Disclaimer: This is dollar-heavy and a long read with no spoonfed method, just a framework. If you don't like that, you should probably move along. So, you decide to stop chasing the high of income spikes are are ready to take the dive into a true business. You are selling X (not ecstasy, this is just a placeholder for whatever product or service you offer). X's going rate is $1,500 per month. You find several good resources for exactly how to implement X, and spend months -3, -2, and -1 researching, testing, gathering a potential client list, building your brand, and creating a step-by-step template (some call this a standard operating procedure) that you will follow on a month-by-month basis to ensure that all deliverables can be met. "How long is it going to take to build this X business to the sustainable level of $280,000+ per year working five hours a week?" Five years, give or take, depending on the need to pivot the process flow of whatever X is. So, let's get into some hypotheticals. YEAR ONE Month 1 you're out the gate and on the last day of the first month you get your first paying client. You ask for $5,000 upfront, and $1,500 per month after that. They agree, and send you your upfront payment (a pseudo "retainer", I use these in reputation management to cover upfront costs such as hosting, domains, content, and links, as well as ensuring that the client means business and has the wallet for it). So, end of day 30 you're looking at a $5,000 check. Month 2 you take that $5,000 and spend $2,500 of it on other products and services, put $1,500 away for tax purposes, and take home $1,000. But guess what? As the month went on, you secured another X client (one new client a month is not an outlandish rate if you put the time and effort in and know how to sell yourself). At the end of the month you get a $1,500 check from Client 1, and $5,000 from Client 2. You build some rapport with service providers and get the expenses streamlined down from $2,500 to $2,000, which will be the going rate for client onboarding from that point forward. Month 3, same thing happens. So at the end of the first quarter, you are looking at the following: $5,000 + $1,500 + $1,500 from Client 1 = $8,000. $2,500 initial expenses, $1,500 initial taxes, $250 monthly expenses, $500 monthly taxes/fees. $2,500 post-tax take home from Client 1. $5,000 + $1,500 from Client 2 = $6,500. $2,500 initial expenses, $1,500 initial taxes, $250 monthly expenses, $500 monthly taxes/fees. $1,750 post-tax take home from Client 2. $5,000 from Client 3 = $5,000. $2,500 initial expenses, $1,500 initial taxes. $1,000 post-tax take home from Client 3. That's $5,250 take home post-tax from three clients in three months. And don't worry, you won't be paying all that tax money to the tax man. That's just a nice buffer in case of emergency. Expect a handsome payout at the end of the year with the money you're stashing away. Let's say you continue as a one-man show for a full year, gaining a new client each month until the end of the year until you have twelve X clients at the same rate. They all follow that same financial track. So here is what you have at the end of Year One, take home: ($1,000 x 12) + ($750 x (11+10+9+8+7+6+5+4+3+2+1)) $12,000 + ($750 x 66) $12,000 + $49,500 $61,500 The $1,000 is the take home pay from each of the initial $5,000 fees. The $750 is the stepped monthly fee that grows as each new client is brought on. So $61,500 after over-saving for taxes, fees, and expenses. How much were your expenses? $2,500 for the first client, $2,000 for eleven other clients, and $250 per month at the same staggered rate, so: $2,500 + ($2,000 x 11) + ($250 x (11+10+9+8+7+6+5+4+3+2+1)) $2,500 + $22,000 + $16,500 $41,000 And how much money was saved towards taxes and other fees? $1,500 per new client retainer fee, and $500 per month at that same stepped rate: ($1,500 x 12) + ($500 x (11+10+9+8+7+6+5+4+3+2+1)) $18,000 + $33,000 $51,000 Congratulations, pay yourself a nice end of year bonus of $25,000. $26,000 in taxes on $86,500 in income is close to 30%, which should be roughly what you will pay. So, end of Year One, you made a post-tax income of $86,500! But you were probably pulling 60+ hour weeks to get there. On to Year Two, where things start to change. YEAR TWO Year Two you add a new client every month for the first eight months of the year, and then top out at 20 clients. There's only so much you can do. What makes Year Two a little better though is that you have streamlined your process to the point where you can hire out the simple stuff to a virtual assistant, so you hire a full time VA for $500 a month, which subtracts $6,000 from your bottom line. At this point, you can hand off a good bit of work to the VA, and all you need to do is answer questions, send money, and check work. Your workload goes from 60+ hours a week to 30. So, your workload is cut in half, you are doing an incredible job offering X to the masses, and you are getting referrals like crazy. But how are the finances in Year Two? Here's take home: ($1,000 x 8) + ($750 x (20+20+20+19+18+17+16+15+14+13+12+11)) - $6,000 $8,000 + $146,250 - $6,000 $148,250 Here's expenses: ($2,000 x 8) + ($250 x (20+20+20+19+18+17+16+15+14+13+12+11)) + $6,000 $16,000 + $48,750 + $6,000 $70,750 And here is money set aside for taxes, fees, and emergency purposes: ($1,500 x 8) + ($500 x (20+20+20+19+18+17+16+15+14+13+12+11)) $12,000 + $97,500 $109,500 But guess what? You won't need to pay six figures in taxes on around $150,000 take home. Give yourself a bonus to the tune of $40,000 cash. $69,500 to taxes, $188,250 in post-tax, post-expenses income at the end of Year Two. YEAR THREE In Year Three you don't increase or decrease your X client load. If you lose a client, you hypothetically gain one as well, and stay static at 20 clients. What