The Necessity of Side-Businesses
I grew up in a traditional household. My mom was a teacher all her life until retirement. My dad has worked for a few companies over his lifetime, but worked for the last one for 15 or 20 years until he was forced to retire early due to cutbacks. I grew up in an environment permeated with the attitude of “get a job, work hard, be loyal and they will take care of you.”
As I grew up, I discovered that the culture and rules of the game were changing. I also had the growing feeling that I didn’t want to be a cog in the machinery – that there is more to life… Now I’ve read many investment/money/life management books which helped plant ideas, but that I never fully implemented the ideas. I assume that would be a similar tale for most people. A catalyst was needed: something to break the inertia of staying in my current condition.
I live in the Pacific Northwest in the US. Many of our major companies (and smaller) in the area have started major layoffs. My company announced layoffs too. (Luckily, I’m in a position that is very safe – mainly due to the department I’m in.) Also this area is IT company heavy so now the market is flooded with extra IT people. I just got into the field 2 years ago and am going back to school to fill in the gaps. I would have a hard time finding a job in my field if I were laid off. I had one of those eye-opening, sinking feelings of how dependant I am on my job and how I’ve willingly spent myself into a form of slavery. Despite good intentions and some awareness, I had completely surrendered to the consumer trap without realizing it. While staring at the red pill, I unconsciously took the blue pill.
The catalyst had arrived.
So where to go from here? I felt very strongly about needing to get this in order and get it started that I am taking time off from school to do this. I’ve taken off spring and summer quarters. My own path has been influenced by several different sources. I’ve listed below what I would consider the strongest influences on me in deciding how to move forward:
Early Retirement Extreme at http://earlyretirementextreme.com/
The Art of Nonconformity at http://chrisguillebeau.com/3x5/
Your Money or Your Life by Joe Dominguez and Vicki Robin
I first started with the idea that I needed different ways of bringing in income. I believe the hot phrase is “multiple streams of income.” Now I’ve tried several different things in the past and they didn’t succeed. I wasn’t passionate about those ideas so the effort and desire were not there. This was my first priority: figure out side-businesses that I am passionate about. Over a couple of weeks, I came up with eight ideas. Most likely only three or four have any decent chance to be a viable side-business, but I didn’t want to limit myself while brainstorming. The next step, I got from The Art of Nonconformity’s “how to conduct your own annual review.” I took a week off from work. I spent most of that time in various coffee shops with a notebook and letting my mind gently focus on the task at hand. I explored the side-business ideas, discussed those ideas with a few close friends to get feedback, listed what I had accomplished last year, and what I want to accomplish this year. After a week, I came up with a fairly solid, life-balanced plan. It is a good feeling.
So what are my end goals for the side-businesses? I am not looking to make them into a full time job (neither would I ignore the chance if it appeared), but just to supplement my income. The combination of supplementing my income and reducing my expenses will reduce the disparity between the two. Who knows, maybe someday they will cross over and then I will be able to live on the side-business’ income if needed.
So my catalyst has arrived and broke that inertia. Now I have to consciously keep moving and be more aware lest I fall into the trap again.
And you? I’m curious about other people’s experiences with starting side-businesses or breaking away from consumerism. Have you done it? In the process or planning to?
17 Comments
dagComment hidden because you are ignoring dag. (show it anyway)
I agree with Warren Buffet that in investing you should stick to what you know - the same goes for a side job. I have notions of starting a trendy cafe or something similar but have abstained because I know very little about the business - and I know it always looks more romantic/easy from the outside.
