Self-employment Support?

[fidgiegirl]

So I have been thinking about above whine-fest and I am going to recommit to doing one thing a night toward self-employment. Whether that is spending 15 min. researching a question online, refining some aspect of my blog SEO or marketing, writing up a post, organizing finances, laying out a new idea, working on my network, executing plans . . . something. Perhaps I'll post here, or maybe over in one of my blogs. Or maybe just on a calendar at our house.

Is it worth doing some visioning around this? I feel like I have no concrete goal! When I was in San Diego over spring break, it occurred to me that my friend, who I very much admire, always had the next goal in mind ever since high school. She went to community college, knowing that it would lead to a four year university program in sciences. Then she enrolled in the Navy, knowing the money she would get for schooling would carry her debt free out of undergrad and into a graduate degree. She mostly completed one grad degree while she was in the service and is using GI Bill to work on her second. Even though she's near the end she has a very concrete plan of how the actions she is taking now will get her into the position she wants later. I used to be that way but now feel kind of floaty la la la. Not saying I have to be driven or never satisfied or enjoying the present, but saying if I want to be self-employed so badly then why do I keep just conceptualizing it as a cutesy little side thing? I am a smart person - how can I envision my undertakings as a robust, sustaining business?

I was keeping a personal journal kind of blog a few years ago and wrote this on May 23, 2011:

His most powerful question to us was what is our goal? And I think it’s something very important that we need to set. I hadn’t thought of this, but it makes so much sense I can’t even believe it didn’t cross our minds. What is our goal?

[ApatheticNoMore]

To the how much I would like to make I thought: enough to survive, maybe save a little bit, maybe a little play money. It could be considerably less than I earn now (though I earn good money) Remember I was positing a 30 hour a week job, so I'd expect and gladly take much less than I earn now, my thoughts to "what would I like to make" was more "how low can I go" and still get by.

I have to admit I don't really have starting a business fantasies (wrong thread ). I have *different* employment fantasies. Like what if I had gone or went (no easy switch) into non-profit work, or what if my work made a difference to anything beyond a bottom line etc. etc..

[fidgiegirl]

LiS, we must have been doing a simul-post. And I am never tired of your ramblings. And yes, I do fidget a lot.

"Ask for what you want, no matter how impractical or far-fetched it may seem."

You know, when I first read YMOYL and decided that I WOULD get out of debt, people around me pooh-poohed it. They tried to convince me it was part of life, and just to stuff it away and try to be happy with it. But I wasn't. It was a weight on me. And I stuck with my guns, and within four years I was debt free. $30K in four years, and during two of those I was making not so very much. I didn't know how long it would take but I plugged away at it and it is quite amazing what focus will result in.

I was just telling someone at work yesterday that I think we have not been big enough dreamers there, either. When we DID commit to a single technology initiative, even though we thought it would take years to realize it, the community's support for it snowballed and we reached our equipment procurement goal within 3 years. That was due to focus.

I also really look forward to getting my hands on the Jaeger book you recommended. I feel like that's where I'm at - drudgery! At least my job isn't a HSSJ - like I said, lots of good things going on - but still . . .

I also think spring will help matters!!!

[fidgiegirl]

Oh geez, totally dominating this thread tonight.

I am inspired and ready to voice our goal:

Earn enough business income that both Bryce and I can leave outside employment if we choose.

It's a big goal, and it will involve many baby steps. I feel excited. Now to maintain it. . .

[SteveinMN]

I think Life_Is_Simple's "how much do you want to work?" thread has revealed something for me: I couldn't even bring myself to respond. If I can't state my goal, how will I reach it? The harder part of what she posed was the "how much do you want to make doing it?" part of her question. I don't know! Lots! More than I make now! But HOW much? Or is it even important? I mean, we moved so I can't make nothing, but would I have to make what I make now? Or is it a case of visualization - if I think I will only make $X.00, well, then, I'll only make $X.00!

In Barbara Winter's Making a Living Without a Job, she talks about sometimes full employment being the biggest impediment to getting started in self-employment. I'm starting to really appreciate that sentiment, so to speak . . .

Well, sorry, it was kind of "stream of consciousness." Where are others at with this?

Well, you kind of know where I am...

When I had to get out of my HSSJ, I chose something that I enjoyed doing (photography) in an area (real estate) that I thought needed my services. I knew it was not a unique widget to offer the world. I knew I lack the formal qualifications to do it -- I don't have a degree in fine art nor have I ever sold real estate. I knew I was not going to replace my old job's income. But we ran the numbers. I knew we could make it on DW's income and "something" that I earned, whatever that was and whenever I started earning it. We were prepared for several months with expenses and not much income. Long story short, maybe the answer to "how much do you want to make" can be nebulous -- "something more than expenses". It's not limiting and it's not discouraging when it doesn't happen right away.

The interesting thing about not working at a HSSJ for 45-50 hours a week is that I had time to examine and reduce our cost structure. In my mind, lowering the amount of money we spent each month was as good as making money and then paying bigger bills with it. So the "something" I needed to make became even smaller. And that opened up some opportunities -- or at least made exising opportunities seem more possible.

You and I have discussed (in this thread, I think) that I kind of let things sit for several months. I think I had to do that, partially because I wanted to address our expenses and partially because I was just so done. Finally, after almost a year, I feel creative and energized enough to take on the business again. It will be a mix of fine-art photography and some real estate. And now that I know it's not going to be 50+ hours a week and that whatever I make at it is good, the goal may be a bit blurry but the path is clear.

[Zoebird]

A book that really changed my life was The Two Income Trap. This talked about making sure that your fixed expenses were on one income. Then, secondary income is just there for support in case something happens to the primary income.

So, my husband and I set about on a 3 year process to get onto one income. It was great! We really started to understand our finances better!

