AP 0036: How Do You Know When to Go Full-Time with Your Side Business?

AskPat 36 Episode Transcript

Pat Flynn: Hey, what's up everybody? This is Pat Flynn. Welcome to Episode 36 of AskPat. This is where I ask your online business questions, five days a week.

I'm very happy to mention the very first sponsor for AskPat. The very first official sponsor. As you know I only recommend and work with companies that I have worked with and that I enjoy. This one is great. This is FreshBooks, the cloud accounting software that you can use to help keep track of the expenses and invoices and everything in your business that has to do with finance. Right now if you sign up you get a 60-day free trial with them. If you go to FreshBooks.com/askpat and put in the podcast name “AskPat.” [Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]

Again that's FreshBooks.com/askpat and put in “AskPat” when it asks, “How did you hear about us?” That would help them know that I helped refer you and that would be awesome. Awesome. Thank you FreshBooks for all the help and support for AskPat.

Today's question comes from Ben and it has to do with if you're running a side business. Maybe you're doing it in addition to the 9-to-5 job that you have or other stuff that you have going on, or maybe it's just a hobby. There might come a point when you have to make a really important decision as far as the direction that you take your side business or your hobby business.

So let's hear from Ben to hear exactly what this sort of decision that is really important that you have to make in the future is.

Ben: Hi, Pat. I'm Ben Turner with Turner Web Services where I provide online business consulting for photographers. During the day, I'm on the construction side of engineering and, in fact, I've used your LEED exam site to take the LEED test.

I have five kids now and my day job is forcing me to travel 75 percent of the time and it's just not working. I want to quit my job and go full-time with my online business. My question is: how do I plan to let go? How do I know I'm ready to make transition? I know there's lots of things to consider, financials and other things, but maybe as a guide or some way that we could plan that.

Also, I want to say I love your videos with your drawings and how you use engineering markups like clouds. I can definitely relate to that. I enjoy it. Keep up the good work, Pat. Thank you.

Pat Flynn: Ben, thank you so much for your question. I really appreciate it. Thank you so much for using my LEED exam site, Green Exam Academy, to help you with the exam. I'm hoping it helped you pass. Anyway, this is a very important question, something that is going to come across a lot of people when they start something on the side like you did. It sounds like you are at a point where things might be going somewhere so you are now making the decision to perhaps put more effort and time into the online stuff that you have going on.

This is, of course like you said, a lot of factors to go along with that. Not just income levels and things like that, but also your happiness. Also the people around you, your family. You have five kids. So there's a lot of important things to think about here. This is definitely not a decision that you can make over night. It's not a decision that is going to be easy, but I'm going to try and help you through this.

First of all, before I even get into that, I think it's important for everyone listening to realize that the nice thing about doing online business is that you can start out small and you can start out on the side. Even if it's just an hour a day, that's an hour a day that you weren't originally putting toward yourself. There's a saying in the personal finance industry where if you really want to grow your nest egg and your savings, you should always pay yourself first. Before you start paying your bills or start spending money on other stuff, you should pay yourself first.

Put $100, $200, whatever you can, into a savings account, or a retirement account, or whatever. That's how you grow your nest egg. That's how you make it almost automatic that you are contributing and helping to grow your nest egg. Well the same thing goes when you're just starting out with your online businesses. You only need an hour a day as long as you consciously know that that hour is for you to do something for you. Because a lot of people dedicate eight, ten hours a day for other people. But when you can start to devote a little bit of time to yourself you can build up that business. You can get that experience and then perhaps make a decision down the road to maybe take it full-time, and make that decision, or make that leap.

A lot of you know that decision was made for me when I got laid off and that was one of the best things that ever happened. Even though at the time it was probably the worst feelings in the world, but that is what helped me discover these new opportunities. It's what's helped me to devote more time to something that actually was able to be my own. Something that could pay me back in return for all the hard work I was able to put into it.

Ben, to your question, how do you know? How do you know when it's time to go full-time? Well there's of course a number of different things and ways to think about this. You can think about your income levels. If your business on the side is starting to generate as much or more than you would at your 9-5 job, then yes, it could be a possibility and you'd have that sort of idea that you're going to be okay financially because of course that's an important thing to think about. Now of course for everybody starting a side business, it's not always going to be the case and you might feel like you just need more time to dedicate to your online business, or to your side hustle. In order to get it to a point where you can match or exceed your existing earnings at your 9-to-5 job.

In that case, I know a number of people, a lot of great friends who've done this. They, while working a 9-to-5, would build up a nice little savings, or a safety net, or emergency fund, if you want to call it that. So that when they made the decision to break away they had something to fall back on as far as earnings and be able to live a certain amount of time, six months, a year. Some people do it for a couple of years just to make sure that even if their side business weren't to grow, or even go away completely, they would still be okay financially. So that might even give you a little more motivation during your 9-to-5 job. Why are you working 9-to-5? So I can save up, so I can do something on my own. That's that example.

Then beyond the finances, and the income, and the earnings, you have to also think about your levels of happiness, and how happy you are, and how much you actually want that to change. If you absolutely just cannot stand what you're doing anymore, and it's making your life miserable, why are you still there?

I'm not saying that to you, Ben, specifically, but I almost heard you say it in a very prominent manner, “I want to quit my job.” How is that affecting everybody else? Your happiness levels when you come home. Is it the lifestyle that you want? If it's not, then changes have to be made. It seems like you're on your way to doing that and you have to make a decision and take that leap to see if this is what you want to do and if it's something that's going to work for you. Again, seems like you validated your idea, things seem to be working, then you're going to try and go full-time with it which might be cool.

