Right before the pandemic began, I did a fun podcast interview with Andy from Marriage Kids & Money, a work-from-home solopreneur. It was nice to connect with another father of two young children in the online world.
Andy took a leap of faith at a very similar age as me in 2012. Although my main goal for leaving finance wasn’t to build Financial Samurai into a business, this site ultimately ended up generating supplemental income to help keep my wife and I away from work.
Now that I’m stuck at home, I’ve been spending more time understanding the online business world. It’s truly fascinating to learn what some people are doing nowadays to make money online. Their websites are slick. Their marketing strategies are focused. And hopefully they are making good money as a result.
If you’re considering becoming a work-from-home solopreneur, here’s Andy’s advice on how to make it happen.
You never know unless you try!
Becoming A Work-From-Home Solopreneur
Transitioning from full-time employee to a work-from-home solopreneur can be quite a big step for people to take. This is especially true as a young parent. Not only are we caring for our own financial and physical well-being but we’re also focused on protecting our spouse and children as well.
Thoughts about this big decision had weighed on me for the past few years as I found a side hustle that I absolutely loved. I started a podcast and blog called Marriage, Kids and Money after a bad day at work in 2016 and treasured every minute I could spend working on it.
At the same time, I was rapidly losing interest in my full-time career in corporate event marketing. I had been in the industry for over 15 years and felt I’d done a good job and climbed the ladder as much as I felt comfortable. It didn’t feel like there was much else I could do in my career or in the industry as a whole.
One of the glaringly obvious issues with leaving my job was that I was only making $30,000 per year with my side hustle and $180,000 with my full-time career.
Further, that doesn’t include all of the incredible benefits my employer provided like healthcare, dental, paid vacation, 401k match, an Employee Stock Ownership Program (ESOP) and much more.
So I had a choice to make …
Do I leave my cushy, well-paid, corporate job in hopes that I’m able to pay myself $180,000 in the future with my side hustle?
Or do I keep moving forward with my 9-5 career in corporate event marketing, keep pursuing financial independence and hopefully retire early?
After many discussions and encouragement from my wife, I chose to leave my career earlier this year. Here’s how I did it and what I’ve learned after 6 months as a solopreneur.
The Steps I Took to Become a Solopreneur
1) Test your business as a side hustle first
It was important for me to know that I actually liked (nah, LOVED) my side hustle before jumping into it full-time as a solopreneur. This was something I was going to be doing with the majority of my work week going forward.
With this in mind, I tested out my business as a side hustle for over 3 years before deciding it was right for me. This was 3 years of ups and downs, failures and successes and true moments of learning.
I slowly but surely figured out how to take it from hobby in year 1 to side hustle in year 2 and 3. Those 36 months gave me a taste of what small business ownership really looks like. It was eye-opening and at the end of the day, I still wanted more.
2) Wait until the kids are in school full-time
For the previous 7 years, my wife had been an awesome and dedicated stay-at-home mom. After our youngest child finished pre-school and headed off to kindergarten, my wife was ready to go back to work. As she explained it, she was just so ready to talk to adults again!
My wife and I loved the relationship that she had built with our kids. We didn’t want that to fade. So we decided it made sense for her to pursue a 30-hour per week job where she’d be able to pick up and drop the kids after school and not work late hours or evenings.
Through her previous experience and awesome network, she found a perfect gig that worked well for our family schedule. This helped our family by bringing in some good income to supplement my huge loss of income.
3) Prepare financially for the Solopreneur leap
Outside of my wife’s new income, we wanted to make sure this solopreneur venture wasn’t going to put our family in jeopardy. That’s why we ended up saving over 12 months of expenses in a high yield savings account as a mega-emergency fund. This money in the bank gave us peace of mind knowing that if it took me a while to grow my income we’d be okay.
Healthcare was another area we focused on to make sure we had the family protected. After researching plans and options provided through the Affordable Care Act, we realized we could get a plan similar to what I had through my employer. Because our family is in relatively good health and we have a larger emergency fund, we went with a high deductible plan to keep our monthly premiums lower.
Last but not least, we focused on lowering our expenses in the years that preceded this solopreneur decision. One major way we did this was by paying off our mortgage in less than 5 years. By getting aggressive with our mortgage payoff process, we were able to lower our expenses and free up an extra $35,000 per year.
Lessons After 6 Months as a Solopreneur
1) Owning a business is harder than being an employee
Now that I’m 6 months into this solopreneur venture, I’ve realized a few things. The first one is that when I was an employee, I did not realize the amount of benefits and perks I was provided. I definitely took them for granted.
The healthcare, dental and 401k plans are incredible. Now that I’m paying for these myself, I didn’t quite understand the monetary value as well as the emotional value of never having to worry about them.
