[This is part of the Escaping the 9-5: My Road to ProBlogging series.]
When I first started considering my jump from corporate america and the cubicle I took into consideration many financial models so that I could make the wisest decision about when I should leave and how I’d make ends meet with the change.
My goal, from the very beginning, was to make sure that I could be as financially responsible with my choice as possible, for myself and my beautiful (and growing) family. No job change would be worth the risk if it unwisely jeopardized my ability to support them! And I imagine that many of you would agree!
Let it be know that I’m not a terrific planner or someone that enjoys intense financial modeling but I knew just enough to accept the fact that without an idea of the financial impact with a jump into professional blogging I’d probably burn hard and fail my family royally.
I didn’t want that to happen. So I began my research and here’s one model that helped me think a bit more globally and I hope it gives you a bit of perspective as well.
So, What’s It Going to Take?
Like many of you I had a corporate salary with a direct deposit twice every month, health insurance, a 401k, and other nice benefits that made my life comfortable and predictable (and perhaps a bit boring).
And life was good but it wasn’t ultimately for me long-term. But how was I going to make the jump – was I going to be able to do it financially?
What I first did was I took a look at my current salary as well as my current financial needs. This required a deep dive into the world of budgeting.
Now I’m not a professional budgeter by any stretch of the imagination but my recommendation is that, at the very least, you need to have a very good understanding of a budget for your needs as an individual and/or family. Without this you’re shooting completely in the dark.
A Somewhat Simple Calculation
The first thing I did was I took my current salary and estimated, from a number of different angles, my current income streams via blogging as well as the many other various projects that had tangible cashflow.
I then simply compared this to my current corporate salary and found out what the “gap” was (and there was definitely a gap).
To start (and for simplicity) I took my salary, which was currently sufficient for my needs (let’s just say I was making $50,000 a year to make it easy for these numbers) and I then figured out what I’d need to make per week and per month.
I assumed that out of a 52 week year I’d now be working at least 50 of those weeks (2 weeks “off” for vacation, sick, and other miscellaneous days). Here’s what I came up with:
- $50,000 / 12 months = $4,167 per month
- $50,000 / 50 weeks = $1,000 per week
So I would generally need to make about $1,000.00 a week through blogging and other activities.
I then needed to figure out what this was on a per hour basis:
- $1,000 per week / 40 hours = $25 per hour per week
Finally I decided to do some research on how long it typically takes me to write a blog post to add another layer to my calculation:
- 1 blog = 3 hours of work (at least)
Surprised? You shouldn’t be. Most people when they calculate the time per blog post only think about the time it takes to publish the post but a blog post requires much more time than that – you must include the time that you use making mental notes, ideating, drafting, editing, finding related media, linking, and then publishing.
If this is true I could then calculate how many blog posts that I could reasonably publish per day, per week, per month, and per year (50 weeks, not 52):
- 8 hours per day / 3 hours per blog post = 2.66 blog posts per day
- 2.66 blog posts per day * 5 days per week = 13.33 blog posts per week
- 13.33 blog posts per week * 4 weeks per month = 53.33 blog posts per month
- 13.33 blog posts per week * 50 weeks per work year = 666.67 blog posts per work year
Lastly, I could finally calculate, with general certainty, what I’d have to make per blog post to achieve $50,000 a year:
- $50,000 per year / 666.67 blog posts = $75 per blog post
Whew. Once I saw this figure I had at least an idea of what I needed to work towards.
What Does This Really Mean? Is This Reality?
Well, the calculations really speak for themselves but I’ll be honest – I was a bit deflated when I saw these numbers when I first calculated them because I knew that blogging professionally was a lot more complicated of an equation than just taking a yearly salary and dividing it by the number of blog posts that I felt like I could do.
This number, at the end of the day, could only serve me as far as being just that: A number. Here are some my other considerations:
- Working for myself means that I would have to pay a lot on my own (being self-employed) which would include health benefits, other insurance needs, home office supplies, and more. Corporate america and big business covers a lot of that for you.
- There are different taxation rules that I have to take into consideration as well as corporate fees if I created an S or C Corp or LLC for my blog.
- $75 per post is a lot for any blogger, especially in the beginning. I knew that I would not make this when I first started out, especially if I was going to wait to monetize (which I did). I divided this number by 3 and 4 to get a more probable picture of what this was really going to look like, especially in the beginning (or even for the first few years).
- 3 hours per blog post was just an estimate and average – but I didn’t know what the actual number would be, especially if I was doing this truly full time. Would it be more? Would it be less? More than likely I could do more if I was going to dedicate myself full time to it, right?
- 40 hours a week assumes that I will be actually working 40 hours a week. I know (and you know) that this has never been the case. I’m not even sure what working 40 hours a week even feels like. I would more than likely put in at least 60 to 70 hours a week, if not 80. This is a startup! And, I love to work hard.
- I also am a part of a few other startup businesses that are cash flow positive. In other words, I have other sources of income that can augment my total yearly needs.
With these thoughts in mind I created another spreadsheet and “alternate reality” to help provide another perspective. It included a few of these:
- $75 per blog post became $25 per blog post
- $50,000 per year became $25,000 per year – I divided my blogging income by half because I reasonably believed that the other 50% would come from contract work and my other startups.
- $25,000 per year / $25 per blog post = 1,000 blog posts per year
Again, please note that $50,000 a year is just a number I’m using for blog post and example – my actual financial goals were a bit different.
The Verdict? Was I Crazy?
Of course, this was just one financial model of many that I used to help create a reality check of what it would take to go pro and the financial challenges were just some of the factors that I had to consider.
Ultimately I figured out that I could create a sustainable income via blogging and it would be enough, even in the first year, to make the jump. Heck, it could only go up from there! Or at least I hoped so, right?
And after 10 months and closing quickly on the first year I’d say that my original projections were pretty good and I’m feeling great about my decision – but it’s not all about the money; I’ll share more thoughts about the other aspects that helped me make my choice in a few blog posts later in this series.
Hope this helped give you some perspective and insight into my decision making process as I considered the leap into full time blogging!
Let me know if you have any questions and let me know how I can help you more!