Making the decision to quit your job to pursue self-employment is a tough one. You are leaving the world of comfort and familiarity (and a steady paycheck), for a world full of unknowns.[Read more…] about 5 Things to Consider Before Taking the Leap into Self-Employment
Are you interested in buying rental property for additional income? I have been thinking about making a purchase like this for quite some time and am nearly ready to pull the trigger. For the past year or so, I have been researching and planning for a single-family home purchase. After all of my time and planning, I have an excellent handle on what it takes to find the right property that will earn me the best income immediately and for many years in the future.[Read more…] about How to Find Your Money-Making Rental Property
I was recently talking to a friend about her finances, and she told me her biggest worry is trying to get ahead. With bills, rising rent, and increasing costs at the grocery store, it can seem like a big challenge to build yourself a solid financial future.[Read more…] about The Challenges of Trying to Get Ahead
“I'm tired of all of these side hustles being on the side. I want to do my own thing full-time now.”
Note from Eric: This is a guest post from my very good friend Martin Dasko of Studenomics, where he covers topics ranging from finding the best renter's insurance to making money with Airbnb Experiences. Martin brings the experience of a seasoned side hustler who has worked for himself full-time for quite a few years. I enjoyed reading his thoughts on taking a side hustle full time, and I'm sure you will too!
Martin takes it from here:
After chasing side hustles you're eventually going to want to do your own thing. You're going to want to quit your job so that you can be the boss. I can relate to that. It's a struggle when you're stuck at a job you hate and so desperately want to quit to be working on something that's actually yours where you make the majority of the money. Let's look at how you can turn your side hustle into your main hustle. Don't worry I won't be selling you the dream here. This is a practical guide for how to quit your job to focus on your side business. Let's go all in…
Disclaimed: Quitting your job isn't easy. It's tough to replace that income. It took you many years of college/training to earn your current position and salary. You had to work your way up. You had to hustle and put the time in. It's not that easy to just call it quits. This means that you shouldn't expect to go full-time with your side hustle after one profitable weekend. You shouldn't expect to make a full-time income from a new business idea right away. Too many people sell the dream on social media when it comes to starting a profitable business. You know what I'm talking about…
- “Make passive income from the beach.”
- “Start a business and never work a day in your life.”
- “See how this young couple lives in a van and makes ten million dollars a day.”
You get the point. It's annoying. It's frustrating. It makes you feel like giving up before you even start because you'll never live up to that hype. I want you to forget about all of the success stories for now, furthermore, I want you to only think about yourself. This is your story. You can't expect to start the next Facebook. You can however, quit your job to work on your own business.
What do you need before you quit your job for a side hustle to become your main gig?
MONEY. You need money if you want to quit your job. Your business has to be bringing in money and equally important you need to have savings in the bank. Next you need an income from your side hustle with a plan to make even more money to replace your current income.
Here's a list of things for example, that you don't need to quit your job:
- Crappy motivational quotes.
- A course on courses.
- Another Gary Vee podcast loaded up.
- Another dozen books on entrepreneurship to read.
Here's a list of what you actually need to quit your job:
- Money coming in from your side hustle.
- Money saved up in the bank to cover your expenses just in case.
- A plan to bring in more money so that you replace your income.
- A reduction in expenses so that you can survive lean times.
How much money do you need to quit your job? You have to save money so that you can cover your expenses for at least 6 months. When you work for yourself anything can happen. You can go through some lean times. Savings is what will help you get through this. You need money in the bank to survive the issues that can happen as an entrepreneur (losing a client overnight or Google wiping out your traffic with one update). There will be times where you go months without bringing any money in. Then there will be periods where you feel rich because you have money coming in from all angles. This then leads us to an important question.
What if your side hustle isn't making any real money yet? Should you quit your job?
“But Martin, I have such a good idea. I just need to quit my job so that I can focus on it.” I get this all of the time. It feels like your day job is holding you back so you want to quit so that you can finally get rich with that new side business you've been working on. Here are two important aspects to keep in mind about going full-time with a side hustle…
1. You have to earn your freedom. There's no other way around this. You can't just quit your job because you hate your boss or because you want to call yourself the CEO in your social media profiles. Freedom has to be earned. You have to start making money with your side hustle. Your finances must be a priority.
2. You have to wait until your side hustle makes more money to be 100% on your own. You can find part-time work/freelance work. Quitting your job won't be glamorous for the first little while. You're going to have to serve drinks or work a part-time gig on the weekends; moreover, you're going to have to do something to bring some cash in.
