Charting Your Voyage Out of the Rat Race
It’s all in the finances.
If you want to escape from your day job, all it really takes is an ability to earn more than you can reasonably expect to live on per month. Part of making “The Great Office Escape” is having an understanding of your financial picture, and in order to do this, you need to first figure out your magic financial number.
What is this number for you?
Simple. This number is the after-tax dollar amount you need to earn per month in order to feel comfortable quitting your day job.
Before you just scribble down a number in your head, give this some real thought. Sure, you might be able to get by on $1,700 a month, but will you be able to put money away for savings? What about unexpected expenses? Pick a number that makes you feel that if you earned that corresponding amount monthly for the rest of your life (ignoring inflation) you would feel relatively secure. And when I say relatively secure, don’t factor in potential divorces, volcanic eruptions or catastrophic national financial collapses. Think in terms of today’s scenario, but project it into the future.
Got you number? Good.
Making the Journey
Start small. A business takes time to build, and good business ideas are a dime a dozen. No… actually, good business ideas are a penny per thousand.
The good news is just because your idea has been tried before (a thousand times) doesn’t mean it will not be wildly successful! In the end, it’s far more important to work consistently, develop a good plan and not give up.
Let’s say that you have decided that $2,000 is your magic number. Let’s also say that you have gotten very good at e-commerce (from your day job as an entry-level web designer) and have developed a few good leads through your day job. But it seems like such a lofty goal, reaching $2,000 a month in revenue from clients outside your job and working from home. This is why it’s important to start small.
The First Few Months
You shouldn’t plan on booming overnight success, or even booming success in the first year, especially if you also have a full-time job. There just simply isn’t enough time to make it big right away. But, a little bit can eventually go a long way. The chart on the left represents your financial picture in the next four months after you have your first regular client. It is a graphical representation of your “Great Office Escape.” The orange line is your actual monthly revenue and the purple line at the top is your goal.
Sure seems like a long way away, doesn’t it?
Your first client is happy with your work, however, and is more than willing to pay you $200-$300 a month to keep his website and net presence strong. By June, 2010, he refers you to a man who owns a small fishing business (hence the spike in income in July.) The fishing business goes under (no pun intended, I swear!) in late June, so it’s back to your original client only.
These rises and falls in projects and available work when you are starting a business are quite common. You should get used to them.
Things Looking Up
In September you get a referral from the same first client to a small marketing firm in the UK. They decide to hire you on a contract basis, and soon you are getting a lot more work!
In the coming months your workload has increased, but the consistent work from the marketing firm in the UK plus your day job is giving you more work than you know what to do with. Your Saturdays are booked, your girlfriend threatens to leave you and your dog doesn’t get fed.
There is only one option.
One cold, rainy November night in late 2010 you quit your day job. Cold turkey. You have made The Great Office Escape. It was a risk, however, as you now have to rely on your new e-commerce business! Your income immediately drops in November (as evidenced by the chart) but as luck would have it, your company in the UK refers you to another marketing firm in Portland, Oregon. You now have two sources of very steady work, plus many other clients on the side.
The chart below shows your financial progress into 2011. Incredibly, you are making more than your goal by the end of the year, and making more than you did in your day job by April, 2011!
It can be done.
Sometimes it takes a lot longer than this to be successful. Many small businesses (and solopreneur ventures) take years before they provide enough income to escape the rat race. The rewards are well worth it, though.
When I started my web development business two years ago I was making about $200 a month. Now I am earning more than I did in my last 9-to-5 job and have some very steady clients after only a couple of years in the business. If I can do it, so can you!
The 4 Hour Workweek: Is Tim Ferriss a Brilliant Scammer?August 20th, 2010
Charting Your Voyage Out of the Rat RaceMay 12th, 2010
How to Find Legitimate Telecommuting JobsMarch 31st, 2010
Untying Your Work from Your IncomeFebruary 15th, 2010
Escaping the Office During a RecessionJanuary 15th, 2009