The 40-40 Club is closed. The idea of working 40 hours per week for one company for 40 years is dead. So is the idea of climbing the corporate ladder and working in a cubicle. The world of work has changed. Companies aren’t loyal. I’m not even sure where we got the idea that they should be loyal. This isn’t marriage. They are loyal to one thing…profit. Some companies see their people as the path to profit. Others don’t. But keep in mind, that the most ideal company is a company with one person who simply has to push one button once a day to make profit. Therefore, if a machine can replace a human being, it eventually will. So what is your value beyond rote tasks and paper pushing?
With BIG companies doing massive layoffs at all levels, the high unemployment rates, depressed wages, and globalization, you have to start hedging your bets when it comes to how you make money. No matter how much money you make, having only one source of income is dangerous. The reason is because our cost of living usually rises with our income. When we make more, we tend to spend more. We get that bigger house, that nicer car, have a few kids, eat out more, etc.
So even if you’re a lawyer making $150K per year, but your cost of living is $130K, you really don’t have any financial freedom and the downsizing process is harder than people think especially when the most important thing to downsize will likely be your home because of your mortgage and interests and then trying to get rid of all of the stuff that’s in it. No fun.
To diversify their dollars, many people invest in stocks. That’s great, but you have no control of when or how they grow. For many people, stocks are just a form of gambling and luck without the fun and excitement (unless they go up of course). You might as well put $50K on black in Vegas and see what happens. It’s 50-50. I remember growing up, we were taught that stocks tend to go up at 10% every year. Well guess what? The Down Jones, S&P 500, and NASDAQ have only grown 8.72%, 8.22%, and 9.59% in total between December 31st 1980 and December 31st 2012. That’s not a good look.
When we invest in stocks or leave our money in a savings account (interest rate is 0.01%), what we’re saying is that we don’t have power, capacity, smarts, and belief that we can get a greater return that stocks and banks using our own gifts, talents, strengths, and skills. Let’s say you’re that lawyer who makes $150K per year. To earn an additional 10% that year would mean making another $15K. So if you could find a way to make an additional $41.10 per day, you could do that. How is it that your billable rate for the firm is $500 per hour, but you don’t think you’re worth at least $42 per hour without them? If you used your existing skills and relationships, you could probably make an extra $15K by doing some copyrights, trademarks, and contracts for 10-20 clients on the side.
In the Side Hustla Seminar, we talk about The Other 4.0 or Your 4 Capital which are you personal, intellectual, social, and financial capital. These four capitals are what will determine your professional success in life. Rather than viewing your employer as something that is in the way of making your side hustle your main hustle, you can use them to grow your four capitals so that you are better positioned to succeed at growing your side hustle.
So here are 10 reasons why you should have a side hustle no matter what.
1. Your Bills Are Paid
The number one fear new entrepreneur have is failing professionally and personally. Professional failure is creating something that nobody wants and is therefore unsustainable. Personal failure is not making enough money to pay their basic bills like rent or mortgage, car note, cell phone, and food.
If you start your business as a side hustle and your main hustle aka your job is paying you enough satisfy all those need, you’re not worrying about money and operating from a mindset of scarcity. Instead, you’re building your business from a place of abundance. The focus isn’t on what you don’t have or might not have. The focus is on what you do have and what you might get. That’s a healthier place to build a business from. While having your back against the wall sometimes can be motivating, for a lot of people it is fear-based and there are other ways that you can intentionally motivate yourself that aren’t fear-based such as the 30 Day Do It goal setting model.
2. You Don’t Have To Beg Or Bargain
For a lot of full-time entrepreneurs starting out, getting clients is everything and there is a tendency to lower their prices to get customers. Because they are new to the game or on their own, they are willing to get a customer at any cost. So they might get 100 clients and $50 instead of 50 clients at $100. Option two is usually better. There is a price to get in the game and then there is your actual price. Too often, new entrepreneurs start at the “get in the game” price and they get stuck there.
For a side hustla, you never have to beg or bargain because you have a fallback. Your job. Therefore, you don’t come off as needy. You have the power. If a customer isn’t willing to pay you what you’re worth, you have the power to say “No” and keep it pushing. There is no loss to you and the potential customer has to wrestle with being back at square one.
3. You Can Leverage Your Employer’s Brand
Imagine that you meet two accountants—one is just starting out and the other works for a Big 4 accounting firm, but does taxes on the side. Who would you trust as a vendor more?
Many people would trust the employed accountant because their employer’s brand suggests something about who they are and what they do that gives them credibility. They probably had to go through a rigorous hiring process, get trained, and have dealt with situations bigger than mine as the customer. If such-and-such company has hired them, they must know what they are doing. I don’t know either guy, I’m going to go with this guy because I recognize his employer’s name and I feel like I’m getting Fortune 500 quality work.
Knowing this, you can use projects you’re doing at work to create case studies and stories for what you do as a side hustle. I’ve found that side hustlas are usually the highest performers in their main hustle. Excellence is part of their DNA. They aren’t trying to leech of of anyone. They see their employer as their biggest client, but not their only client or only source of income. And as a result, they do their best to service that client at a high level because the quality of work they do there becomes part of their brand even if they eventually create another brand.
4. You Create A Womb For Your Business
Just like it takes an embryo 9 months to become a baby, it takes a startup time to be full formed and ready to breath on its own. For a side hustla, the womb is your day job.
Half of starting business is not doing the business. A lot of things need to take place before your spring into action such as research, branding, interviewing, testing, website, networking, build trust, case studies, learning first. All of these these things are part of the 9 Side Steps and you can do these things while working. They don’t require 40 hours a week.
