The Side-Hustle Dad

Ep33
===

Why This Episode
---

​[00:00:00]

Bryan Steele: I know last week I promised you an episode talking about side hustles versus gig economy, and we're gonna compare that, and we are totally gonna do that, but I'm pushing it to next week because as I was preparing that episode, I knew something different needed to be talked about today, and it's a mentality behind the side hustle.

And one of the things that I'm hoping to give you through this entire process is some confidence and freedom. So rewind with me ~for a, ~for a bit.

Recession Wake Up Call
---

Bryan Steele: Before I ever started a side hustle, it's 2008, 2009. It's the middle of the financial [00:01:00] collapse recession of that time period, and I had a day job. I was an engineer working a nine-to-five.

It was my source of income, and they sent out that email probably it felt like once a week, but it was every, you know, couple of months, "Hey, we're having to make workforce reductions. We're having to make some changes for the business to survive." And I remember at that time just being terrified 'cause I'd only been out of school a little bit, couple years, and so I'm one of the young employees at the company.

And I remember just that uncertainty, that fear that welled up, and there was nothing that I could do about it. These are things beyond my control. Even people who were really, really good at their job were being laid off and let go during that time period. I remember being around my other coworkers, right, on the layoff day.

We would sit together, stand around going, [00:02:00] "It's gonna happen. Some of us are gonna go." And by the end of that day, several in that group had lost their jobs. And that terrifies me. It terrified me at the time. I had recently bought a house, and I'm like, "Am I gonna lose the house? How am I gonna stay where I'm at?

How am I gonna pay the bills? What's going to happen to me next? Am I gonna be able to find another job?" Something that people say is starting a side business is risky, it's uncertain, but I think a lot of times people miss how much uncertainty can exist in a W2. There's a lot of things that suddenly can change and transform when that sole source of income changes.

Is Business Really Risky
---

Bryan Steele: So today, I wanna talk about the side hustle and is it as risky as we really think it is? Is it really as uncertain as we think it is? So [00:03:00] One of the things that's most common is everybody thinks starting a business is risky. Where did that fear, where did that perception come from? You might lose money.

If you start a business, maybe you have to buy some equipment to get started. Maybe you're wasting time that could go to your family. Maybe you're failing in front of friends or family members, 'cause now you're doing something public that they get to watch you try to build. You're not anonymous in a cube anymore, and it can create stress on a spouse because she doesn't know what's happening next.

Now, in other episodes, we've talked about how to mitigate some of these things, creating boundaries around your side hustle to make sure you're carving out appropriate time for your family, for your spouse, so that there's a plan that you're on board together with this. But this is what happens. These are the fears and things that come up regularly when people talk about starting a business.[00:04:00]

Most of us are raised on you go to school, you get some education, whether that's a trade or college or degree. You get a good job that provides healthcare benefits, a retirement package, and boom, you're set. It is safe. That is the safe path. If you try a business, it might fail, therefore, that is unsafe But what if we're really looking at it wrong?

What if we've been measuring things wrong the whole time?

The Real Risk In W2
---

Bryan Steele: So we talked in episode two about getting your spouse on board, some of those things, but today we're gonna get into where the risk really is The point is not how bold a business looks, it's about how much rides on the one thing that you don't control, which is your day job, your W2.

You don't have as much ability to influence the outcome of the business. [00:05:00] I'm sure you've been there. You go, ~"I, ~I work hard, but it's ultimately not changing where the stock price is going for this, this corporation. I'm just a small cog in a giant machine." And you probably do great work. If you're listening to this podcast, I'm pretty confident that you do good work that your employer values and that benefits them, but you're a part of a giant machine, and the company having success is dependent on all those pieces playing their parts as best as possible, which means you don't control success or failure by yourself.

There's layoffs, there's mergers, there's acquisitions, a new boss, a bad quarter, restructuring. All of those things happen, and they have nothing to do with what you bring to the table, and it can dramatically impact your future at that company. In the past, you know, loyalty was a big deal. You would stay in a [00:06:00] business 15, 20, 30, 40 years at a time.

Obviously, in the last, you know, couple generations, that's changed a lot. The average tenure at a business has gone way down, so people are constantly looking for, for new opportunities and better opportunities. But just as much as the loyalty has dropped on the employee side, it's also ~ha- ~happened on the employer side.