Then, we learned about how our living expenses should go. There are lots of different formulas, but we decided to just "observe" how we lived on that 1 income over several months, and as such, we were able to discern what percentages of our income went where, and then how to decrease those expenses as best we could. Thus, I think something like 50% of our income was fixed expenses (home, debt payments, savings of various kinds), and 30% were floating (food costs, fuel costs, etc), and the remaining 30% went into entertainment/clothing/extra food/travel. And that's pretty high, but it allowed us to live comfortably/well.

This gave us a real foundation for understanding how to make adjustments to our way of life and thought processes in terms of spending so that we could adapt to different kinds of financial conditions.

And then another thing came to our attention: we were never going to get ahead with what we were doing. My business, as it was formed at that time, was never going to create a good enough income on it's own. It needed a different formation. And then my husband's work -- well, he did have options to move towards management, but to be honest, he preferred the basic work and it wasn't really in the field he wanted to be in anyway. So, if he didn't move up into managmeent, his job would cap (and it was about 1$10k away from capping), and then it would just be COL after that. This meant, of course, that we wouldn't ever reeally meet any of our financial goals, and that ultimately, we wouldn't be too cheery about it.

That's when we decided to take the risk -- start the business because I knew that I could make it work AND make it profitable for us. And not just "enough for us so that we support ourselves at a basic level" -- but truly a big, successful business. But, our first goal was to get to sustainability (sustaining the business and ourselves), and our second goal financially was to get to our income level (DH's) when we left the US. We are just about there now.

Expenses are higher here, which means that more of our income goes to COL and less to savings/paying down the SL debt, etc -- but because we did this frugality work before starting the business, it's been easier for us to do that and still "live well."

Our next goal is to get into the higher tax bracket and see what the effect is. We have a financial planner who works with our accountant who is helping us to figure it out, because it may mean that we go a bit under our current earnings in terms of "take home after taxes" -- which means a less going to savings/SL debt for a bit -- and then seeing where we need to be to break through that impact and to a comfortable income.

By this point, we figure that SL debt will be paid off (and the financial planner thinks it's do-able). From there, it's just growth from tax bracket to tax bracket. I know that seems a bit of a weird way to look at it, but basically NZ has three tax brackets, so the goal is to get to the top one there. And then the US would have it's tax bracket -- which means we need to jump beyond both of these so that we have the take home of the bottom line of both tax brackets (i don't know if that sentence makes sense).

But, I do know that it's possible because of how it's happening step by step.

And that's just the financial goals, not the other goals that are. . . how to reach those financial goals.

But yes. Having goals helps. And an impetus.

We know how we want to live. We know that we need a certain level of income to achieve that lifestyle. Therefore, we created a way to get that income. And now we're working to it.

It's possible.

[iris lilies]

...Ramit Sethi's methods seem spot on to me. For any small business idea, one of your first goals should be to get 3 paying customers. If you can find people who will pay for it within a relatively short period of time, chances are it might be a workable long-term business. If you can't find paying customers then it is pretty much dead in the water. And you should know that before you spend X months or Y years of your life trying to develop your great idea. Might not apply to every situation, but seems to be very straightforward and practical advice.

This sound extremely practical and right. That's your market research right there--plunge in and do the work, do it for 3 people, see how long it took to get them as customers, see how the work went and how your estimating skills are. Didya make any money?

[Zoebird]

and, you might actually work out the kinks by doing things low cost or gratis.

one of my friend's friends is a free lance writer. she's looking to start a new process where she creates and curates content for small business blogs/social marketing.

i am, personally, very interested in this as a service. I know what kind of content that I want, but don't have any time to write it. I have a long list of ideas and also if you just sit around and chat with me a bit, you'll discover that there are lots of other areas to explore that -- honestly -- i just don't have time to do. Also, just finding content in general -- not something I want to spend a lot of time on (ie, funny/uplifting videos or whatever to post on FB).

her first foray is to develop the timelines that it takes. understanding the blog's/business's marketing tone, audience, and so on. How long does it take to curate and/or produce and publish content? How much is that time worth?

From there, she wants to create packages (one blog per week plus X facebook per week; two blogs plus Y facebook, plus D tweets) and the acquire clients. From there, she wants to train other writers and subcontract them as she takes on more clients.

Once she understands the time-rhythms of the business, she can understand how many clients she can take on (and therefore the overall value of her time), and then the number of clients she can get per person whom she sub-contracts to (and the value of her time managing the sub contracting and client interface plus then the amount she needs to pay to the sub contractor).

Smart, really. There are lots and lots of us. There are lots of us who wouldn't pay jack-crap for this service, but there are another group of us who would love to have this service if it was affordable and on-brand.

[fidgiegirl]

And now that I know it's not going to be 50+ hours a week and that whatever I make at it is good, the goal may be a bit blurry but the path is clear.

Such a good feeling!! Or, at least a better one than immediately after you left HSSJ!

[fidgiegirl]

start the business because I knew that I could make it work AND make it profitable for us.

How did you "know?" Do you mean in the self-confidence sense, or in the market research sense?

I like the one income premise. It's somewhat similar to our focus on frugality and reducing expenses, but this gives it a whole new twist. A huge part of being able to reach the goal of "earn enough business income that both Bryce and Kelli can leave outside employment if they choose" is reducing EXPENSES enough that the income doesn't need to be as much. Just like Steve said, too!

I wonder why this particular goal that I've set, even though it's similar, feels so different from a goal like becoming FI3? It's essentially the same thing, although it acknowledges that we'll still have to be earning money through work, not simply through investments. It's just that the work will be through business(es) rather than through outside employment. Perhaps feels more doable? More real? More of what we want our lives to look like, anyway? Interesting.