Easter weekend is now over, get your business going by July
Author- Daniel J Bockman
By the first part of July of this year you could be making money in your new side hustle! I understand that the scorched earth approach to business is not for everyone even though it’s how I got my business started. Most people like to start slow and methodical and keep their day job while starting a new side hustle business to have the security of income. I still think quitting your job and going full time as fast as you can is still better than side hustles but a lot of people have been asking me to do an article on this.
Eventually you want your side hustle to be your full time business so it’s important that you get off on the right foot from the perspective of someone like me that is already doing it full time. I get it, being in business for yourself is scary and intimidating. This is why you want to do it part time for now until you get your feet on the ground. Let me assure you, side hustling can be just as hard or… maybe harder than a full time business! But it is a safer way to start.
A lot of side hustle business do not make it. Family, life, and working a day job can prove too much for some people. Well over 65% of all new business fail in the first 3-5 years including side hustles.
My experience and perspective will give you a real advantage in getting your side hustle going in the next 3 months. Here are the step you will need to take to get your side hustle going in the right direction.
1. Build a schedule that is realistic
When starting a side hustle, you are juggling your personal life, family time, day job time, sleep time, and your side hustle all at the same time. (Told you it might be harder) This can be a real drain on your psyche and body if you do not get this right. You do not want to look like you are grasping at straws especially in front of your new customers. Build a schedule that budgets out all of your time so that you can efficiently work. This is where full time entrepreneurs have the advantage. We have nothing else to do but run our businesses and family’s. (Just a little something you get to look forward to!)
2. Do not take on too many customers at first
One of the best ways to budget your time at first is to only take on as much as you can handle. This can be a really hard impulse to overcome but if you take on too many customers at once, you will need to sacrifice time in either your day job, personal, or family time. Keep things simple and take on just enough customers to actually be doing the business but not so much that you are swamped. Remember, you can always take on more as you grow and once you become full time.
3. Don’t let your day job suffer
A side hustle is very exciting and can consume your mind. This is good, you have a dream and want to realize it! But be sure you are staying focused at your day job. You are doing this part time for the security of the day job so do not jeopardize it. Staying focused on daily tasks throughout your day is good practice for when you are finally full time self-employed. Once you are really in the game, you will need focus skills that can create amazing work. Manage your focus wisely.
4. Meet with your accountant or attorney
Schedule a meeting with your accountant or attorney if you have one. If you do not have an attorney right now, be sure you get one once you are full time. They will be your registered agent – very important! You will need to register your business with your Secretary of State as an LLC, S Corp, Inc., etc. Tell your accountant what your plans are and how you plan on running this business even as a side hustle. They will tell you how to register your business with your state’s Secretary of State Office an if you even need to register. Some freelancers do not need a business structure like and LLC.
5. Register with Secretary of State
Go on to your states Secretary of State office and file for a new business structure. This is very easy and will only cost you about $200. File for the business structure your accountant or attorney advised you to file for. This might take a week or two for the SOS office to do a name search and make sure your business name is valid in your state.
Each state is different but this is generally how it works.
- go to your state’s SOS site
- select business
- select forms
- select file for new business entity
- select type of business (LLC, S Corp, INC.)
- Begin filling out the form then pay the fee
6. Get a tax ID number
Go to the IRS website at irs.com and get a tax ID number. Select the Employer ID Number tab at the top. Then select your type of business and fill out the form. Again, this is super easy and instantaneous. Unlike the Secretary of State office where you have to wait, The IRS will issue your number right then. You tax ID number will be needed when filing for loans, filling out W9 if you contract your services, and for filing taxes. It’s much better than using your Social Security Number.
7. Use all the free stuff first
Running any size business is expensive so use everything that is free first. Free social media is a great way to start out. Once you are making some money, and can afford Facebook Ads, Instagram Business, or AdWords, you can use those paid mediums. I suggest going free with all of your advertising first. Also this is a great time to build your brand. The difference between branding and advertising is this: Advertising is yelling out to people and saying, “Look at me” or paying someone to tell people to look at you. Branding is working on your business so well it gets notice organically and people gravitate to it on their own. Naturally branding is my favorite and the best way to do it. Building a brand is not free but it’s much cheaper than paying for advertising and far more effective.
8. Build your own website.
The last time I had a marketing company build me a website, the final invoice was $10,500. I could have paid for the tuition of some kid to go to a 2 year college and get a degree in website building for that money. And then just hired him myself! Building a website is so easy these days and the how-to tutorials are infinite. WordPress, Wix, and others are virtually plug and play these days and they are beautifully designed. You can also use Etsy or Shopify to run your business if you are in sales of merchandise. I prefer WordPress but if you’re not used to the platform, there can be a learning curve. Here is a good link to learn the basics of building a WordPress site
9. Pricing development
I always tell newbie entrepreneurs, “Don’t be afraid to make money!” All too often, new business people short sell themselves just to get into the game but find out later they are struggling to stay alive financially. Build your prices so you will make money. Here’s a good rule of thumb- If your products or services are premium, price them at a premium! If not, then price them accordingly. If you sell products, then there will be a percentage markup to sell retail. If you build things and need materials, materials are generally marked up by 2.1 times. Do your research for what is a good price for what you do. Warning- if possible do not get caught up in commodity style price wars. Once you get your customers hooked on sales, or “buy now and save”, there is no bottom to this abyss!
