Taught by Tina @hellotinamay
If you’ve been dreaming of quitting your 9-to-5 and starting your own business, this workshop is for you! We’re going to look at 5th things to consider to plan your exit strategy from 9-to-5 to running your own business and to feel confident taking that leap.
I would try to calculate three figures here, the first being your bare minimum expenses, which is almost your ‘worst case scenario’ what’s the minimum that you could get by on per month - depending on what you consider essential this probably doesn’t include things like fancy dinners or sunset cocktails. Sit down and calculate, if you had no new income coming in today, what does it cost you at a minimum just to live and pay all your bills.
The next is to calculate your comfortable monthly living expenses, how much would do you need to maintain a comfortable lifestyle - most people don’t want to stay living at bare minimum for any extended period of time, so this is the main calculation we’ll use in the next steps.
And then finally, let’s calculate your goal income in 12 months, what would you like to be earning per month - accounting for covering your comfortable living expenses + having extra for savings or other investments.
From this you’re going to come up with 3 monthly figures, and for the simplicity of maths we’re going to say that it’s $2k, $4k and $6k per month.
These numbers will vary wildly of course from person to person, based on your circumstances and where you’re living - they aren’t meant to be any indication of what your costs should be, simply random figures to demonstrate with. If you’re living at home, or don’t have to personally cover any major expenses like rent or a mortgage, or you’re living in a location with a reasonably low cost of living, that’s going to be a different calculation to if you’re living in a city like New York supporting your whole family.
Your runway is a calculation of how much time your business has until it runs out of money. It’s essentially a calculation of how much money you have saved up that can cover your costs - your safety net. I don’t know the history of the term, by I always think of a plane on a runway, and that’s how much time you have before you crash.
To go back to our previous calculations, let’s assume first that we have zero income coming in and we have $12,000 in savings.
That means that we have 6 months of runway under our most conservative, bare-essentials budget or 3 months under our comfortable scenario.
Or if you had $50,000 in savings, then you would have 2 years of runway under our most conservative, bare-essentials budget or 12 months under our comfortable scenario.
How much runway you need, likely depends on your risk tolerance and your worst case scenario - what happens if you hit the end of the runway? Would you move back in with your parents? Get another job? Default on your mortgage? The more responsibilities you have the longer runway you’re likely going to want to be comfortable quitting your job.
The other factor that influences your runway is your current income - the numbers above assume that you’re quitting today with no income at all, but another common scenario is that you launch your business first as a side hustle and then quit your job when you’re already bringing in some paying clients.
Let’s say you’ve already got 1x retainer client paying your $1500 per month for social media management, or you’re booking on average 3x photography clients worth $500 each month. Then you can calculate your runway again - even if you didn’t grow at all and just kept earning the same amount you were earning as a side hustle (an unlikely scenario but worth exploring) then how long until you ran out of money. Now your 12,000 in savings would last 2 years on an essential budget of $2k per month and 5 months on your comfortable budget.
Crunching these numbers I find really helpful in making a solid plan and knowing when you’re ready to take the leap, and I think having a runway in mind is sometimes the fire you need to be able to really stay motivated to make your business succeed. If I look at the biggest periods of growth of my business, it’s typically been when I feel like my back is against the wall and I don’t have any other option than to make it happen.
Your runway isn’t the plan for how your business is going to go, it’s the safety-net that’s there to catch you if things aren’t going to pan.
So the next step is to look at what will it take to really make this succeed - to hit not just your comfortable income, but move into your goal income. Breaking it down into actionable milestones that you want to hit is a great way to give you the structure to succeed, so that’s the next step on my 9-to-5 exit plan.
I like to break this down into a couple of different scenarios so that you have options of different ways to meet your goals. Depending on where you live, and the tax structure & tax-free threshold you’ll need to factor taxes in as well - we have a more detailed calculator that we use for in-depth planning for our students, but for now I want to keep it simple for you.
Let’s do three examples:
Let’s look at a different example, where you’re already booking clients but want to figure out how much you need to charge to meet your goals.
Let’s say you only want to book 4x half-days of photoshoots per week (because you value your time and you don’t want to burn out) so you might shoot in the morning and then edit in the afternoon, and still have a full day per week to work on marketing & admin. Then we can work backwards and figure out how much you have to make per project in order to meet your goals.
4x shoots per week is 16x photoshoots per month so we just divide the goal income by the number of shoots and we can figure out how much we need to charge to make it viable.
And once you’ve started these calculations then you can keep experimenting with different variables that work for you. So if you changed your mind and you only wanted to do half as many photoshoots per month, you could just adjust the figures and see that you can still hit your goal if you charge $700 per shoot.
I think one of the reasons this calculation is so helpful is that it breaks down an abstract goal into tangible steps and it gives you something concrete to research - if you know you need to earn $700 per shoot, you could do some research and see what’s viable for your industry and niche and what you’ll likely find is that it’s not only viable, it’s actually at the low end of what many photographers are charging.
A final example, let’s look at web development. This is an area where the pricing isn’t always as straight forward, so let’s assume that we have two project structures that we’re making money from - the first is full custom side development, big projects that might take 1 month on average and cost $2.5 - 10k on average. And then we have web dev intensive, short burst projects that can be completed in as little as a week, where the goal is to help small businesses, or others who need something fast, affordable and high-quality where you can earn $500 - $2000.