Another thing you have to think about is your own confidence as well because this is something that holds a lot of people back. They have an inkling or the desire to do something, but they just don't believe they can do it themselves and you have to. You have to believe in yourself because if you don't it won't happen. There's a quote, one of my favorite quotes by Henry Ford, that is, “Whether you think you can or you can't, you're right.” You may have to get to a point where, with your side business, you can be confident and you know that when you have this extra time to devote to it that it will succeed or you will do what it takes to succeed. Know that you might not get it right the first time and things might go down in income a little bit, but if you keep working at it and you know you can figure it out, and you believe in yourself, it will.

I remember speaking to Cliff Ravenscraft about what he did when he knew he wanted to get away from the insurance industry and start podcasting full-time. That was even harder for him because he worked for his father who was in the insurance industry. He knew that this was something he wanted to do. Those first couple years were hard, really hard. Now he's doing incredibly well. He's such an inspiration to me. This is Cliff Ravenscraft over at Podcast Answer Man, the person who has actually inspired me, or helped me in so many ways, to get started with podcasting. I definitely give him credit for this podcast itself. Again, the mindset is so important.

I think you need to consider your earnings and how much you believe you can earn or where you're at versus maybe how much you have saved also. You can also think about your happiness levels and how much is that worth to go and try something else? Or also think about the other people around you. Then your own mindset, your confidence, in what you're doing. If you're not confident, then you might need to build that confidence. You might need to appreciate some more small wins or try some mini-milestones to get you to a point where you know you can do it.

I think another important thing to think about, if you're going to go full-time . . . a lot of people think that it's the end-all. It's the last shot. It's the only thing going for you and if it doesn't work you're going to be down in the dumps forever and never be able to get back. You have to also be realistic about what might happen if it doesn't work out. A lot of times we always think about the worst thing possible. Honestly, most of the time what we think isn't actually what might happen. You want to think about if it doesn't work out, what would really happen? I could probably try to find another job. I have a lot of credentials. Where would I live? Would I be homeless or would you have friends or family that would take you in for a brief moment of time as you try to figure things out?

I think that's why it's also important to surround yourself with people who are going to be supportive, who are always going to be there for you, and who can help push you forward, and sort of help build that confidence for you too. One of the toughest things to do, I would imagine, would be to quit your job and have the people around you, who love you, just not support you with your decision. That would be one of the hardest things. That's why I was so fortunate to have, she was my fiance at the time, but my wife now. When I got laid off, she believed in me and that helped so much. So much. My family as well, my mom and dad who believed in me even though my dad and I didn't see eye to eye at first with it. After some small wins and started to build confidence in me. Now he's like my biggest fan which I love. He reads the comments on my blog and tells me about them when they should be deleted. He's like spam police on my site. It's awesome.

I think we should finish on that actually. When you make that decision to go full-time, if that's indeed what you want to do, make sure you think about, and talk to, the people around you. Obviously the people you're working with because they're affected by your decision, your boss, and you want to be honest and completely up front with them about why you're doing what you're doing. Yes, you're going to look forward to people who are going to be disappointing especially if they need you, but you need to do things for you. You wouldn't even be thinking about this if that wasn't the case. Again, of course, beyond that is your family. Kids, your wife, people around you. You need to help them understand what it is you're doing or thinking of doing.

An extreme example would just be coming home one day and be like, “Oh, I quit. I'm going to do my online thing.” That wouldn't sit very well. If you spend time beforehand, before you make this decision even, to speak with them, to talk to them about your thoughts and what you believe you can do, and show them the ins and outs, and maybe even get to a point where okay, you're going to give yourself this much time to see if things can happen. If not, then you're going to see what you can do to get things back on board or that you have this much savings and you'd be okay even if you don't make any money. Those types of things are really important.

Communication with the loved ones around you about what you're thinking or doing if you're going to make this sort of change in your life is extremely important. That's how you get their support. That's how you get their support. You want to sell them on what you're doing, and not in a sleazy, slime-bally way where you lie and just hype it up. You want to be honest with them. Honesty is always the best thing you can do and if you truly, honestly feel like you can do this, and you're confident, and what you say will be received in a much better light. You don't want to go up to them and say, “You know, thinking of quitting, but I don't know if it's going to work.” How is that going to show those around you that you are confident in this decision? It's not. Again, talk to them about your plan, your vision, and most importantly why. Make sure you consider them as well. You're doing this for them too. I think it's important to help them realize that as well. It might be difficult. You might get some disagreements. You might have to talk longer than just one day, but you have to think about what the right decision is and do what's best for you and your family as well.

Ben, of course I can't just say, “hey you should do it or you shouldn't do it,” but I can give you some guidance and information based on my experience working with other people and also from my own past as well. So I hope that's helpful for you, Ben. Thank you so much for your question, a really deep question. I wish you all the best. Of course, I'm going to send you an AskPat t-shirt for your question.

For those of you listening, if you have a question that you'd like potentially answered here on AskPat and also potentially get a t-shirt, you can head on over to AskPat.com. You can just use the widget on that page to ask the question.

Of course, I want to thank one more time my sponsor FreshBooks.com, cloud accounting software. It's incredibly easy so you can just focus less on all the mess and the clutter when it comes to the finances and focus more on your business. Really easy to use. You can use it just on the cloud so it's just accessible from anywhere and it's very user friendly. Again, like I said, I use it as well. That's FreshBooks. If you go to FreshBooks.com/askpat and put in “AskPat” in the “How did you hear about us?” section. That would be extremely awesome. [Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]

Thank you so much for listening to this episode of AskPat. Of course I'm going to leave you, Ben and everybody else listening, with this quote that is from Abraham Lincoln. “If there's anything that a man can do well, I say let him do it. Give him a chance.”

Take care. I'll see you in the next episode.