If things get tight, they've gotta make a quarter. Their objective is to make their stakeholders or shareholders happy, and they're gonna do everything they can to make sure that happens first. Now, that's not to say it's an evil process or they hate everybody. It's just the reality of how decisions get made ~and who is highest on that list of priorities.~

~This isn't a, a... And, and in this... Let me go back~ And who is the highest on that list of priorities? Not to say that capitalism is bad. It's benefited tons of people, and if you are a side hustle dad, it's likely benefiting you as well. But just as there's a good side to [00:07:00] our endeavors, to our efforts, there's also a flip side to it as well in that sometimes it causes decisions to be made which ultimately hurt some other people in the process.

Side Hustle As Diversification
---

Bryan Steele: So even though it might feel safe sometimes, jobs can be very uncertain, and that's why I think a side hustle is important, not as, you know, just you being able to achieve your goals, but it's also diversification. If you have a side hustle that makes five hundred or a thousand dollars a month, is it crazy money?

No, but it is a little bit of something. It's a little bit of diversification, making some extra income that you don't have to worry about, similar to having, like, a rental property, right? If you have a rental property rented out, you're getting some income from that. You're not a hundred percent dependent on your day job, and that diversification gives you some flexibility [00:08:00] you wouldn't have otherwise, right?

If you get laid off from your job, you're hoping that the larger economy isn't suffering as a whole, and it's gonna be super difficult to find a job. You're hoping that somebody out there is gonna be able to give you an opportunity and that you're gonna be favorable when you're competing against other people for those roles.

With a side hustle, you've got options and flexibility to fall back on. It's making you some money. Maybe you can even ramp up your effort for a limited time period to even make more. But don't necessarily look at it as, "Oh my gosh- This thing could fail and it would be bad. The side hustle and the reason why we started it on the side, and the reason why we didn't leave our day job, is because it gives you the ability to fail and it doesn't crush things.

If you're running it on the side, you have opportunities to figure out how to learn sales, how to figure out marketing, what is your offer, what is your pricing? And you [00:09:00] have the room to make mistakes or undercharge or overcharge, or make a bad client and get some bad reviews and still learn and grow and recover because you normally have that day job.

And as it gets better and improves, it gives you that flexibility, it gives you that freedom. So if the worst were to happen with your day job, you have something now to fall back on because you've got that diversification. If you're only in a W2 and you lose that job, you're starting from zero. Now, obviously, there's unemployment and things like that, that, that you can apply for and get, but you're starting from scratch.

You're looking for a job coming in at the ground floor. If you've got that side hustle, you've got time.

Freedom And Leverage
---

Bryan Steele: You can maybe cover a little bit of your bills a little longer, maybe even wait a bit longer to find that next dream job that you really want because of the flexibility So what does the side hustle give you?

[00:10:00] One, you're not desperate. You can hold out for the next job instead of just grabbing the first opportunity that comes along. You're not starting from zero. You have customers, a system. You have proof. If you've been following along the episodes and have been growing and thinking through how to add value, you've got something that you can offer others.

You've got skills and a network outside of the company you work for. In addition to the work you're getting, now you've met people outside of your day job who know you, who like you, who trust you, and if they know you're looking for a job or a new job or a new opportunity, they've seen how you work in the side hustle.

They may be willing to put in a word for you at some job that they've got open that you might be a fit for. They could even be unrelated roles, but because of the values you exhibit in the way that you work on your side hustle, they're willing to vouch for you, and then [00:11:00] you can leverage at work. You negotiate differently when one employer isn't your only option.

~So scarcity isn't one big income. No, sorry. Go back. ~Security isn't one big income. It's having more than one income and the flexibility to manage change as it happens because life always is gonna throw us some wrinkles. Things are always going to change, and now ~you have a b- ~and now you have the ability to manage that more effectively because you've built a side hustle business.

Shrink The Downside
---

Bryan Steele: So how do we shrink the risks of starting, right? We talked about the perception behind the risks, but how do we really manage them? How do we get into the side hustle, keeping those risks manageable? So first is the obvious one. We're not leaving our job. This is intended to be a side business. You're wanting it to exist on the side.

You don't want it to interfere with your job, so you're going to [00:12:00] create boundaries that allow you to work in it on the side. ~There's...~ You can, we talked about it before, create a stop loss number, right? You're going to test it out. You're gonna put ninety days, a hundred and eighty days into it. You ~n- ~discuss that with your spouse.