Beyond sticking to what you know, it's good if it's something you're really passionate about.
peggedbeaim a single mom with 2 kids, i work 30 hours a week, middle of the night on the weekends, as a CT tech. ive been a sideline parttime indepedent contracting massage therapist for several years. i always enjoyed it, but never put much of an effort into making a career out of it. i saw an ad in the paper about 1 month ago to lease a space in a salon. so i did. my overhead is low, about $80 a week. and it cost me about $250 to get a few things i needed for my room. massage is a low overhead field. and the best marketing you can do is free. the most complicated thing im trying learn is about sales tax and how to pay it, supposedly the state is sending me a packet. if it takes off, i can quit my regular job and make $60,000 a yr working 15 hours a week, if it doesnt, its a fairly cheap hobby that i love and keeps me busy now that both of the kids are in school. i just finished up my 3rd week at the salon, and made enough to cover my kids montesorri school, overhead on the business, a week of gas, and a little bit more. not too bad. good luck with your side project!
blankfistI disagree with the notion that you must stick with things you know, as dag mentions. I've heard this adage timeless times from people in the filmmaking world ("write what you know"), but if that was true, then we'd never have science fiction or comic book movies.
I make nearly all of my income as a programmer, and I never went to school for programming. It was a side-career I got into because it interested me. Once again another reason to shuck any thoughts of doing only what you know about. It's important in life to do what interests you instead.
I'm a big follower of Joeseph Campbell, and he says you must always follow your bliss and all other things will follow. That's easy advice in a financial crisis, I know, but if there's something you are passionate about, others will see that passion and you will find they will want to be a part of your passion.
I used to work for corporate companies here in LA, but now I freelance which means: I work from home, I make a great hourly wage instead of a salary, I don't have to pay into a payroll tax (though I have other taxes I have to pay as being self-employed), and I don't have a boss to look busy in front of. There are down sides, but they don't outweigh the positives.
Krupoblankfist, how about, "don't commit vast sums of money to a sideline unless you know what you're doing"?
A sideline where your investment is in your brains/hands is way cheaper than hard cold cash, pretty much always.
And blankfist, you didn't mention the tax deductible expenses - woo!
rougyI've been unemployed for two years now, living on my cashed-out 401(k). There are just no jobs in this town and the one's I applied for I never got. I usually find work easy, but maybe being in my forties has something to do with the current difficulty. I don't know.
I had a pretty good gig as a programmer at a local plant before that, and was genuinely surprised when they laid me off. It was totally out of the blue. But I don't miss it because my boss was a fucking asshole, the HR girl was a sneaky bitch, and 50% of the crew were illiterate homophobes.
Unless you really love your career or you've found your comfort zone, I think it's really important to figure out a way to make money without having to work for somebody else. The corporate world really fucking sucks. I've been in several variations of the theme--big, medium, small--and it was the same shit every time.
Now, I'm focusing on starting a web biz. It's not working yet, but I do think it has promise.
Making money online would pretty much be a dream come true.
Farhad2000I try to do sidejobs in what am good at which is mostly video and web design, I don't get side jobs that often but when I do the extra income is great.
But you must do projects you like, I been procrastinating on doing an edit job one video for nearly 3 months now because I simply had a terrible time filming it, dealing with the client and my heart isn't in it anymore.
My deadline now is Thursday.
curiousity>> ^dag:
I agree with Warren Buffet that in investing you should stick to what you know - the same goes for a side job.
Beyond sticking to what you know, it's good if it's something you're really passionate about.
The problem with sticking with what I know is that I worked in an industry that doesn't exist in the Pacific Northwest and one that I have no desire to work in. I completely fell into the IT world by accident and really enjoy it. No matter what side businesses I start, IT will always be in the picture.
Passion is definitely needed if the knowledge isn't there. That is what will keep a person motivated, learning more, having fun, and maintaining a positive attitude.
blankfist -> I agree. Thanks for the link. What are the main programming languages you use, if I might ask?
Krupo -> It is wise to be cautious when starting something that you don't know much about. Luckily for me, most of the side-business I want to pursue will be mostly intellectual and physical effort with minimal cash invested.
roughy -> Working for yourself does give you the freedom from the corporate world. Responsibility too, but I think the freedom is easily worth it. Sorry to hear about how your job ended. My friend just got fired from work because one of the supervisors didn't like him and made every effort to always put him in the worst light. It was clear what was going on, but everyone else with any authority just ignored it following the strong corporate tradition of "cover your own ass."