“A good plan, violently executed now is better than a perfect plan tomorrow.” — George Patton
How do you make the transition to full-time?
The goal is to ease into your transition of going from employee to being self-employed. You don't want to jump all in and then become frustrated when you have to go looking for work again in 4 months.
You have to try to test the waters as you work on your business ventures.
Have you tried to work on your own full-time? It's not easy. More free time doesn't mean that you're going to get more work done. I urge you to use a week of vacation to see what it's really like to work for yourself. You may even discover that you don't mind keeping your side business on the side.
Find ways to make more money.
We have to look into ways to make more money. There's no way around this. Here are ways to make more money:
- Add a product.
- Consider expanding your side hustle.
- Look for more clients.
- Switch up your offering.
- Upgrade your skills so that you can charge more money.
You have to be thinking of ways to make more money.
Save every penny that you can before you quit your job.
It's a huge privilege to be able to quit a job so that you can do what you love. You have to cut back on everything that you don't need as you're trying to quit your job. The more money that you save, the more money that you have to put towards debt and savings so that you can become free from your job. You're going to have to save like mad and get a little creative so that you have a financial cushion.
You set a deadline.
The late nights and early mornings will eventually get to you. It's important that you set a deadline for when you want to quit your job. What's your deadline? Set it and write it done everywhere. Announce it publicly to hold yourself accountable.
Be merciless about making this happen.
It's easy to find excuses or to let distractions get in the way. You can't let that happen. You have to be 100% ruthless. What does this mean?
- Saying no to weekend plans.
- Turning off the game to work on that proposal.
- Spend some money on investing into your business.
- Save, save, and then save some more.
Yes, I know that this doesn't sound like fun. I'm not here to lecture you. I just want you to know that quitting your job to do something that you love can be the most rewarding thing ever.
“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.” — Steve Jobs
Can't I just quit my job like they do in the movies?
Sure. You can quit your job without a plan… If you want to be broke and miserable. However, telling someone to quit a job without an income is a recipe for disaster. Money is never an object in the movies. In real life, you have bills. I don't want you to have to move back with your parents or to have no money. Working for yourself is supposed to be fun, not something that stresses you out and ruins your life.
The final words on quitting your job…
The idea of quitting your job is something that I've been writing about for years. I've helped readers quit their jobs and I've seen friends go all-in with their business ventures. If you're in the trenches right now, then keep on going. Here are a few final practical tips for how to quit your job to focus on your side hustle:
- Study those who have done it already. You don't have to guess. There are hundreds of entrepreneurs sharing their journeys on social media.
- Pay for coaching if you have to. You don't have to do this alone.
- Find a practical business model that has a proven track record of bringing money in. No pyramid schemes and no selling teas.
For some quick motivation, see how Eric quit his job to become a freelance writer. Eric shares practical advice for how he quit his corporate gig to be the boss.
“Having a vision for what you want is not enough. Vision without execution is hallucination.” — Thomas A. Edison
Editor's note: This is a guest post from our friends over at Money Crashers, and written by Tyrone DeMarco. I love side hustles and starting your own business, so this is a great read for anyone looking to take their side hustle idea to the next level.
Small business ownership has its perks: You get to be your own boss, work when you want, and control your own destiny. But business ownership isn't for everybody, nor is it always the best option. It can be a huge financial risk—one that requires a lot of time and mental commitment. In fact, timing and readiness are going to be the determining factors of whether your business succeeds or crashes. After all, the latter is a reality for millions.
Consider this: According to the Small Business Administration (SBA), around two-thirds of businesses that employ workers survive past the two-year mark, while only half make it to at least five years. The reasons for the flameouts vary but failing to understand the risk is a big part of it. From measuring the financial challenges, hiring the right personnel, finding the right balance between growth and stability, or even just finding the right location, small and young businesses owners often don't realize how huge of an undertaking making their business run smoothly actually is.
Owning a business can be downright scary, but also extremely rewarding. While you'll never know completely when you are ready, there are telltale signs it just may be your time to make the leap.
How to Know You Are Ready to Start Your Own Business
- There's Great Passion Inside You
Anyone can start a business granted they have the capital to get it off the ground. But the ones that are truly successful are those that have a passion for the product or service they are hawking, not just trying to get their business off the ground because they can make money that way.
Take organic food for example. The entrepreneur who has a love of natural foods is going to enjoy learning and sharing that knowledge with customers. The one who is just jumping on a trend won't be as convincing when a potential customer walks through the door. If you don't care about the underlying products or services your business offers, other than their money-generating ability, you are less likely to invest the time to make your business grow and get established.
