206: Harsh Financial Realities of Early Entrepreneurship

206: Harsh Financial Realities of Early Entrepreneurship


In this solo episode, I talk about the harsh financial realities of early entrepreneurship and share my own experience. I was prompted to share about this due to informational interviews I’ve been invited on and many instances where I realized that a lot of people have no clue what goes on behind closed doors within a single-member business and their finances. I stress the importance of transparency in sharing the financial aspects of entrepreneurship, especially for those in higher ed who are considering this career option. I explain how many entrepreneurs spend countless unpaid hours on various tasks and face expenses that traditional W-2 employees would not have, like taxes and overhead. I end the episode with call to support the entrepreneurs in your life, whether financially or through referrals and sharing.


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Dra. Yvette Martinez-Vu 0:02

Welcome back, everyone to another episode of the Grad School Femtoring Podcast. This is your host, Doctora Yvette. Today, I have a short and sweet solo episode for you. It's all about the harsh financial realities of early entrepreneurship. I've been going back and forth on recording about this topic for the last couple of weeks. Actually, it's been on my mind, it's been in the back of my head.

Dra. Yvette Martinez-Vu 0:30

And I wasn't sure whether or not to record it because of two reasons. Because one, it is more on the vulnerable side in terms of sharing the, you know, what's going on for me in my entrepreneurship journey financially, and what I've learned about solopreneur ship or entrepreneurship as a solo entrepreneur, and the last two years that I've been in business.

Dra. Yvette Martinez-Vu 0:30

The other reason I wasn't sure about it is because, again, I wasn't sure how relevant is this to my audience, who is primarily here to learn more about higher education. But I've been hearing from more and more people who have been reaching out to conduct informational interviews, and they want to learn more about how I got into this, how I started my business, and how I'm making it work. And so I thought, well, instead of just having these conversations behind closed doors, you know, me, I like to share what I know and share it openly so that other folks don't have to wait until they're in, you know, an intimate setting to get this information. They can get it from me on the podcast.

Dra. Yvette Martinez-Vu 1:38

So what's going on? Why am I calling it harsh realities? You know, let me talk about first two things that came up for me this week, and then relate it back to the harsh realities. So the first thing that came up was I was meeting with a client, this is an undergrad client, I was helping her with her statement of purpose. And as she was reworking her statement, with my support, and my guiding questions, she she said out loud, wow, I can see why they pay you the big bucks. She was so excited at the progress she was making with her statement. And she made that she just made that claim. And it made me laugh when she said that. But in my head, in the back of my head, I was thinking, If only you knew how little I'm making.

Dra. Yvette Martinez-Vu 2:25

Because here's the thing, I actually list my rates on my website publicly for the sake of transparency, I want folks to know what my rates are, before they think about working with me, so they know what to expect. And if they want to work with me, and can't afford it, they can save up for it or, you know, figure out a way to make it work, right. So I like to have it up for transparency. But what is not transparent about that rate is my take home pay, which is a lot less, it's, at most, I might take home half of that rate at most. But oftentimes it's a tiny fraction of that rate because of other things going on in my business. So that was the first thing.

Dra. Yvette Martinez-Vu 3:06

The second thing was I was scrolling through my social media platforms. And in one of them, I saw that there was a post by a single queer mama entrepreneur. So she in that post was asking for support for mutual aid support, because she realized that she was in this deep state of burnout and needed some wiggle room, we needed some support so that folks could provide her with some breathing room so she could take the time that she needs to recover. And what that reminded me of is that externally, when you see her page, when you see her platform, it seems like she's got it all, you know, like she's, she's, you know, living a great life and doing very well and making it work with her business. But in actuality, she was struggling and needed some support and was asking for help.

Dra. Yvette Martinez-Vu 4:09

And that again reminded me of like, you can see what you see externally. And you can think what you think about while this person must be making a lot of money. And yeah, in some cases, entrepreneurs do make a lot of money. That's not the case for everyone. And also, it's especially less likely to be the case in early entrepreneurship. During your first I would say maybe five years. It's really hard because you're building everything from scratch. You're trying to figure out what works, what doesn't work. Entrepreneurship is a huge learning curve because you are creating something from the ground up.