Farhad2000 -> I feel your pain. I remember several years ago when I was working at this job that I slowly drifted towards hating. When it was time to leave for work, I could feel the emotional heaviness actually dragging my body down. lol... I guess that wasn't very encouraging, was it? Well, lesson learned right? Get it done and remember the experience so that, hopefully, you don't get caught in a similar situation again.
dagComment hidden because you are ignoring dag. (show it anyway)
I don't know about your analogy Blankfist. SF books are generally written by SF nerds. I'd secretly love to be an SF author, it's something I'm passionate about and, IMHO, know a fair bit about.
Are SF novels written by tennis pros? Generally not, they're written by nerds who love the stuff.
curiousity>> ^peggedbea:
im a single mom with 2 kids, i work 30 hours a week, middle of the night on the weekends, as a CT tech. ive been a sideline parttime indepedent contracting massage therapist for several years. i always enjoyed it, but never put much of an effort into making a career out of it. i saw an ad in the paper about 1 month ago to lease a space in a salon. so i did. my overhead is low, about $80 a week. and it cost me about $250 to get a few things i needed for my room. massage is a low overhead field. and the best marketing you can do is free. the most complicated thing im trying learn is about sales tax and how to pay it, supposedly the state is sending me a packet. if it takes off, i can quit my regular job and make $60,000 a yr working 15 hours a week, if it doesnt, its a fairly cheap hobby that i love and keeps me busy now that both of the kids are in school. i just finished up my 3rd week at the salon, and made enough to cover my kids montesorri school, overhead on the business, a week of gas, and a little bit more. not too bad. good luck with your side project!
That is fantastic peggedbea! That sounds great.
Don't forget to visit a tax specialist to take full tax advantages for both federal and state taxes. (i.e. car expenses, rent "storage" for massage equipment in home for equipment payable to you from your business, etc)
I think that only working 15 hours a week and earning 60k might be a little unrealistic, at least at first. Like for a personal trainer, it is hard to make sure all of your slots are full and then some people will not show up for their appointments, etc. You may end up sitting around waiting for clients to show up. Please understand, I am not trying to discourage you! I think that there are some requirements that need to be met to reach that number.
Lastly, but probably most important is marketing. It's been said that it doesn't matter what you are selling, but how you market it. I think that is an overstatement, but marketing is tremendously important. Luckily, this is one of my interests. I really enjoy reading marketing books. This is probably due to my interest in psychology. My marketing will focus mainly on online presences and physical guerrilla marketing. It won't quite be free, but definitely low cost. Remember marketing should be ongoing. I have several friends that work in the escrow industry and continuous marketing is very important. It doesn't have to be expensive, just at least a steady trickle of marketing.
peggedbeathanks! i realize the pay out is a long time in the making, but if i get to the point where i can stay steady booked 15 clients a week then it equals out to about $60k. its a good time off and in better economic times of course.
ive started on some guerilla marketing techniques of my own. im conquering social anxiety at the same time!
also, i will weigh in and say that 1) having a passion for what you are doing is extrememly important and 2) if you are passionate about it, then the knowledgable part will come with the exploration. 3) i think the journey is more important than the destination.
lucky760I've always longed for a real side business for myself. Lately I've done a little bit of independent web programming work that just fell into my lap, but that's not quite enough.
I talk a lot about different ideas and possibilities, usually mostly focused on doing something with my programming expertise because that is my passion (and also my day job), but I always end up leaving it at that. I also think about starting a meatspace business of any kind really, but that's also as far as that dream goes.
