I don't think there are many of us alive who haven't,
at least at one point or another,
fantasized about walking into our boss's office and screaming that we quit.
Even if your job isn't exactly a hellhole and your boss isn't evil incarnate,
and your fantasy exit scene is a lot less dramatic than storming into your
boss's office, middle fingers raised,
you might still be wondering when is the best time to quit?
Should you do as some gurus suggest and just pull the plug on your day job so
that you can move full steam ahead into your passion project,
or is that really terrible advice? And if it is terrible advice,
what should you do instead so that you can get your new gig off the ground and
making money as quickly as possible without risking financial jeopardy in the
process? Let's talk about your seven-step, nine-to-five exit plan.
I'm Rachel Harrison-Sund and I help online entrepreneurs make more money so they
can live more life.
If that sounds like you go ahead and subscribe and hit the bell.
That way you can be notified every time I put out one of these videos,
which is every Monday. Also,
if you're in the beginning stages of getting an online business off the ground
and you're looking for some more help getting started creating content and then
leveraging that content into a profitable knowledge-based online business,
grab my free guide,
"The 4-Step "No Time to Waste" Online Business Start-Up Blueprint."
I have linked to that down in the description below.
This guide takes you through all of the steps of starting an online
knowledge-based business,
from idea generation all the way through to creating an offer and marketing it
to your audience.
This is the exact four-step framework that I used to launch my own digital
course business that brought in 60k during its first 14-day launch.
As romantic as it sounds,
packing in your day job before you have another source of consistent revenue
coming through the door isn't the right decision for most people.
Are there exceptions? Yes, sure, but for most people,
this just is simply not a risk worth taking.
Finding yourself suddenly without an income can make you desperate,
and most people make very stupid decisions when they're in a place of
desperation.
You need to be making smart decisions if you're serious about building a
sustainable business that's going to allow you to leave the nine-to-five for
good. Of course you are going to need to take some risks,
but these should be smart and calculated risks,
not risks that could potentially leave you destitute or sleeping on someone
else's couch for the foreseeable future. First things first,
you have to get your financial house in order.
First you want to assess where you are financially right now,
so you're going to determine your net worth and you're also going to take a look
at your monthly cashflow. Depending on your situation,
this might be very scary.
I remember always being absolutely terrified any time a bank statement came in
the mail.
Credit card statement--it just filled me with dread every time I was lifting the
flap of that envelope, so
I feel the pain in that regard,
but you're never going to get anywhere without becoming really deeply
intimate with your finances and this is the place to start.
Determine your net worth. If you've never done it before,
you just need to subtract your liabilities from your assets.
Assets include cash--checking and savings accounts.
Any type of investments, either registered or non-registered--in Canada,
TFSAs, RESPs, RRSPs; if you're in the States,
you've got Roth IRAs, 40ks. All of that stuff is an asset.
Assets are also property that you own, like cars, real estate,
and any other valuables as well.
Liabilities include any consumer debt you have--credit cards, mortgage,
and other loans.
You should recalculate your net worth at least once per quarter.
I actually like to do this every single month just so I always know exactly
where I am and see if I'm moving up or down or staying the same so that I can go
ahead and change tack if I have to. If your current situation is like mine was,
this could be an incredibly painful moment.
I remember when I first started tracking my net worth, it was minus $45,000.
That means that I had to earn $45,000 just so I could be worth
absolutely zero. So that really sucked but remember,
knowledge is power and you can't change what you can't see,
so this is a crucial step. Also, when you do start making progress,
it's very motivating to see that number start to tick up and up and up.
You also need to determine your cash flow.
This is just simply money in versus money out.
How much do you make a month and then how much do you spend?
You are going to need these numbers for the very next step.
After you have a good view of your current financial situation,
your next step is going to be to determine your monthly nut.
So your monthly nut is basically just the total of all of your monthly expenses.