Dra. Yvette Martinez-Vu 4:47

And so for me when I was thinking about it, I was thinking about like, wow, I have not made more than what I made as a graduate student in, you know, per year, per year that I've been in my business, that's a lot to say. I mean, that's a lot to say out loud. That's the vulnerable piece of it is saying like, wow, you know, I, yes, I'm charging these rates that are rates that are appropriate within the range of what's out there and appropriate within my years of experience, I have 13 years of experience y'all like, that adds up.

Dra. Yvette Martinez-Vu 5:25

That's why when people work with me, and they see what they get from working with me and all the support that they get, what they learn, and the outcomes that they get from working with me, a lot of my clients just keep re enlisting. And I honor their rates. So if they started working with me two years ago, when my rates were lower, they're still paying that rate. Unless they decide they're in a better position, and they decide they want to honor my current rates, then, of course, you know, I'll say yes to that. But I like to keep the rate at whatever it is that they first signed up, even if they started working with me two years ago. So yeah, so there's that.

Dra. Yvette Martinez-Vu 6:03

And, one of the things that I was thinking of going back to this thought of, Wow, I have not surpassed my, my income as a graduate student, two years in business. And I've been having conversations with other folks who I know, who are scholar entrepreneurs, or academic entrepreneurs, whatever you want to call them, edupreneurs. And I'm not alone. You know, I was talking to another another, you know, friend of mine, also academic coach, she, too, she's like, Nope, I'm like, barely at my graduate student rate. Like, she's barely making what she made as a grad student. And she hasn't yet reached the salary that she made when she was in academia. Same with me, I haven't yet reached my salary in academia.

Dra. Yvette Martinez-Vu 6:53

But why is that? You're probably thinking Hold up, hold up. That doesn't make sense, right? Like you're if you're charging all these rates, and why is it that you're not making enough? A couple of things. One is, a lot of us, when we start out, we, if we're service based businesses, we're having to go out and find every single client. So literally, every dollar that we make, we're going out, you know, doing the outreach, doing the marketing, whatever you want to call it and finding clients and every single one we've got to find. So there's that.

Dra. Yvette Martinez-Vu 7:26

The second thing is that there's a lot of labor that we do that is unpaid. So any of the admin work, when you have a nine to five, you get paid for that time, you're checking emails, you get paid, you check Slack, you get paid, you update any kind of information, you're updating a website, social media, whatever your job, you get paid. We don't get paid for that. So we don't get paid, I don't get paid for, you know, like I said, the communication that I offer to my clients, and between sessions, I don't get paid anytime I'm updating my site, anytime I'm working on my podcast, working on the transcripts, working on my social media content creation. I don't get paid for any of that. I don't get paid when I send tutorials to my clients in between sessions, when I send them handouts.

Dra. Yvette Martinez-Vu 8:16

I don't get paid when I'm, you know, consulting with entities to have them hire me to do the speaking engagements for them. Sometimes we got to meet once or twice before the event in preparation for it, I don't get paid for that. You know, it's it's a lot of labor, I was writing down kind of all the things that I do. And I realized that wow, like the majority of the things that I do are unpaid things. The only things that I get paid for are my speaking engagements, my one on one coaching clients and my group coaching program at Grad school Femtoring Academy, which I'm revamping right now.

Dra. Yvette Martinez-Vu 8:54

So if you want to, if you want to learn about personal development and sustainable productivity, here's my little pitch to you to check it out by going to gradschoolfemtoring.com/academy. I have revamped it. So that way, there's a rolling enrollment, and I'm going to be adding some other things to it. And I even have a scholarship there for folks who are worried, you know, if they can't pay the rate, check out the scholarship available. It's a partial scholarship to see if that might work for you.

Dra. Yvette Martinez-Vu 9:22

But anyway, going back to, to what I was saying, which is that there's so much that I do, and that a lot of entrepreneurs in general do that's not paid. Even my book, which I'm thrilled about. I'm so excited that my book, Is Grad School For Me, Demystifying The Application Process for First Gen BIPOC Students, I'm excited that it's coming out next year, April 2024. But again, I am not getting paid too much for it. We, my co author and I, decided to go with publishing it with an academic press and academic presses historically just they do not have the funds to be able to to provide, you know, a paycheck that would be comparable to what trade presses would pay you. So you get paid very little, if anything.

