is a good thing of course) but I was making about as much as my old job so I decided to just pursue my business full time even though I only had about $7,000 in my business account (roughly 2 month’s worth of bills). After I went full time as a solo web entrepreneur literally everything I did in my business had to work or it meant me going back to get a job because I had so little in savings. Yes, this helped me ‘rise to the occasion,’ but it also added an incredible amount of pressure. Before you quit your day job I’d recommend you’re making at least as much as your day job and have at least 3 – 6 month’s worth of savings on hand. This will give you some additional breathing room and provide you with money to invest in your business.
3. Do you really want to work full time for yourself?
This may sound like a silly question, but depending on your current employment situation the transition from employee to self employed can be quite jarring. I worked in an office with about 60 other people most of whom were my age. The people that I worked with were my friends and I had a lot of fun on my job during my breaks and at lunch. The work wasn’t particularly bad except for my annoying outside sales rep. I probably could have stayed at the job until I had about $30k saved up from my business before I would have considered quitting. The reason why I wasn’t in a rush to quit is because I am very outgoing and enjoy being around people which is partly why I like meeting up with other entrepreneurs in Seattle (i.e. Neil Patel, Matthew Inman, etc.). My point is that unless your current job is very isolated then it’s hard to prepare for the isolation you’ll feel after you decide to make the leap to full time internet entrepreneur. In fact, this is partly why I’m trying to do my best to keep earning more money each year starting with my goal of $150k this year. If I can accomplish that this year then I’ll shoot for $250k next year and eventually I can start up an office, hire a local team and finally have people to talk to during the day! ๐
Closing Thoughts
The day you decide to work for yourself is very exciting, but if you want to improve your chances for success I highly suggest you have at least 3 – 6 months worth of savings on hand and I recommend you’re making at least as much as your day job or more. I would also suggest that you take the traditional approach and quit your job as opposed to getting fired from it because it’s better to be in control of what happens next rather than having someone else determine the next move for you. As much as I’ve said how difficult it can be to work by yourself full time, it really can be a lot of fun and if you can find a way to make it happen I recommend you go for it.
Upcoming: I haven’t been writing as much this month because I’ve been working on my free Amazon eBook; however, as always I have more exciting stories to share on the blog so please do stick around. If you want to hang out I’ll be at 15th Ave Coffee in Seattle on July 21st at 7:00 PM. Details are posted in this thread on the Warrior Forum.
Three basic but important questions Chris. Good stuff!
“I don’t care how many blogs you comment on, blog posts you write, forums you created, websites you own etc. and you shouldn’t either.”
Yep, it’s sinking in…
I’ll be there at the meetup!
That’s great. Looking forward to meeting you. I’m hoping we get at least 10 people or more.
Really great post and advice,
Many people just go ahead and quit their day job without proper planning, many of them don’t even know what it is to make money online and the end result is that most of them will suffer a lot before they make money online (if they don’t eventually quit).
Thanks a lot for the great post,
-Onibalusi
60 hours? As if they are trying to kill you. I don’t think that I could do that either.
Yah, he wanted me to work from home on weekends, get to work early and stay late.
I quit!
I use to work as an accountant for a big hotel. Turned out I didn’t like accounting, so I wanted to leave. It took me a year to put my exit strategy into place.
In a years time I had found a work at home internet job that was paying me more than what I made at the hotel. Gave my hotel boss 2 weeks notice and never looked back.
Thanks for the advice Chris. I can really relate on this post as I’m looking forward to fire my boss, but i know that proper planning is needed before I make my decision.
Kind regards,
Gary
The other thing I’d suggest is to make sure you don’t discuss it on your blog ๐ you don’t want to get fired because you were talking about how you were planning to quit online.
Hey Chirs,
Nice Post. You’ve listed some great Points. Awesome work dude.
Thanks for sharing this great Post.
~Dev
My biggest thing with going alone is the benefits you lose at your career job. Insurance and all of that can really add up. Make sure you run the numbers over and over again before you quit.
I’m just using the COBRA right now and it’s not too expensive to maintain my past coverage. Obama signed a bill that extended Cobra coverage at a discounted rate (70% off) for a total of 12 months or so. There are also health insurance plans for people that are self employed as well.