In this scenario, maybe you make your major projects your ‘bread & butter projects’ the ones that you rely on to cover your expenses, and you know that you can take on 1-2 of those at a time.
So you need 1x of these websites to cover $2k, 2x to cover $4k and 3x to cover 6k. But if you wanted to just cover your comfortable living expenses with the major project, and then wanted to scale your income with the web dev intensives then you could factor in say 1x $4k full website project per month + 2x mini web-dev intensives at $1k as another way of meeting your goal.
And if you were offering a retainer package for ongoing website maintenance & support, you can calculate how that will grow over time too. Let’s say you are charging $100 per month for an on-demand tech support & security & backups package and you plan to have 1x client per month… after 12 months you’ve not got 12x clients so $1200 per month in retainer income that can add to the rest of your calculation.
Now you know what it will take to pursue your dreams, but it’s also worth remembering what it costs you not to.
In the early stages it’s easy to feel like you’re sacrificing a lot to pursue your dreams, but ultimately you’re usually sacrificing more to stay. Think about how quickly the past few years have flown past, and then imagine how you would feel 3 years from now if you weren’t brave enough to pursue what’s most important to you. Because while you can always earn more money, you can never get back that time.
Time is your most scarce resource, it’s the most precious asset that you have and yet it’s the one that people are often the most reckless with. I’m betting if you had tracked how you spent your time for the past 5 years and then compared that against the things that are most important to you, that bring you the most meaning, the most joy, the most excitement that you would probably see a lot of room for improvement. You only get one life, one chance to try new things, challenge yourself, explore the world, spend time with the people you care about. So if you’re feeling stuck and know deep down that the 9-to-5 that you’re giving 2500+ hours per year isn’t the right thing for you anymore, then you owe it to yourself to do everything you can to change that.
The final consideration I think you should have in creating your 9-to-5 exit plan is understanding how you’re going to support the most important asset your business has… you.
As an entrepeneur the most important factor in your business is you - are you focused, creative, motivated and supported? Or are you stressed out, distracted and on the verge of burning out?
If you had a piece of machinery that was capable of generation $100,000 per year, or more, you would make it a priority to ensure that you looked after it - regular checkups, maintenance as needed, only the best fuel.
So often when starting their own business, entrepreneurs put themselves last. And while of course sacrifices have to be made in building your business, they can’t come at the expense of your physical, mental or emotional health — because when you can’t perform at your peak, I promise you that has a much more significant impact on your business than when you take a 30 minute break, or go to bed a little earlier.
Approaching this strategically, I think a key part of your 9-to-5 exit strategy should include a support network and plan for you. If you’re leaving an office environment and working solo, make a plan for getting out of the house. If you don’t yet have a community of peers who can cheer you on through your wins and support you through your challenges, then finding that or joining a community or mastermind should be just as essential as knowing that you’ve got your financial runway covered. Being your own boss is incredible, but everything that’s new and worth fighting for comes with challenges, and having a good support network is one of the biggest factors I’ve seen in succeeding with running your own business. It’s ok if your family & friends aren’t supportive, so long as you go and build connections with people who do support your dreams because often that’s all you need to have the motivation to make it happen.
I want to leave you with one final piece of advice. As you’re thinking about starting your own business, or going all-in and pursuing it full time you’re going to come up against a lot of doubts. Your own doubts and fears, the fears of those around you. Expect that, and be prepared for it.
When you think to yourself ‘who am I to think that I could do this?’ frame it - why shouldn’t it be you? if you’re mind is spinning wondering what if you fail, remind yourself - but what if you succeed? If you’re facing obstacles that feel insurmountable, remember that most of the people you admire faced insurmountable challenges too, they probably felt just as much fear and doubt as you feel right now but they faced that fear head on and chose to believe in themselves.
Turn I’m not confident enough to do this, to I’m not confident enough YET and then make it a priority to build your confidence.
Turn don’t know how to do this, into I don’t know how yet and then make it a priority to learn those skills.
Turn I’m not good enough at this to succeed, into I’m not good enough yet, and then get 1% better every day until you are.
You have everything you need inside of you to succeed. And one day you’re going to look back on this moment when you decided to make pursue a life on your terms, and going to be so incredibly grateful that you did.
We’d love to hear what you come up with - share it with us under our dedicated post for this workshop on the IOC facebook page or instagram account. And as a little bonus, everyone who shares their thoughts or biggest aha-moment will go in the drawer to win all 4x of our new foundations mini-courses that are launching in 2023 worth $350 each!.
P.S. Want to dive deeper? We hope you’ve found these strategy session lessons helpful as you plan your new year, and if you want to go further this is only a tiny fraction of the knowledge and practical techniques we share in each of our digital bootcamps. We pull back the curtain and share step-by-step exactly how to build a sucessful business as a photographer, web developer or social media manager. Enrollments for our 2023 digital & Bali bootcamps are open now and if you send us a message via live chat with the message ‘2023 strategy sesh bonus’ for an exclusive offer that expires on the 7th Jan.
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