Dra. Yvette Martinez-Vu 10:12

And on top of that there are expenses that you have to pay out of pocket. If you decide to hire an editor, you gotta pay for that out of pocket. It's also a requirement in, you know, in our case, to hire an indexer. And guess what, you got to pay for that out of pocket. That's 2k right there. And then you gotta, you know, we decided we wanted to offer a very small stipend to thank every single contributor of the book, every single person who submitted a sample essay that we featured in the book, we are going to be paying them a small stipend. So I'm like, okay, well, there goes the advance. Right, so a lot of things that you're not getting paid for. So I spent, you know, all of last year writing the book, and then you know, a good amount of this year doing revisions and edits with my co author, that's a lot of time and energy. That's not necessarily paid for.

Dra. Yvette Martinez-Vu 11:10

Anytime I have meetings, whether they're consultations, networking meetings, anytime someone requests an informational interview, anytime, you know, if it's a meeting someone new, or whatever it is any meeting, even a meeting with a friend, you name it, if it's during my work hours, I'm not getting paid for it. If I get sick, I don't have sick leave. If I get sick, and I have a coaching call, and I don't take it, I don't get paid. Like I just I don't, I don't get that. I also don't have benefits, you know, with being an entrepreneur. At least now where I am in my entrepreneurship journey two years in, I got to figure out health insurance on my own. That was a big reason why I decided to move abroad to begin with. And now that I'm back, I'm having to figure that out.

Dra. Yvette Martinez-Vu 12:02

Right now, we are a low income family. When I talk about like being low income, I'm with y'all. The difference though, is that I do have access to financial literacy, I am aware about personal finances, I know what I need to do to reach my financial goals, and I'm working towards them. So I know this is a temporary thing. And I have a plan in that I'm executing so that if I don't reach certain goals by certain dates, I might go back on the job market. Or I might just brainstorm and get creative on other ways to generate income to meet my goals. That's the difference. And that's a big difference. So I acknowledge that privilege of having access to financial literacy is a privilege. But I am also low income, I do qualify for different health care plans because of our low income status. And so that's what I'm having to deal with. I gotta pay my own operating expenses.

Dra. Yvette Martinez-Vu 13:00

When I said earlier that anything that I charged the most I take home is 50%. Why is that? You're like, wait, why? It's because the other 50% I need to have to be able to pay taxes and my overhead my operating expenses. When I say that I'm referring to all the things that you get when you are a student or an employee. Those are the things I have to pay out of pocket, I've got to pay for my subscriptions, I've got to pay for a zoom, I've got to pay for my bookkeeping, bookkeeping software, I've got a pay for the software I used for all of my graphic design, I you know, every single thing that I use regularly, my transcription services for my podcast, my website hosting fees, everything I pay out of pocket. So yeah, it's, you know, 25 to 30% of my whatever I make goes towards taxes and then the rest, you know, 20% or so goes to my operating expenses.

Dra. Yvette Martinez-Vu 14:09

So that's why things get slashed really quickly, like I you know, was doing the math and I thought to myself, hold up, hold up, if I'm, if I'm charging, let's say right now $125 an hour and I'm only taking home half of that. So $125 divided by two is $62. But then I'm you know, gathering materials prepping for the meeting less and prepping for my meeting beforehand. I ask a client send me your materials I'll review them before we meet. That might take half an hour to an hour. afterwards. I say okay, I'm gonna record this tutorial for your I'm gonna send you this resource that takes another half an hour to an hour that could be up to Three hours that I'm spending on one client, let's say two to three hours, so two hours. So all of a sudden that $62, you're divided by two, then I'm making $30 an hour. If it was, you know, three hours that I spent working on supporting a client, and I'm only with them during that one hour, but I'm doing work outside of that one hour, an additional two hours worth of work, then all of a sudden, I'm getting paid $20 bucks an hour. So just keep that in mind.

Dra. Yvette Martinez-Vu 15:30

I'm trying to be more aware of these things, because I need to be able to reach certain goals so that I can keep my business, you know, a sustainable business. So I can keep it up long term, I don't want it to just be this project that then if it doesn't work out, I just decide to let go of it. No, I would ideally like to keep it for a long time. It's a long term game for me. And just like I talk a lot about sustainable productivity, I talk a lot about sustainability, I talk a lot about being able to do things, not just in the short term, but in the long term. That's what I am figuring out to, for myself in my business with reaching my financial goals, because there's a lot that I do. And it relies on me working a lot. And the good majority of what I do is I'm not getting paid for. So just a heads up, I wanted y'all to have this awareness, I wanted you to know that, like every single dollar that I'm currently making, is I'm having to go out and seek it.