you DO is at the beginning of the year make three changes: You offer an add-on service to X that increases the price $1,000 per month. There are no expenses associated with it. Assume you offer the service January 1st and by the end of the month five of your 20 clients have signed up for it. You hire two more virtual assistants at the $500 per month rate to handle the new add-on service, as well as overflow from both yourself and what your original VA is doing. Your hours drop from 30 per week to 20. So at the end of Year Three, I wonder how things change? Here's take home: ($750 x (20 x 12)) + ($1,000 x (5 x 12)) - $18,000 $180,000 + $60,000 - $18,000 $222,000 Here's expenses: ($250 x (20 x 12)) + $18,000 $60,000 + $18,000 $78,000 And here is money set aside for taxes, fees, and emergency purposes: $500 x (20 x 12)) $120,000 Let's say as well that you end up with no bonus, but instead kick a little back to your VA's and use the rest on some emergency that pops up as well as maybe you had more taxes to pay. I don't know, I want to make this X business seem realistic. So there you are with $222,000 in take home pay working twenty hours a week. YEAR FOUR Year Four you maintain that healthy twenty-client load, five more of the clients sign up for the X add-on service, and you hire an in-house assistant for $15 an hour, 40 hours a week. This allows you to decrease your time spent even further to only ten hours a week, half spent answering questions and emails, the other half doing odd tasks and meeting with clients. So at the end of Year Four, working ten hours a week, here's what your take home looks like: ($750 x (20 x 12)) + ($1,000 x (10 x 12)) - $18,000 - $30,000 $180,000 + $120,000 - $18,000 - $30,000 $252,000 Here's expenses: ($250 x (20 x 12)) + $18,000 + $30,000 $60,000 + $18,000 + $30,000 $108,000 And here is money set aside for taxes, fees, and emergency purposes: $500 x (20 x 12)) $120,000 Congratulations, you made a quarter million dollars in year four... profits. Revenue closed in on a half million dollars. But let's hit Year Five, when you make it to the big leagues with your X business. YEAR FIVE Congratulations, you're a serious business. You have employees, you have clients, you have respect, and you have people knocking down your door wanting in. You've branded yourself fully, you've cemented yourself as a magician in the community, and you're ready to step back and outsource. So here is what changes in Year Five: You package the add-on service of X that you introduced into its own thing, offering it to potential new clients who were wanting to work with you. You add ten clients at this $1,000 per month rate at the beginning of the year, and again have zero associated expenses (besides outsourced work to people you are already paying). That puts you at ten clients with both packages, ten with the basic package from the beginning, and ten with the new, simpler package. You fire two of your three virtual assistants (forwarding their work experience to other entrepreneurs looking for solid VA's, no need to burn bridges) and hire two more full-time employees at $15 an hour. The employee you hired at $15 an hour in Year Four gets a healthy 25% pay bump to $20 an hour. You also hire a full-time employee at $10 an hour full time to handle customer service needs. With one VA and four full-time in-house employees, your workload decreases to one hour a day five days a week, spend answering emails and calls directly from clients. Oh, and cashing checks. Speaking of, you take on an on-call accountant for $500 a month and on-call as-needed legal counsel that you likely won't need except for documents for another $500 a month. Better safe than sorry. So technically five full-time employees and two on-call employees at your disposal. So at the end of Year Five, working five hours a week fielding emails and phone calls from wherever in the world you want to work, here's what your take home looks like: ($750 x (20 x 12)) + ($1,000 x (20 x 12)) - $18,000 - $60,000 - $40,000 - $20,000 $180,000 + $240,000 - $18,000 - $120,000 $282,000 Here's expenses: ($250 x (20 x 12)) + $138,000 $60,000 + $138,000 $198,000 And here is money set aside for taxes, fees, and emergency purposes: $500 x (20 x 12)) $120,000 That's a solid, accurate number for taxes required on $282,000 in business profits. From there, you can either keep things at they are, ensuring that you replace clients who drop off with new clients to keep things static, or grow further and continue hiring and outsourcing. Regardless, there is your financial blueprint for your X business to almost $300,000 in profit in five years, sustainable. The questions you need to answer are: What is your X? How will you market and brand yourself? How will you maintain clients and communicate changes and answer questions? What will your emergency plan be? What will your hiring process and practices consist of? If you aren't in the US, how can you adapt this to your currency, tax system, and cultures? FAQ This doesn't help me at all, this was a waste of my time. Cool! What am I supposed to be selling? That's your prerogative. I chose online reputation management services under the guise of "small business and personal online branding". What if I don't think I can secure that many clients? If you can do the above at a quarter of the scale presented, you're still going to be making over $70,000 per year at the end of the fifth year. What if I don't think I can charge people $1,500+ a month for a product or service? See above. But I'm too young! Nobody will buy from me once they see my pudgy-ass little 14 year old face! Then don't meet face to face with people. None of my real clients are even located in the same US state as I am. TO CONCLUDE Find your X. Make something sustainable and lasting, and then set yourself free.