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
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.