Need Financial Advice from Business Owners

I suggest you do some calculations.

Do you have savings? How long would that last you if you made ZERO sales? If it won't last you too long, don't do it. If it will last you some time, then you may want to try it out.

Being on your own can make you more focused on your work. Plus, as you implied, you will have a better office or place to work from. You may even be able to expand the business.

Apart from rent, though, look at other costs like utilities. There are a lot of hidden fees to living alone so do your calculations!

payoman,

This is a great question and the dream of so many! Freedom from having to work for anyone else and freedom to live on your own. Knowing when it is right to do both or either one is highly personal and requires that you give it serious consideration.

#1 Get your finances in order - I don't know if they really are or not, but here is a great resource I have personally used to help keep my family in financial order:

Real Debt Help - Get out of debt with Dave Ramsey's Total Money Makeover Plan - daveramsey.com - Some folks don't like the guy and others think he is a genius, but it doesn't take a genius to figure out that doing these steps is reasonable.

#2 As superplatinum correctly stated, you need to run the number...and I would say ask yourself some questions.

- How many clients do you need to make $10,000 a month?
- Is it reasonable to expect you can get that many?
- Do you have a sales strategy in place to keep an active pipeline?
- Are you sensitive to Google updates and how have clients reacted?

#3 Personally, are you seriously interested in doing work 100%? If you are, I would take 3 months and stick where you are at and do 100% while you are with your roommates. 3 months won't kill you and you will get a taste of what 100% really looks like.

Overall, if everything is as it is, you should probably be able to move out soon enough, but make sure you think about the above 3 points.

Let me know if this is helpful!

Shawn

First of all congrats on your success.

I am looking at making the transition from renter to home owner mid next year which will entail a increase in my payments for accommodation from $320 a week to around $600- $700.

Now I don't NEED to be buying a 4 bed room home. Its just me and the wife to be that will be living there (for the next few years at least), however I LOVE space. There is nothing better than being able to have your own space where you can work, rest and play without them intermingling in my opinion.

I think a lot of it comes down to how confident you are in your business. Is it growing or is it in a rut? You say you have only been putting 70% in, ar you willing to put in 100% to achieve the security you need?

A saying I love is that a business that is not growing is failing. And while that is a extreme point of view (that I don't 100% agree with) it makes a point. If you want to live the lifestyle you want you might just have to work a little harder to achieve it without taxing your finances too much.

I would say go for it, but make sure you have enough reserve cash to bail you out if you get sick or can't work for a few months.

I agree with the previous posters, run the numbers. You may want to consider finding a nice place of your own that isn't as expensive as the townhouse, but still nice.

Intangibles to consider, do you need to have others around or do you function better alone? Is it more important to you to have an expensive place and less profit or a cheaper place and more money in your bank account? Will having a place of your own inspire you to work harder, or hinder you because there's no one around?

You may want to look into getting an inexpensive office to work in, and keep your living arrangement the same.

My personal choice would be to do as TCA suggested and up your work ethic to 100% before taking on more debt. Get the majority of those profits put into a rainy day fund. Then think about making big changes

You didn't mention how long you've been at this, and that would play a significant role in the answers you receive.

The effort you are putting into your business currently makes me think you aren't ready to move out quite yet. I don't know anyone who has succeeded in business who didn't spend 60 - 80 hours/week working on the business. So being somewhat hard nosed about it, I'd ask why haven't you been putting 100%+ into building your business?

With no other input but what you've said, my impression is you aren't ready yet to head out quite yet. Both superplatinum and thecontentauthority make some great points that you should really think about.

When I left my last job 30+ years ago, I left because I couldn't afford to stay any longer. And after I left, my business doubled for each year for the next 3 or 4 years. That was FUN!!!

Marvin

Some pretty good advice given here, I would say that when you move out on your own, your productivity should increase dramatically. Why, not having to worry at all about roommates can free up time and energy that you can then put into you business.

Business is a Tide, highs and lows are inevitable, the most crucial thing is to keep your expenses to as low as possible.

If you move into a new home, you must have at least 3~6 months expenses saved in the bank.

When moving, make sure you move into a house that doesn't require any expenditure on furniture etc.

Find a cozy place - which is comfortable (read NOT too expensive).

Keep your fixed expense to the minimal

Do buy the requisite insurances.

Hope this helps

I appreciate the responses and it seems the answer is a bit clearer.

To answer a question above, I have been doing this for 6 months total, with the last 4 months being profitable for the numbers I specified. That's 4 months straight of profit, all purely off the work I have put in (that is, cold calling).

This gives me the confidence that if I increased the calling (from about 350 dials a month to 800 dials a month), that I could increase business and afford this new place.

It really is at breaking point at my current place. My office is tiny and ugly. My housemates are loud, college-age and frequently leave substances around the office after a weekend that I have to clean up. My other housemate has her boyfriend over every night and occupies the kitchen/living room and they fight.

4 years of living with others has taken its toll, but I want a nice place.

Who pays rent by the week? I think the distractions alone will help you double or triple your income. I wouldn't think twice about this decision.

No. You can't afford it.

It isn't a business necessity, it is a want, and you want it for the IMAGE not for the longevity of your BUSINESS. It will probably be the worst mistake you can make... it's too much. $1,600/mo is overkill.

You don't need clients to come over, and when you pretend to be successful when you really aren't, it rubs people the wrong way. However, if you're moving up and making progress, business owners can appreciate the work you're doing to become a self made man.

Image isn't everything.... results are everything. Spending almost 4X more on rent, is more money taken away from your business. Find a place for 500-600 bucks... and it would be a good idea, maybe.

You also need to start separating your money. What your business makes, isn't what you make. Bad idea in my opinion. If you are able to make 5K/mo where you are, then you can make more as well. You're just making excuses for why you can't do more. A new place doesn't increase your monthly sales, it increases your monthly expenses.

Your first goal, before anything else should be to save up for 9 months of expenses.

OK that's the best argument so far. That I could invest the money back into my business.

So I'm basically trading speed of growth for quality of living. That's all it really is, isn't it.

I could save $15 000 a year and live in a shitty situation around low income negative people, or move to a shitty neighbourhood for the same amount of rent around low income neighbours. I could invest that $15 000 and get lucky, maybe make a $10 000 profit. So live in shitty situation for 12 months for an extra $10 000, maybe double and make it $15 000. I don't know the numbers, but for $15 000, over the course of an entire year, yeah I don't know.

The alternative? Spend an extra $15 000 this year and live in a nice innercity location, in a great apartment and feel inspired every morning waking up. Look around at what I have accomplished and feel satisfied. Remember I have rent to pay, hit the phone and avoid being distracted by housemates.

I really think there are benefits here that might make the investment a bit more worthwhile, don't you think Iamnameless?