Mortgage or rent, utilities, cable, streaming, cell phone,
car expenses, gas, insurance, childcare, subscriptions.
Anything that's a fixed monthly expense.
All of these expenses added together, this is your monthly nut,
This is the bare minimum amount that your business needs to be bringing in each
month in order just to cover your basic expenses.
And of course that's on top of your business's monthly operating expenses,
if you have any.
I recommend taking your monthly nut and then tacking on an extra 20% just
for spending money and any small emergencies that might come up.
So this adjusted number, your monthly nut plus the 20%,
is what you should be aiming to achieve before you walk away fully from your day
job. Without this,
you could be in real danger of being unable to pay for your basic needs until
your business gets off the ground. Next up,
start taking steps to eliminate your debt. Ideally,
you want to erase all of your debt, not including your mortgage,
while you have consistent income coming through the door. In other words,
your day job.
You really don't want to be in a position where you start defaulting on all of
your debts after you've quit your job and you're still kind of waiting to get
established out on your own.
You really want to try and get rid of those if you can.
The fastest way to do this if you've got multiple debt obligations is to knock
one debt out at a time, paying off the one with the highest interest rate first.
You're going to pay off that one with the highest interest rate first and then
continue to make minimum payments on all of your other debts.
When you've knocked off that biggest debt you're going to divert all the money
that you're putting towards that biggest debt and then you're going to take all
of that money and put it toward your debt with the second highest interest rate.
Again,
you're going to keep paying minimum payments on all of the other ones until that
second one, the second biggest debt,
is paid off and you're just going to keep going like that until you one by one
knock off all of your debt.
With each debt you knock off all that money gets diverted to the next one and
your payments end up getting bigger and bigger with each debt,
and then you end up paying them off faster and faster.
This is definitely the fastest way to pay off all of your debts.
If you're in a situation where paying off all of your debt would literally take
years,
so getting it all paid off before you quit your job isn't really feasible,
you can still address this in the next step by building a buffer.
A buffer is going to give you some runway so that you don't lose your shirt if
something doesn't go according to plan in your business for whatever reason.
Think of it like insurance,
but you actually get to keep the money if nothing ever actually goes wrong.
I suggest building a buffer of at least six months' worth of expenses.
So your monthly nut times six.
I also suggest building a business buffer as well.
Aim to have at least three months worth of business operating expenses in the
bank as well.
You don't want to dip into your personal savings if you have a few hiccups in
your business,
and you certainly don't want to go into any unnecessary credit card or loan debt
in your business because you just didn't have enough money to cover expenses for
a month or two.
Having these buffers can really help if you have a business where the revenue
can fluctuate dramatically from month to month.
When I was starting out with KDP,
my revenue would sometimes fluctuate by thousands of dollars month over month.
Six years later it's still pretty much the same with my digital course business.
It fluctuates quite a bit from month to month. Because of that uncertainty,
I like to have three months of operating expenses socked away in my business
savings account and I also actually have a year's worth of living expenses
socked away as well. That might be overkill for some;
that's just how I like to do it.
This goes a long way toward mitigating any uneasy feelings that you might have
about just the inherent uncertainty of becoming an entrepreneur.
Without having a buffer,
you could be just sitting there feeling constantly stressed out about how much
money you're going to be bringing in every month.
The whole idea behind having your own business and being your own boss is
freedom,
and it's really hard to feel free if you're just stressed out about money all
the time, so having a buffer will really help in that regard.
Now that you understand your financial situation it's time to make an actual
action plan to get out of that nine-to-five.
Start by giving yourself a deadline. This is your Freedom Day.
With all of the information you gathered in the last step,
you're going to create an estimate of how long it's going to take to pay off
your debt, build a buffer,
and get some consistent recurring revenue through the door.
Keep this date in plain view as motivation for continuing when things get tough,
because of course they always do. And, importantly,
don't worry if you have to adjust your date.