Outside of those benefits, there was also the advantage of having the following departments:
- Accounts Receivable
- Accounts Payable
Honestly, that list could go on and on. These are all roles that I now have to assume as a solopreneur. If a client doesn’t pay me on time (or at all), then I’m on the hook for hunting down that money. Or if I need to onboard a new freelance team member, that process is on me too.
Below is a detailed analysis Sam put together on how much you need to make as a solopreneur to replace your day job income. It looks like you might need to make 60% more as a solopreneur to stay even due to all the benefits.
2) Outsourcing is important because you can’t do it all
I know I need to do all of the roles I listed above (and more), but I quickly realized that I couldn’t. Unless I wanted to work 80 hours per week and risk hating my “passion,” I needed to get help.
One of the first areas I outsourced was accounting. Being a numbers guy, I figured I could handle this. Much to my surprise accounting was quite different from personal finance. Now that this task has been fully outsourced, I feel much happier knowing it’s being handled correctly by a professional.
The outsourcing continued from there! I hired writers, editors and even support for social media. The work quickly became a lot easier, but the profits became a lot more slim.
Now, I’m working on finding a balance of outsourcing some of the work that I feel unequipped to handle and taking on the tasks I know I’m well-suited to manage.
3) Pivoting is crucial in times of change
With the global pandemic and our current recession, I’ve had to adjust my business plan so many times during the last 6 months. What a year to start a business!
What worked well last year, doesn’t work as well this year. So as the economy is pivoting, I am as well.
My in-person speaking engagements have transitioned to virtual financial wellness seminars. When revenue from site advertising dipped, I looked to my network for freelance opportunities to bring in additional income.
I’m so thankful for that network I’ve been able to build as well. I truly believe your professional network is more important than your net worth. As a newbie small business owner, my network is the reason I’ve had any success whatsoever this year.
Is Solopreneurship Worth It?
You might see these two lists of preparations and learnings and think, “Woah, that looks like a lot of work!” And to that, you’d be right. I’ve worked very hard to learn and grow so that my small business becomes a big success in the future.
I don’t expect to be where I was with my former career salary-wise for at least another 5-10 years. After all, it took me 15 years to get there in the first place.
Even with our income set back over the past year, we were able to increase our net worth to over $1,000,000. This is an awesome milestone for our young family. I sure hope it lasts!
In truth, income is not my driving factor anymore. It’s more about the lifestyle that I’m creating. One that is focused on healthy living, family time and doing work that I love.
I absolutely love every minute I get to work on my solopreneur venture. I don’t want to go back as an employee any time soon.
Do I miss the benefits, perks and healthy paycheck? Absolutely!
Would I trade it for this new lifestyle I’m in the process of building? Nah.
But who knows what tomorrow will bring? With this rapidly changing economy, I may need to pivot back to being an employee. And if I do go back, I’ll feel proud knowing that I gave it my best shot as a solopreneur.
-Andy, Marriage, Kids & Money
Follow Up Questions For Andy
I hope you guys enjoyed Andy’s guest post about being a work-from-home solopreneur. Going from making $180,000 down to $30,000 was a similar ~80% income decline I took in 2012. It’s not easy to make such a move without a lot of planning and support!
I’m confident Andy will surpass his previous day job income if he commits to his business for 10 years in six years time. Working from home is definitely a permanent trend.
Here are some follow up questions I had for Andy. Feel free to ask any questions you have about the work-from-home solopreneur life as well in the comments.
How will you know when it’s time to go back to work?
No matter what, I don’t think I’ll ever return to corporate event marketing. I worked in the industry for 15 years and I thought I did a good job. I’d like to leave it at that.
If my solopreneur business ends up being a flop, I suppose I’ll look for a job in a new industry. I would start that search when our family emergency fund drops down to 3 months of expenses.
My dream of growing my online business isn’t more important than my family’s well-being.
What is the hardest non-monetary adjustment you’ve had to make?
With the global pandemic, the hardest adjustment for me has been having my kids at home every day. My goals of working uninterrupted on my business during the day while my kids were at school were wiped away in March.
Having the kids at home and not a lot of places to go has been rough on our marriage too. My wife and I crave quality time together and we’re not getting it lately.
Any tips for solopreneurs for how to make more money/get more clients etc?
I recommend connecting with a network of people who are likeminded. These can be other folks in your industry or just people who are working on a similar path as you.
Doing this in the form of a weekly mastermind can help you stay accountable to your small business goals and it’s also helpful to bounce things off of smart people when you don’t have co-workers anymore.
Readers, are you considering becoming a work-from-home solopreneur? Please let us know in the comments below.
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