How do you know when it's time to say
goodbye to your boss and hello to
self-employment? If you've been dreaming
of quitting your 9 to 5 and giving your
full attention to your business, then
this video is for you.
I'm Jordana Randolph. I help product-based
businesses grow from being small
side hustles to full-time businesses to
being wildly successful. In this video
I'll share with you how to know when
it's time to take the leap full-time
into this crazy thing called
entrepreneurship.
A good goal is worn that is measurable
so in preparing and setting goals to
quit your nine to five job, it seems a
great question to ask is, "how much
product do Ii need to sell in order to
make up my current level of income?" When
you reach the point of selling X number
of products you'll know immediately that
it's time to quit your 9 to 5. But actually,
that isn't the best approach. Setting
your current level of income as your
goal, isn't really the way to go. If you
are living comfortably right now and
willing to make some sacrifices you may
be setting the bar too high by trying to
match your current level of income. On
the other hand, if money is tight you may
be setting the bar too low. When you
quit your 9 to 5 you are likely to lose
benefits like your retirement savings
and health insurance. So you're going to
need to make sure that those expenses
are getting covered by your business and
you possibly will be spending more money
on self-employment tax. The other thing
to consider is that as your business
grows you will have new expenses and
your profit margins may change. For
example, a product that once generated a
twenty percent profit margin for you may
drop the 15 percent when you start
spending more money on advertising to
reach your sales goals. So now that
income level that you're shooting for
needs to get adjusted. Profit margins,
expenses, scaling, taxes, health insurance,
retirement savings--there are so many
variables. It is overwhelming and I'm
just getting started.
Let's clear this all away and try a
simpler approach. It's just three steps.
Start by putting your focus on
consistently paying yourself. That means
moving money every pay period from your
business banking account to your personal
account.
You won't be spending this money so it's
good to make it a savings account. The
amount isn't so important when you first
start. It could be $10 every week
or $1,000 every month.
What's important is that you make paying
yourself a priority. An important side
note here. Unlike being employed that
payment you're depositing hasn't had
taxes taken out yet. Make sure you're
also setting money aside each month to
cover the taxes on that income. Next
calculate your monthly livable wage.
Include any benefits you need and may be
losing when you quit your 9 to 5. I have a
free worksheet below this video to help
you with your calculations. Third,
increase the amount you pay yourself
each pay period as your business can
afford. If you miscalculate and pay
yourself more than your business can
afford,
that's ok. This is a learning process as
you get to know the finances of your
business better. The money you've been
paying yourself should be sitting
untouched in your savings account and
can be reinvested in your business if
you really need it. Once you've able
to go through these three steps,
how do you know when it's time to make
the leap and quit your nine to five job?
Well it's when you have been able to
consistently pay yourself an amount
close to your livable wage, not touching
your savings, for at least one year. So
why do I say close to a livable wage and
not the actual livable wage? When your
business becomes your full-time job
you'll be investing much more time into
it. With that type of attention,
it's highly likely that your sales are
going to increase and you will be able
to reach your livable wage within a few
months. Why at least one year? All
businesses have cycles. Throughout the
months sales fluctuate by the season and
expenses vary like needing to
purchase inventory. If you're quitting
your job, you need to know that being
able to pay yourself a livable wage
isn't just
a fluke because you got some great PR
or a boost from the holidays. Also in
that year's time you will have built up
your savings by paying yourself. That
money can be used in the first few
months after quitting your job to make
up being a bit short of your livable
wage and as an emergency fund for
unexpected expenses. The decision to quit
your nine to five job is never one-size-fits-all.
Your business, your personal
finances and your comfort level with
risk is going to be different than any
other business owner. But know that you
will never be able to completely
eliminate all risk of entrepreneurship.
That risk/reward relationship is
entrepreneurship by definition. Now you
can reduce the risk by preparing
yourself through savings and by
consistently paying yourself, but
eventually, if it's something that you
really want, you will need to take that
leap into entrepreneurship.
That's it! Get in the habit of consistently paying
yourself and you will be well on your
way to quitting your nine to five job.
Now visualize this. It's the day after
you have quit your job. You wake up in
the morning and rather than rushing off
to go work for someone else, your
business awaits your full attention.
Share with us in the comments what that
very first day looks like for you.
Let's all reach this goal together. And
be sure to download my worksheet below
this video to help you calculate your
livable wage. And if you have friends
with product- based businesses who you
think would benefit from this video,
please pass it along to them. And for
more tips and resources for growing your
business,
join my mailing list and subscribe to my channel.
Are you yearning for connection
with friends who can relate to your
experiences of a product-based business
owner? Join my free Facebook group,
Community of Product Business Owners.
Learn from the experiences of the group,
grow through collaborations, encourage
each other on those tough days and celebrate
the big wins together. Plus every month
I host live classes to give you the
opportunity to ask questions specific to
your business. Join the community today at
JordanaRandolph.com