10. Side hustles have a bad stigma
As a side hustler, you will be faced with commitment issues in your business. Especially from your customers. For customers in the “I want it now” world, it’s hard for them to hear that you only do this on the weekends and evenings part time. Having a full time day job really limits your time and customers will want your full attention. When a customer can get someone else who is fully committed to their business, you are going to need to strategize in a way that makes the customer realize you are worth the wait.
The best way to do this is to only take on the number of customers you can handle and still deliver on a great product or service. No one likes the part time handyman that only shows up once a month to work on your bathroom because he’s working a day job and working on 6 other bathrooms on his side gig. Focus on giving authentic time to a select few customers. Your reputation is worth the loss of more customers!
Also, appeal to your customers good nature. Most people love a success story. Really sell the fact that you are part time and trying to make this a full time business. Show them that you are sacrificing family and free time to get this thing going. People like to be a part of something and they can say they helped you get your start.
11. Don’t be afraid to turn down customers
Again, managing only what you can is the best but this can be very hard especially in a world that is in such desperate need of good businesses! You will find that business and new customers will be coming at you with breakneck speed if you are very good at what you do. This is good, and what you are working for. Word will start to spread that you are the new young superstar and you are worth the money and the wait. If you build it, they will come! But there is going to be a time when you have to turn down customers. Believe me, saying “no” to a customer that you do not have time for will bring you more success than most anything else.
12. Pay yourself first!
Most people go into business not knowing how to make money. They enter the game and hope they make money by seeing how it plays out and respond accordingly. But I prescribe to the school of thought that you prepare to win at all things including money and business. Most people were taught basic accounting practices by balancing their checkbook or bank accounts where, income – expenses = profit. Unfortunately, this accounting practice is why so many people are in the 99% income and even worse, many businesses still today use this outdated accounting practice. It’s far better to profit first, then pay your bills with what’s left over. I know this goes against everything you’ve learned but stick with me here. I make a lot of money in my business using this profit first accounting. Profit first is CAP accounting Current Allocated Percentages or where profit – income = expenses. (confused yet?)
Here are the basics behind CAP accounting. You will put your financial information into a formula that will tell you what percentage you should pay yourself first, what to save for taxes, and how to use the rest to run your company paying expenses. The real juice in CAP accounting is even a failing or struggling company ends up being profitable. Here is an example to get you excited about this. If I would have known about CAP when I first started this is what my first year would have looked like. I booked $530,000 in my first year’s total business. My CAP percentage turns out to be 10% to pay myself. I would have profited $53,000 in my first year. Since I didn’t know back then, that is not what happened. Now my company book far more business than $530K per year and I use CAP accounting. This has made me very successful!
Keep in mind, this is just my business profit on a simple year of sales. This does not include the wage or owner draws I pay myself. This is just pure profit to accumulate over time year after year.
To learn CAP accounting and how to use the formula, get Mike Michalowicz book Profit First . This $15.00 book has made me a fortune in my simple business!
13. Business in the post pandemic world. (You are the lucky ones)
If you are starting your business now, you are lucky that you get to start in the post pandemic world. You have seen the effects the virus had on businesses and now you get to preemptively prepare your business for the post pandemic business culture. The rest of us that have been in business for a long time had to learn on the fly and many didn’t make it. I had to really reach deep within myself to lead my company, my family, and my employee’s families through the tough times of 2020. If you are starting today, you have the advantage and you will be successful because you have had a firsthand peak into what businesses need to do to be successful post Covid.
14. Avoid employee brain
One of the biggest dangers of side hustles is what I call “employee brain.” Employee brain is when you bring your experience of being an employee into the world of being a business owner. These two worlds couldn’t be more different! The biggest problem is that most side hustlers think like an employee rather than thinking like a boss or owner. This is understandable because after all, you are working as an employee while trying to start a business. Work to train your brain to think like a business owner. Think in terms of value and be willing to lose some battles to win the war. Do not focus on the money, focus on the impact and creating something amazing. You can get more help with this by emailing me at email@example.com I can really help you with developing your “business brain”
Lastly, here is my advice when starting out on your new side hustle. Keep in mind that this is just business. Do not make it more difficult than it already is. Keep it simple and be consistent. Michael Jordan couldn’t fly though the air because he was talented, he could fly through the air because he was consistent on his training and work. You are going to have failures and lose money along the way. You will make mistakes and miscalculate your operations. But it’s so important that you do not quit no matter how bad your failures are. Do not panic and proceed with intention. Learn from your mistakes.
Being an entrepreneur is the freest thing you will ever experience. Right now you are thinking small by keeping on with your day job and that’s okay. It’s smart and responsible especially if you have a family. I am a special case unlike most people. I lost my job and had to start my business to survive. I also do not possess the fear gene so I risk greater than most people. But a lot of you might be in the position I was in and lost your job during the pandemic. This is the perfect time to start your new side hustle that will eventually turn into your full time dream!
I was once asked if this was a good time to start a business. I said,
“There is never going to be a good time to start a business so… there has never been a better time to start than right now!”