You come up with a plan. You say, "I think this could be really valuable. I think it would be something that would benefit others, and I think people would hire me for this." Test it, learn, and if it doesn't work, you just cut your losses and move on. The problem I see people get into is they think that when they business shuts down, they've failed.

You fail when you don't try. That's what I'm always trying to reiterate to my own children. Like, the people who fail are the ones who don't get out of bed and go dare and don't try something that they've never done before, who don't attempt something they've never done before because they're afraid of not being good at it.

Newsflash, nobody's good when they start. They start at the entry point. They start as [00:13:00] beginners. But until you start trying, you don't know what's possible. So I always hate that people would think, "Oh, I'm not gonna be good at that, so I'm not going to try." Take a risk, take a chance, because you never know what's gonna happen.

And if it's not working out, that's fine. You've tried, you know. You don't have to doubt and wonder in the back of your mind if it would have worked. You've tried it and you've tested it out.

Start Lean And Get Paid
---

Bryan Steele: Start lean. Don't go get a bunch of loans. Don't throw a bunch of money into this. Determine what that minimum viable product is and offer that.

What is that service? Bootstrap it. Be lean. What's the quickest way to success that you can achieve and get customers? Start there. Don't go too big too fast. Build something that's manageable. This is not a new career you're trying to start. You're trying to build a small little business with attainable goals.

So start lean. [00:14:00] Don't overextend yourself. Now, you might need some equipment and maybe put some money into it. That's fine. Just don't go crazy. And then separate the money. Put it in its separate bank accounts. It doesn't get confused. We talked about this on the tax episode. You need a separate bank account so everything is easy to track, and you really can see very quickly how much money is coming in, how much money is the business having to spend, and is this profitable?

Is this benefiting us? So make sure you have a separate bank account. And finally, get paid up front. If you're going to offer services, at least get some form of a deposit from any client or customer. ~Don't, ~don't go throw out a bunch of money when you haven't necessarily got the commitment or payment from clients that you're going to be working with.

Failure Is Feedback
---

Bryan Steele: So remember, it's okay if it fails. There's nothing wrong with a business failing. My wife and I tried a T-shirt business. We thought we'd sell some humorous T-shirts online through drop shipping. [00:15:00] Didn't work. We tried it. Didn't work. We weren't good enough at marketing, didn't know how to get in front of the right customers.

It failed, and that's okay. We moved on. We cut our losses. We said, "Here's how much we're gonna put into this. We're gonna try it, and if it takes off, great. If not, eh, it's okay." Not everything has to be a success, but we know we tried, and we said, "This isn't really for us." My family needs me.

Protect Family Time
---

Bryan Steele: We've already talked about making sure we set boundaries for our side hustle to protect the time with the family.

So maybe this results in some early mornings, some late nights, but the goal here is not to fill every extra hour of the day. The goal with the side hustle should be, what are those times I can really capture? What are those times I'm wasting? What are those moments I'm wasting in a day that could be more productive for the benefit of my family?

The whole reason we're doing this is to benefit our [00:16:00] family and ourselves. We should not be sacrificing our relationships and our time with them. You don't have to have 20 hours to make this work. You need five, right? Start building a business on five hours a week. Find out what it is that you can do, determine that, and start there.

Reframe Risk And Wrap Up
---

Bryan Steele: So you might think the day job is safe. It might feel safe. But I can tell you from my own experience, it's not necessarily the case. Things outside of your control can quickly take that great job away. So don't view a side hustle as some big, risky endeavor that if it fails, you're a failure. You have to look at it as diversification.

You've got a good job. You've got something that pays the bills. Now you're gonna build something extra that can help you, you know, get out of debt, can help you achieve some goals, go on a vacation, pay for [00:17:00] your kids' college education. You've created something on the side, and now you're diversified.

You're not just dependent on this one job for everything. If something were to happen, you've got somewhere to start from that is not zero, and that, I think, is incredibly powerful. So I hope this helped you reframe the way you think about a side hustle as far as risk goes. And then when you think about your customers in the side hustle, you don't just have one customer.

You might have 10 or 20 or 30, maybe more customers than that. You're diversified amongst multiple people. So even in the business, you're not, you know, hurting if one person says no, because you've got other customers to work with. So it's diversification, and that is really the opportunity that a side hustle presents.

Next week, as promised, I'm gonna be getting into talking about gig economy versus side hustle, how I [00:18:00] think about them, and which ones I think are most valuable. You might guess which direction this is headed. But I look forward to seeing you in that conversation. Until then, take care.

​ [00:19:00]