Truly loving what you do will ensure that business owners won't turn into the equivalent of taking any old job with a day-to-day toil. Starting your business with passion and no plan can sometimes be more valuable than having capital and a plan, but no passion.
- You Have the Time for the Commitment
Getting a business up and running is tough enough. But then there's the work of growing your baby, which requires blood, sweat, and tears. If the thought of pouring countless hours into your endeavor leaves you wishing you were getting a tooth pulled, then business ownership probably isn't for you. But if knowing you will be breathing, eating, and sleeping your small business gets you pumped up, that's a surefire sign it's time to execute.
Successful entrepreneurs bring all sorts of things to the table, but a shared characteristic is commitment. Without it, you won't be giving your business its best chance of success. As a result, your personal circumstances can be a good predictor of your readiness to go it alone. If things change in your life—such as a new addition to the family or an impending divorce—it's probably not the best time to test your business acumen and idea. A baby requires a lot of attention, not to mention creates sleep deprivation. Although different, a divorce is also a big distraction.
If there is upheaval in your life, you may want to hold off launching your new business. But if everything is smooth sailing and you are ready to give it your all, then it could be the best time to pull the trigger.
- You've Been Thinking About It for a While
Giving up your career to start your own business isn't something that you decide overnight because you're angry with your boss or unfulfilled at your job. Many entrepreneurs worked for someone else, in lots of instances for years, all the while plotting and planning before they made the leap—and sometimes kept working for someone else even after launching their business. It's not like age is a barrier or a stigma anymore.
The Great Recession of 2008-2009 changed the makeup of small business owners and entrepreneurs, with scores of older individuals using downsizing as the impetus to branch out on their own. Consider this: according to the Kauffman Foundation, a non-profit focused on entrepreneurship, the percentage of entrepreneurs aged 55 to 64 jumped to 25.8 percent in 2015 from 14.8 percent since 1997.
Although age doesn't determine success, time considering an endeavor can. The last thing you want to do is launch a business because you feel forced to for whatever reason. Lots of people will take the leap solely because they hate their job, wrongly assuming that leaving will fix everything. If you fall into that category, there's a high likelihood you'll still be unsatisfied and quickly resent it, which is a recipe for disaster for any business owner. Leaving your problems behind doesn't resolve them.
- You Can Do It Better
For some individuals, the light bulb to branch out on their own comes from watching the mistakes of their boss or upper executives in an organization. Maybe it's how they interact with customers that they are doing all wrong, or perhaps it's the lack of openness they have to what could be game-changing ideas that have you frustrated. It could be a cultural thing or watching corporate waste in action that's led you to dream about how you would do it better.
Heck, it's not unheard of for an employee to quit a job only to resurface a few months later as a competitor, so why can't you? Questioning the abilities of your boss in and of itself isn't enough of a reason to start your own endeavor, but if you find yourself repeatedly about how you can do it better than your boss or management, then it's a big sign it's time to show them.
Small businesses are the backbone of this economy, employing millions of people—or close to half of the private workforce—according to the SBA. But just because owning your own business puts you in control doesn't mean it's right for you. There has to be a passion, a willingness to commit, a business sense, and confidence in your ability to make what will undoubtedly make a success out of a struggle.
Without it all, pursuing a career within an organization may be the better action.
If anyone has first-hand experience with making the wrong decision when quitting his job and launching his business, Tyrone DeMarco is it. He worked for Corporate America for a decade before finding himself so resentful of his workplace that he ventured out on his own, only to fail miserably when launching his first business. Since then, he’s readjusted his priorities and is a very successful real estate investor, finding the best fixer-uppers around the United States.
This post was originally published on March 13, 2018, and updated on March 31, 2022.
I used to enjoy doing our taxes. I know, I’m a dork, but I genuinely liked sitting down at the end of the year to see how everything shook out for the previous 12 months. We didn’t have anything too extravagant going on so it was fairly straightforward.
That all changed once my wife and I stopped working for our employers and went to work for ourselves. Taxes became even more complex when we saw our business take off. I know there is some debate as to whether or not you should pay someone to do your taxes, but for us, it made sense to go that route. That, however, does not let us off the hook in terms of tax preparation. With that in mind, I thought I’d share some of my tax tips to help out if you’re self-employed.[Read more…] about 3 Simple Tax Tips for Self-Employed People