"I would definitely, definitely make sure you have at least a little bit of savings before you take the leap because you don't wanna be forced into taking shortcuts with your business"
Recently, I had the opportunity to chat with Akta at Passionfroot about how I quit my job to pursue full-time creative entrepreneurship & how to manage your money after you take the leap.
Some of the things we talked about:
🎥 Taking the leap into full-time [15:24]
This is one of my favorite things to talk about because I quit my job in 2020 to start a business and from the beginning, I would think about:
1. What you're trying to accomplish
2. Why you want to take the leap in the first place
Is it something that you can do on the side and you enjoy having the security of regular income, but you want a little bit of a creative outlet? If so, you might not need to take the full-time leap. But you just want go through that mental exercise first to make sure it's something that you truly want to do.
For me, I was suffocating at my job and there was no way to progress faster - just doing good work in the company. So I needed to get out of there and pursue something that I actually wanted to do.
So that was my main driving factor behind the leap.
Then once I knew that was the right decision for me at the time, I started thinking about the business costs and my personal expenses.
This will vary a lot depending on the type of creative business that you want to go into - for example, if you're just creating content, there's probably not too many business costs. It might just be like a new computer, a new camera, or something like that, but then you also want to think about the personal expenses.
When I quit, I didn't have a spouse or partner or anything to provide any sort of income, so I needed to plan out a year of the business expenses and then a few months of my own personal expenses so that I wasn't forced to take shortcuts or do anything I didn't want to do to try and make money right away.
That was huge because I know how much financial pressure can put on the creative process so I would definitely, definitely make sure that you have at least a little bit saved up before you take the leap because you just don't wanna be forced into taking shortcuts with your work.
Then more on the personal side, if you have a spouse that can support your transition, I would give yourself a timeline:
"I'm going to give myself a year, and if I'm not making money at that point, then I need to reevaluate & reconsider what I'm doing"
Then just set little benchmarks like that. But definitely the biggest thing is having savings because you're probably not gonna make money right away unless you've already built up something on the side first.
And that can be a really good strategy while you're preparing for the leap - try & do stuff on the side so that you have a little bit of income before you even quit.
Maybe it's enough to pay your rent, then you'll figure out how to piece together the other $500 every month for your other expenses.
But depending on your situation and risk tolerance, I would just make sure you have proper savings for it and that goes back to knowing your numbers.
🎥 How to know when it's time to hire [22:26]
You should be able to easily cover your business expenses and pay yourself regularly before you bring on any sort of additional responsibility into the business.
So that's the first checkpoint, make sure the business has good financial foundations.
It can also be like easier to bring on a contractor or a freelancer first so that you can test out what it's like managing someone else. Then you're not responsible for like a consistent payroll because for me, that feels very stressful, being responsible for someone else's livelihood.
But if you're trying to scale and grow with employees, you have to make sure the financial foundations of the business are taken care of first.
Then I think it's super, super important to like have a clear purpose for that hire.
You should know what role they're gonna play, how that hire's gonna benefit you in the business and then I'd make sure that there's set certain goals for wanting to outsource & hire.
For example, if you want to bring on an editor so you can spend more time getting brand deals, you should have a way to measure the success of that.
Maybe each quarter you do a checkpoint where you just look, "did I get more sponsorships?" or "did I have more revenue than before I brought on this person?"
Whatever your goal for hiring is, there should be some sort of measurement to actually make sure that it's making sense for you.
But then there's also the subjective ROI (return on investment).
For example, there doesn't necessarily have to be a dollar amount to see the benefit from hiring because just the fact of outsourcing a task you don't like and being able to afford it could be worth bringing on that hire.
It might not make the most financial sense, there could be better hires, but if you genuinely don't like editing or don't like writing or whatever it is.. being able to afford it, paying that person, and getting it off your plate - that could just be worth it in itself.
So those are just kind of like a few of the few of the things that I think about.
Making sure that you can afford it business wise, and goes back to the core basics of just like knowing your numbers—knowing what's coming in and out every month—so then you can make a smart decision on whether you truly can afford that or not.
🎥 One piece of advice for creatives [34:50]
"Don't be afraid to just try things."
Nothing that I'm doing at the moment was what I was doing two, two and a half years ago when I first started.
Follow whatever your interests are at the time.
Last year I had built one website and now, 12 months later, I've built 15 and it's like my favorite thing that I'm doing right now. And then from a creative standpoint, I started with these weekly videos that were just quick, two, three minutes talking about financial news and I'm not doing those anymore.
But I was just putting in reps and it was something that I wanted to do. Those videos led to getting a brand deal with a company to make financial education content for them. And then that took me in a different direction and then that situation took me in a different route figuring out what I wanted to do video content wise.
So I would just say follow whatever your interests are and don't be afraid to change directions and keep trying to figure out what works.