Researching yourself internally and testing your ideas externally are critical. It’s a lot of information from books to TED Talks to surveys to interviews that needs time to digest so that you can engage in right action when the business is ready to go rather than hard work. Side hustlas can do all of this refinement of their ideas while still working a full-time job.
Also know that half of running a business is not client facing. When you look at athletes, they practice more than they actually play. A lot of new entrepreneurs find themselves bogged down by the paperwork, selling, marketing, and operations of their business that they didn’t know were necessary. These things stop them from doing the work they were truly called to do unless they find the right people or technologies to help them.
5. You Use Time More Efficiently
Have you heard of Parkinson’s Law? Parkinson’s Law states that work expands to fill space and time. So if I give you 60 minutes to take a 30 minute test, you’ll take 59 minutes. But if I give you 30 minutes, you’ll only take 29 minutes and your results won’t change. The insight here is that more time doesn’t always mean better results. The key is to identify what is the right amount of time needed to give your best effort.
In high school, I played sports and I found that my GPA was higher in season than it was out of season. How does that happen? I was using my time more efficiently because I had less of it. When you are starting a business, you don’t need 40 hours a week yet, so don’t quit…yet. If you are starting a side hustle to ultimately become a full-time entrepreneur, quit when you’ve reached some sort of financial (resource) or time (capacity) goal. Don’t go cold turkey yet because it might make you less effective.
6. You Minimize Your Risks
When people hear the word entrepreneur, they assume that it’s a person who loves taking risks. False. A great entrepreneur’s goal is to take the risk out of the existing business. However, we don’t allow the initial risks stop us from pursuing an idea we believe in. We are risk takers, but we are taking the risks out of the business to make it sustainable.
If you start your business as a side hustla, it is essentially entrepreneurship without all of the risks. You don’t have to risks not having health insurance, not having income, not being able to find customers, not being able to pay your bills, not finding investors, etc. You and your family are still safe and protected, while you are planting seeds for future growth.
In the worst case scenario, if you’re company starts laying people off and you happen to be one of them, not because of something you did, but because of the way the economy is going, you already have a something in place to make the dips more managaeble.
7. Your Employer Can Train You
Over 60% of side hustlas say that their side hustle is directly or somewhat related to what they do at their main hustle. This means that any training you get on the job can also help you succeed in your side hustle. Perhaps their is a seminar or class your job pays for that you can go to or a conference where you will be able to learn from industry leaders. You’re essentially learning on the company’s dime. If you didn’t get a scholarship in college, well now you have one.
The relationship is reciprocal though. Most side hustlas say that their side hustles help them learn new skills that sharpen their skills and improve their performance at work too. In the early stages of your side hustle, you have to be constantly learning like a student and be aware that the classroom is all around you.
8. Your Employer Can Build Your Network
If you are in a client facing role at your main hustle, you are always meeting new people whether you’re marketing, selling, or delivering. As a side hustla, it is essential that you learn how to establish and maintain relationships with everyone you meet through your employer in such a way that they consider you someone worth working with even if you someday leave your employer.
About half of my business in its first two years came from people and organizations I met through my employer. By engaging with them in a professional way first and then a personal way second, I was able to establish connections that transcended the organizations that initially brought us together. Personal connection means doing things like remembering people’s names and birthdays, sending thank you cards, inviting them into other parts of your like (i.e. potlucks), sharing your story when the time is appropriate, and connecting outside of work.
Since most side hustles don’t directly compete meaning that you aren’t poaching your employer’s clients for the same service, it’s okay. And keep in mind that the person you’re talking to with the big title and nice corner office probably has a side hustle too.
9. You Have Momentum If & When You Leave
Most people think of entrepreneurship as jumping off a cliff and building your wings as you fall. And some people do it like that, but there is another way. The way was think about side hustling is that instead of jumping off a cliff, we are building building a bridge toward the life we want. Once that bridge is strong enough to support us, then we step out. This increases the probability of our businesses’ success and our success.
Before I left my job (Side hustla don’t “quit.”), I was already making money with my side hustle. I already had proof of concept. People wanted what I had to offer and they like how I offered it to them. So once I made my side hustle my main hustle, it was a question of “How do I scale this idea?” versus “What is my idea?” If I started from scratch, I wouldn’t be as far along as I am right now because my 6-month runway wouldn’t have been enough to support the time required to discover my idea.
While at my job I was putting about 20-30 hours per week into my side hustle and I left when I established momentum. I knew that working 40-60 hours a week would double the growth and accelerate that momentum whereas if you start from scratch, even 80 hours a week might now get you very far because it’s all research and discover instead of revenue and dollars.
10. You Can Allow For Organic Growth
Most side hustlas say that their side hustles have grown through referrals. Referrals take time, but they are the most organic form of growth out there. Word of mouth travels according to the excellence of your results. You’ve got to Wow ‘Em. W.O.W.O.M. mean worthy of word of mouth.
In these early stages, instead of trying to take the business income as profit, you can reinvest it back into the business because you still have your job. This stage of the business is Break Even Time or B.E.T.. You’re making a bet on yourself that you can grow your business faster than stocks or the interest rate. Any revenue you get can be invested into personal (i.e. coaching), human (i.e. intern), intellectual (i.e. market research, books), social (i.e. networks, conferences, associations), or physical (i.e. computer, software, business cards, website).
When you get beyond B.E.T., you keep the money as extra income or you can officially incorporate. If you incorporated and breaking even meaning that the business has no income, no income means no additional taxes for now. All you’ll have to pay is your accountant a little bit more and your annual company registration fee of a few hundred dollars so that you can continue to write off your business expenses.