Going self employed - do i take the jump?

[bu06nne]

For those of you who have switched from employment to self employed - what was the turning point for you?

My biggest concern is that I would only have one income stream ( a single website). If something were to happen to the site I would be stuffed. Traffic is a 50:50 split between Google and Social.

What would you guys recommend? 2/3/4 websites all generating good income before going self employed?

 

[monaghan]

If you only have a single revenue stream, then you do take a big risk! 50% of traffic from google could drop over night if you make an error or google decides it doesn't like you any more.

Build a pot of cash in the bank, work out exactly what you want to do and then take the plunge. If you have family, then you'll need a bigger pot of cash than if single, aim to have several month's worth of mortgage/rent and household bills in the bank (this depends on what you think will happen to the business while you use up the reserves).

I took the plunge before we had kids, then ended up back in employment (best option at the time), but I've been back on my own again for the last few years due to redundancy.

 

[boxfish]

For those of you who have switched from employment to self employed - what was the turning point for you?

My biggest concern is that I would only have one income stream (a single website). If something were to happen to the site I would be stuffed. Traffic is a 50:50 split between Google and Social.

What would you guys recommend? 2/3/4 websites all generating good income before going self employed?

I walked out of my job with zero websites and no income - very irresponsible but it's a great motivator.

I now have one website which pays all my bills - the same website I started over 6 years ago.

Rather than looking at 2/3/4 websites my advice would be to have one website but 2/3/4 ways of getting traffic to it, ideally through paid methods.

I know that every week I can spend £xxx on adwords and make £xxxx in profit - everything else seo/magazine ads/mailouts ets is a bonus.

Once you have a solid foundation you can then start looking at other sites.

 

[woopwoop]

It's always great to have the regular income from employment although it may hinder entrepreneurial success in the long run.

It's a risk, I'm pretty risk averse... I'm in a job that gives me 2 months a year off to get involved in projects. If you can get something like this it reduces the risk.

 

[mat]

My advice would be to try and have 6 - 12 months of savings to live on at all times. That way if anything happens you have plenty of time to sort yourself out.

 

[domainseller200]

my advice would be to try and have 6 - 12 months of savings to live on at all times. That way if anything happens you have plenty of time to sort yourself out.

+1

 

[bu06nne]

I have around 24 months of my current salary saved. No dependents and no mortgage - still renting unfortunately.

I need to diversify away from a single site as the market size isn't massive. If I had more spare time on my hands I would be able to build out another site or two.

For the guys (and girls) who are self employed- how many of you rely on a single site? Are you better off financially now then you were working full time?

 

[ian]

It depends what you mean. Do you mean going from working for someone else to working for yourself? Only reason for clarification is that self-employed isn't the route many take, i.e. I started working for my own company, which technically was still 'employed', just by my own company, so my own risk. Ultimately the same outcome if you meant 'working for yourself'.

I did it a number of years ago. Went from a very secure job to running a business I had been doing part time for a year or so. I made the move when the profits were enough to cover basic living, with an expectation of increased profits to come.

Worked out very well for me, never looked back, set for a very long time should it all go wrong, but the key is MOTIVATION and not losing sight of this, especially if working from home.

I'm still of the mindset that I'd prefer not to work for anyone else again, but at the same time, a lot can be said for those that can leave their job at the end of each day and not think about it until they return; a luxury you will never have again working for yourself

 

[martin-s]

24 months savings is too much - you need to invest some of it in earning assets.

You asked if we're better off self employed. Financially for me that's a no as my earnings were in six figures in those days (8 years ago).

But I am much happier with the freedom and to be building a future of my own.

Don't be misled that you'll be your own boss. If you run a 'real' business, the customers are the boss until you earn enough to delegate.

 

[Edwin]

24 months savings is too much - you need to invest some of it in earning assets.

I would strongly disagree with that. It sounds like a very sensible buffer to have so that you have the time to replace your current salary with multiple independent revenue streams without having to waste a moment's thought on how you're going to keep food on the table in the meantime. It can be really liberating to have the ability to focus intently on new projects without having to worry about them having an "instant payback".

Gives you 18 months worth of "trying" plus 6 months worth of job hunting should things not work out as you hoped they would.

If on the other hand you only keep a 6 month buffer, you have to basically start job hunting almost immediately to be sure of having some form of income coming in consistently if for any reason Google burps and spits out your current earning site.

 

[Murray]

I would strongly disagree with that.

I don't know, 24 months seems like a lot of money just to be sat in the bank losing its purchasing power.

If you're enlightened or lucky enough to know of the right investment(s) then you certainly have some slack there

 

[Edwin]

I guess I'm just being conservative, but lack of ready cash means that you become a puppet to circumstances rather than master of your own destiny. There's a risk that you end up doing "anything to make money" rather than what you really want to do. Far too few people are prudent enough to give themselves the kind of buffer they REALLY need to make a good go of things on their own.

Plus money in the bank doesn't just "vanish" (even if inflation nibbles away at it a bit). It will still have nearly all of its purchasing power in a year's time, so it will be available to "splash" on things once it's clear your going it alone plan is working out.

 

[bu06nne]

interesting view points. I am a bit concerned that I could just have a one hit wonder on my hands.

My plan of action is to launch one more site, if this is successful then I will be going full time.

Wish me luck!

 

[mat]

I have around 24 months of my current salary saved. No dependents and no mortgage - still renting unfortunately.

Now sounds like a perfect time to get a mortgage while employed and with savings, then look into moving to the dark side a bit further down the line once all that is in order.

 

[bu06nne]

Getting a mortgage for somewhere in London is easier said than done - especially when you're looking at 350k-400k for a half decent flat.

 

[mat]

Move out of London then! lol

 

[disruptive]

I think being able to live without doing much is the key, that takes the pressure off. So having multiple steams of passive income. I.e. some from investments, interest, and rental income.

I see online revenue as a bonus, seen how quickly the tides and turn. That's why you need to diversify your risk. Maybe develop one traditional business that is online but is based on selling a physical good, another one on content, etc etc.

Depending on the lump sum - dump in investments and you may get close to 10%. Not risk free and then live off that rather than drawing down your capital.