Benefits are a huge deal for many people, but you are paying for them through your work, you just don’t realize it. Your benefits are a direct expense to your employer- if they didn’t have to pay them, then they would be paying you more. (In theory)
I actually am interviewing right now, looking for jobs that have benefits, because our health insurance premiums keep skyrocketing. So for me, that $10 an hour job with great benefits looks really, really good right now.
-Valorie
You can get pretty decent benefits as a self employed individual though. Also, as I mentioned in the other comment you can get a COBRA for 70% off for about 12 months which should be enough time to get you into a position where you’re earning even more.
It’s my dream to be able to work full time from home. I started making money online just over 2 years now, and I’m really loving the flexibility of it. But you’re right… the reason I still need to go to my day job is because I’m not make a “full time income” from my site yet. It’s about 1/2 way there though, so within a couple more years, if that many.. hopefully I can tell my boss to “shove it”.
Wouldn’t that be a great day!
Thanks for the great advice and inspiration to keep earning online.
Very insightful Chris
When I first started in IM 18 months ago, I quickly realised that due to the nature of my job and family committments I would not be able to do some of the dedicated work it takes to get the business off the ground. So I was really lucky to get introduced to the work of John Jonas. I launched immediately into outsourcing my work because that was a fit for me and as a trainer I could easily send my workers videos to let them know what I wanted. At first I could not even see how I was going to recoup a ๏ฟฝ1 let alone make a penny but in no time their work began to pay off for me and now they pay for themselves and my profits are growing slowly. I can now see that I can start to think about crtical mass and sacking my boss but I will need to invest in more workers to ramp up the volume. I haven’t got a problem with that as we all need to follow systems that work for us. Here is a report for your readers, it might help people like me who had to start from scratch.
Warmest
Gradle
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Chris,
I too quit my job a few years ago to go full-time online. I was gagging for the opportunity and my work mates (including my boss) were instrumental in me leaving. They would shake their heads in astonishment that I was still working a job when my monthly expenses could be covered by my online activities.
Of course, the benefit was that I lived on my salary and was able to use my online income for fun and for reinvestment. $200 to submit to the Yahoo directory? No problem! A $500 course? Easy!
When I finally quit I actually found that I only had around 4-5 hours of productive time each day – and that I missed “face time” and found sitting alone at my computer quickly got stale.
So I actually rearranged my working day to deal with that. I got up early, worked till lunchtime online, and then spent the afternoons doing whatever I wanted. I accepted that struggling along all day simply wasn’t as fun as I thought it was going to be and once I’d made that realization I found that my productivity increased, my free time increased and my enjoyment of not working for “the man” increased.
But I’d never have guessed this would be the way without actually trying it out to begin with. Isn’t life strange? ๐
Hey Richard, thanks for sharing. Yah I still struggle with productivity, healthy work / life balance etc. much more so than when I had a day job. I guess that’s why I want to make enough money that I can hire some staff so that I have to go in for work lol.
How to quit? Simple. Just give your manager the letter. ๐
I wished it could be as simple as the above comment by Jayce. But ya it is not, one needs to follow all the rules that you have stated. Most importantly he must be earning more or atleast similar amount of money that he is earning from his day job. On top of that, he must know how to maintain that income and then there is the whole saving part. Wow, a lot of things need to be done before deciding to go solo ๐
[…] Guthrie in a post titled “How to Quit Your Day Job“ writes about a more conservative approach.๏ฟฝ He asks the […]
If you have several months (say more than 6) in the bank then I see no point in waiting until you have your full income replaced to get started on a full time basis doing what you believe in. Speaking for myself 8-9 hours a day (minimum if at office 8 hours +commute) 5 days a week means that I have not so much good energy on weekdays for my hot startup idea I have been shepherding along. By the time I see the loved ones and eat dinner the brain isn’t good for a lot beyond surfing the net and a TV show before it is time for bed and to start the entire thing again. I can’t describe how sick I am of this after 35 years as an employee!
The weekends I have such a sense of freedom from the week I usually “blow” one day exploring my very wide interests. So my startup ideas go s-l-o-w. It is a software product and those are difficult to build just giving a slap here and there. It takes hours of focus to move forward at times. Hours I don’t have with the day job.