I guess the thing with me is that I don't have enough confidence in myself and always allow myself to silently assume my dreams will eventually come true by themselves someday. I'm still waiting for my catalyst- my cellphone in a FedEx envelope, if you will.
curiousity>> ^peggedbea:
It sounds like you have a strong handle on things. That is great. The marketing that you said you were doing (looks like your post was edited - the update email showed you talking about a few specific things) are wonderful marketing techniques. Again, it looks like you are well on your way. Just remember to keep at least a small trickle of marketing going even once you get busy.
thanks! i realize the pay out is a long time in the making, but if i get to the point where i can stay steady booked 15 clients a week then it equals out to about $60k. its a good time off and in better economic times of course.
ive started on some guerilla marketing techniques of my own. im conquering social anxiety at the same time!
also, i will weigh in and say that 1) having a passion for what you are doing is extrememly important and 2) if you are passionate about it, then the knowledgable part will come with the exploration. 3) i think the journey is more important than the destination.
It wouldn't surprise me if you get to your goal sooner than later. Way to go!
curiousity>> ^lucky760:
I've always longed for a real side business for myself. Lately I've done a little bit of independent web programming work that just fell into my lap, but that's not quite enough.
I talk a lot about different ideas and possibilities, usually mostly focused on doing something with my programming expertise because that is my passion (and also my day job), but I always end up leaving it at that. I also think about starting a meatspace business of any kind really, but that's also as far as that dream goes.
I guess the thing with me is that I don't have enough confidence in myself and always allow myself to silently assume my dreams will eventually come true by themselves someday. I'm still waiting for my catalyst- my cellphone in a FedEx envelope, if you will.
It is hard to break that inertia of what is. It is so easier to become comfortable where we are.
One thing that has helped me is that my good friend and his fiancé are very business minded and creative. They are very focused right now on trying to set up something that is location independent so they can travel. His fiancé has actually created and sold several businesses so far. Having people like that in my life creates an atmosphere of creativity and it a fantastic sounding board for ideas. It helps that I trust them both too!
When you get to the point that you are ready, I would recommend what I did and take a week off to fully explore the ideas. It is very easy (I have done it for years!) to think of good ideas and then they stagnate in the business of everyday life.
dgandhiMy GF and I lived in San Francisco in a house with five other people which we all collectively rented. We both worked 50+ hrs a week, and rarely got out to do anything fun. We had put about 90k away, and thought about buying a house with it. If we had done that four years ago we would have negative equity, and owe over $0.5M, instead we got out.
We moved to Pittsburgh PA, where we bought two houses for < $20k each. We rent one and live in the other, we do web work and print design when they come our way.
The cash flow about breaks even, but we have no debt, and we have everything we need, and loads of free time.
I have a cyclical habit of downsizing my life. After I dropped out of UCSB in the late '90s I went to live off the grid in Canada for a few years, the catalyst being the existential arrest caused by my job as a university IT manager.
After I resettled in SF I was sqatting, and dumpsering myself a generally punk-rock existence (minus musical preference). As tends to happen I ended up living with my GF and living a somewhat "normal" life, until we decided to buy a house, and realized we would not be able to do it in SF, and so we downsized to Pittsburgh, and became landlords (gasp squatter -> landlord in 4 years flat).
I'm kinda hoping for total economic collapse, so that I can massively simplify my life again. I'll be planting a garden this year, to make sure we can keep veggies on the table if California has trouble shipping them out in their current low-water-reserves condition, that's going to be my bad economy "side business".
dagComment hidden because you are ignoring dag. (show it anyway)
^That's an amazing story. You should write a book.
dgandhi>> ^dag:
^That's an amazing story. You should write a book.
I suppose that is my other side business, though I'm not writing a book about my life, more an exploration of socio-technological development. I don't know if I'll ever make a penny on it, so I'm counting it as a hobby at the moment.
If I thought of the book as an income stream I would probably lose interest. I always make better money when I am trying to do something else anyway.
DeanoIdea for Sift: how about a marketplace/jobs board where the community can buy and sell services? I sometimes need a designer or web guru and it can be hard to find someone. My website was done by a lovely lady in Scotland who was firm with me and stopped me going off into client-behaving-mentally-land but some of the rates other UK designers charge were crazy.
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