Dra. Yvette Martinez-Vu 16:39

I currently don't have any passive income opportunities, although I am working towards that. And that may help to offset all of the work that I do that is unpaid, that will help to kind of lessen the gap between the unpaid hours and the paid hours. The other thing I don't have is help, I did work really hard to save up so that I could have a VA for a while. And I did have a VA, actually at the beginning of this year. But I you know, crunching my numbers, I realized, you know what, I cannot do this long term, because I need to be able to feed my family. And so, you know, I was very, very upfront with my VA and gave them you know, three months notice even supported them in identifying other opportunities that were comparable to my VA opportunity. And so we're in good terms, at least I'm pretty sure we are so, so grateful for that support that I had during the time that I worked with my VA, but now I don't have one. And I'm doing everything on my own. I'm a one person show for now.

Dra. Yvette Martinez-Vu 17:50

And that's kind of what's going on. I guess I was, you know, a little bit, not, the word is not triggered, but I was activated by that statement that that client said like, oh, you know, you're getting paid the big bucks, because on paper, it might seem that way. But you never know what's going on behind closed doors. Someone might seem like they have their life together. But you know what, you don't know what's going on behind closed doors, some relationships might seem like they're the perfect relationship, you don't know what's going on behind closed doors. So the same, you know, is true about me.

Dra. Yvette Martinez-Vu 18:30

I feel like I'm actually doing really, really well in other areas of my life. I feel like my mental health is really good. I'm doing a lot better with managing my chronic illnesses. I have reached a lot of really incredible personal and professional milestones, I really do feel like I am aligned. And that was my word of the year this year. I was like I want to be in like, I want to realign, I want to be in alignment. And so I've pursued things and taken the risks and have to have had to quite literally pay the costs of of being courageous and trying new things. And now I've arrived at a place where I'm like, Yes, this feels really, really good. Now I just have to make sure that financially, things make sense to so that's kind of my, that's the episode I feel like it's a part rant, part talking about the harsh realities, because I do think it's important to talk about the good, the bad, the ugly about all kinds of topics related to anything that someone who is pursuing higher ed might be interested in.

Dra. Yvette Martinez-Vu 19:44

And I know that entrepreneurship is highly romanticized. A lot of folks actually I'm about to give a talk to this group of academics who are in a group program interested in leaving higher ed. And so a lot of them are actually considering leaving higher ed and they're starting their side hustles. So they're starting a business on the side while they still have their higher ed salaried jobs. And I, this is the kind of information I want them to know, I want them to know, you know what, it looks really, really great on social media, it looks really, really great, you know, surface level, there's always, you know, some sort of facade, but when you get through, as you see behind the curtains, it's not always as great as it seems.

Dra. Yvette Martinez-Vu 20:33

I don't regret pursuing entrepreneurship. I'm still at a, I don't plan to stop anytime soon. I really do believe in what I do. And I feel like I'm at the cusp of this, this growth, I think that 2024 is going to be this year of growth for me, especially with my book coming out and other things that I've got going on, behind, again, that I'm not talking about publicly quite yet until I'm done with those things. But yeah, it's not easy. It can be harsh, you know. The first couple of years, you know, having a nine to five is also not easy having a nine to five. You know, for for some of us, it's just not sustainable.

Dra. Yvette Martinez-Vu 21:18

But if you decide that you want to pursue entrepreneurship, please know what you are signing up for. Look into it, talk to folks who are doing it, and have a plan. That is what helps me with anything that I try to do any goals that I try to reach as I always try to have a plan. I always try to be a couple steps ahead of things. And as soon as I reached the the danger zone, or the red line for anything, the danger zone with my health, that danger zone with my finances, the danger zone with you name it, any other area of my life, I have that plan B of like, if this doesn't work out, then the next thing I'm going to do is x and so that's what's that's what I'm still kind of working towards is working towards my goals, If I don't reach them pursuing the plan B and then getting back on, you know, either modifying my plan, or you know, trying it out through a different, different means.

Dra. Yvette Martinez-Vu 22:18

That's it for today's episode, I wanted to give you more of a behind the scenes look on what it looks like to be an academic entrepreneur, from a financial standpoint. And if you or someone you know is, you know, pursuing entrepreneurship, please, please, please, you know, let's support one another. It's not easy. Do what you can even if you can't financially support someone, share their business, refer them to a friend. Anything that you do to support helps. Okay, thanks so much, y'all. I'll talk to you all next time.

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