Going full time entrepreneur with a family of 5 👀
Going full time entrepreneur with a family is challenging, but there’s a few things I had in place before making the jump (for the 2nd time)
/ Have a trade-time-for-money “keep the lights on” source of income at all times while building your leveraged asset (startup, etc...)
/ Calculate monthly burn and work backwards to min hours per week to keep bills paid. If burn is 10k, and your rate is $175, you need to hit 3 hrs per day, 5 days per week. Track your time and as long as on Sunday you’ve hit your weekly hourly goal, you’re good to go.
/ Look for ways to reduce burn. I put all 3 kids on Chip insurance and got a high deductible plan through Cobra for 18 months. $700 for 3 kids and around $800-$1k for wife and I.
/ I write out every hour of my work day the night before to make sure I have blocks of time for asset building and time for hourly billing. I use Basecamp todos and just check them off as I go.
/ Diversify hourly income so you’re not completely dependent on one source. That way you have a backup A, B and C if something happens to A. You’ve already set aside those hours so you can mix it up and get some variety.
/ Talk to your accountant and figure out what percentage you need to take out of every single check that comes in and put it in a tax checking account and do...not...touch 😆 I do 30% every time I’m paid.
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Good advice Jack, thanks for sharing.
I'm also a family of five, and it's hard to manage with being an indiehacker. Sometimes I wish I were in my 20's again with no kids, it'd be so much easier!
I know how you feel Steven! What I realized is that having constraints on your time makes you much more productive during that time. In college I can remember wasting entire days laying around and playing videos games, thinking I had all the time in the world, so I took it for granted, and my productivity tanked.
And having a family gives you a reason to hustle outside of your own personal gain. When things get tough, you know you're doing it for them, and that can give you energy when you didn't think you had any left :)
Agree! Also, I was an idiot in my 20's. Far smarter and more capable now.
Exactly, it's an advantage!
Bravo Jack!! This is not easy and I respect your boldness.
Thanks Kevon! It ends up being less risky in the long run I’ve discovered
Really good stuff Jack, thanks for sharing!
Hey Jack - what advice do you have for indies that can only get 1/3 of the $175 rate you mentioned?
Couple things:
Once you have your "sure thing", source of hourly income, like an ongoing service you provide where you believe it'll be pretty stable for a while, then you can start being more aggressive with your rate outside of that. If you're doing $60/hr at Company A, which is reliable, you can go to Company B with a rate of $70 or $80. If they say no, no biggie, you already have income coming in. That's one way to look at it.
The other is to figure out your hourly rate at a full time job (if you have one). My last full time gig, turns out I was making $72/hr (at $150/year). I realized I could make that same amount of money and work less than half of the 8 hour full time job, and make the same money.
Fulltime Income: $150,000 is $2,884 per week divided by 40 hours is $72/hr
Contract income: $150,000 is $2,884 per week divided by 16.5 hours is $175/hr
A 41% decrease in time spent = time margin
So calculate your time margin and if it's more then 15-20%, then it makes sense to jump.
The only downside is that PTO is factored into your pay as a full time employee, so expect to work holidays. HOWEVER, if your minimum per week is 25, then just work an extra hour or 2 during the week to make up for a day off.
This is not a long term strategy, since hourly income is not a great business model, but it can buy your time back for a while so you can build asset income like a SaaS, etc...
The other to consider is adding in healthcare costs to your full time income, usually around 2k for a family of 5. So you could add that in to your overall salary when you do your calculations.
Hope that helps (and my math is correct, not my strong suit, haha)!
Many thanks for your advice.