It actually took me two years longer than my original goal to be able to leave
my day job.
It sucked at the time--very disappointing--but it absolutely makes no difference
to me today because I'm here now. Giving yourself a date is important.
Giving yourself some leeway and not being upset if you end up needing a bit more
time, that's okay too,
but just get that date in there so that you've got something to work toward.
Next, create a schedule and stick to it.
Treat your business like a real job because it really is.
Come up with a real working schedule, including specific days and times.
What you don't want to do is just try and fit it in whenever you can,
because you're really not going to get anywhere doing it that way.
Even if you just have a few hours a week,
be consistent and stick to your schedule. Remember,
your business is real business, and you are the CEO.
Think about what you might do if you had an employee who kept showing up late
for work, or not even showing up for work at all.
Would that be acceptable to you?
I know that the reason that most of us want to have our own business and be our
own boss in the first place is to work when we want and where we want and how we
want, but if you don't have any discipline and you can't commit to your business
goals,
you're never going to be able to build a business that will allow you that
freedom in the first place.
You have to show up for yourself on a consistent basis.
Once you've got your schedule down and you're working on your business
regularly,
you're going to want to generate your monthly nut for at least three to six
consecutive months.
This is going to ensure that you're onto something sustainable and that at the
very least your business is making enough money to cover your basic expenses
plus a little bit of pocket change and some wiggle room for small emergencies.
When you're getting close to this point,
it means you are in the home stretch and you just need to be patient a little
while longer, but having this peace of mind really is so worth it.
All right, now's the time. Once you've built your buffer,
hopefully paid down most, if not all of your debt,
and you know you've been generating your monthly nut consistently for at least
three to six months, the only thing left to do is take that job and shove it.
Now, just a few more tips before we go. If it's possible,
you might want to consider transitioning a little bit more slowly out of your
job,
especially if you're someone who's a little bit more sensitive to uncertainty.
Once you're bringing in some money through your business,
is there a way that you could reduce your hours or maybe go part-time at your
day job so that you can spend even more time on your business and have that more
time to get things going even faster? If that's an option for you,
it's definitely worth having a conversation with your boss about what that might
look like.
Or could you quit your current job and then find a low-key part-time job to fill
up that earnings gap from your business while also giving yourself that extra
time to work on your business. Something to think about. Finally,
if you're really serious about permanently leaving the nine-to-five,
you've have to make it your number one priority outside of your health and the
basic needs of your immediate family. Try to get your family on board.
See if they can offer support and flexibility in accommodating your new
schedule. Don't be afraid to ask for this.
They're eventually going to be on the receiving end of a really happy and
fulfilled partner or parent who's running a lucrative business,
so they can help you get there. Also, you kind of have to get obsessed.
When I first made the nine-to-five escape plan a priority,
it was basically the only thing that I could ever think about.
I listened to podcasts, was connecting with like-minded people all the time,
and following those that have gone before me.
And I try to keep all negativity out of my life as well to just keep in that
positive frame of mind.
And of course know that there are going to be some trade offs.
When we're committed to one opportunity,
we kind have to shut the door on all other opportunities that come our way.
Otherwise,
we run the risk of spreading ourselves too thin and getting absolutely nowhere.
If you're looking for some more help on getting started creating content and
then leveraging that content into a profitable knowledge-based online business,
please don't forget to grab my free guide below,
called "The 4-Step "No Time to Waste" Online Business Start-Up Blueprint ."
This guide is going to take you through all of the steps of starting an online
knowledge-based business,
from idea generation all the way through to creating an offer and marketing it
to your audience. So definitely check that out. Also,
check out this video next to find out how I turned a hundred dollars into a
million dollars.
Check out my free online business-related Facebook group as well,
"Rachel Sandbox," that's also linked to down below. If you like this video,
please do hit that "Like" button, subscribe,
share with anyone you think might find it useful, and I'll see you next time.
Thank you so much for watching.