Should I Earn Some Side Income While Working on My New Business?
Dear Celes, I have been wanting to reach out to you for a long time, you were always one of my top mentors and it’s really amazing the sheer volume of things you have done and accomplished in your business and life. I have always wanted to have my own business and this year I finally quit my job so that I can focus on doing it once and for all. The problem is, suddenly I have no income (no surprise), and searching for another job is probably going to start the whole cycle of not being able to do much on my business again. My ex-company is kind enough to offer me freelance jobs, however, the rates are not superb and I’m worried that I might need to always check my inbox and spend way too much time on those freelance gigs. Plus I really don’t align with them. But it seems the safest way to get some income for now. What should I do?
Thank you and love you. — Increa7
Hi Increa7, thank you so much for your kind words! 😀 I’m really happy for you that you’ve taken action to focus on your business. Yet, you are right — the state of not having income can be an unnerving one. So what should you do?
Whether you should earn side income (or even look for a new job) while in the process of building up your business really depends on the following:
- How much you need this money
- Whether earning the money will make a difference (to you)
- Whether you can create more value by spending this time on your business or the side job
What do I mean?
- How much you need this money refers to your financial status. How long your current savings can last you till. Your comfort level before you feel that you need to look for a job. For some people it’s $1,000 in savings; for others they may feel like they need to look for a job when they dip below $10,000 in savings. This is a personal figure.
- Whether earning the money will make a difference. Perhaps you don’t really need the side income but you feel disturbed by a decreasing bank balance. Earning some side income will give you emotional relief.
- Whether you can create more value on your business or the side job. While starting a new business, not all our time spent will be productive. Maybe some of this time can be better spent by gaining experience or building your portfolio in a different job / side job, in a way that helps with your business. Or earning side income that can be used to grow your business.
When I started Personal Excellence in 2008, I decided to earn some side income (as a private tutor) after two months. Why? I didn’t have any financial trouble and my savings would last me for another 1.5 to 2 years, at least. I did this to err on the side of caution, because I wasn’t sure when I was going to earn my first dollar. While I had a goal and a plan, I was in a totally new industry, and let’s not kid anyone — anything from absolute success to absolute failure could happen. I knew that I was going to achieve results as long as I stuck to my strategy and plan, but it wasn’t 100% clear when these results would appear.
So as contingency, I sought out some side income. Nothing that required major time, just some simple tutoring assignments. There was no learning curve as I already gave private tuition back in school. By doing so, I was able to put my fears to rest. Even though I was just earning a few hundred dollars a month, at least I knew that I was having some income coming in. I was still having a net decrease in my bank balance each month, but I knew that I could easily increase it by take up more tutoring assignments when needed. I was simply minimizing my risks so that I could work on my business without worry (because we all know how helpful worrying is).
In the end, doing so helped me put my 100% into PE without reservation, and was possibly one of the reasons why things took off so quickly. I quit my side job after 2-3 months because I was already earning money through my business, and every hour spent on my side job was more costly than useful. Working on my side job also gave me exposure to different situations (coaching different kids) which gave me ideas and inspiration for my work.
I do feel that if I hadn’t had side income coming in, I wouldn’t be as bold and fearless in my endeavor. I would still be taking lots of action of course, but second guessing and worrying at each turn, wondering when I was going to earn money, etc. It was by creating contingency plans (getting side income; ensuring I had job options if I were to return to work), and allaying my fears, that I was able to 100% commit, without fear or doubt, to my business plan. And this confidence (along with persistence, hard work) was very important in helping me succeed. After all, when you walk into something with fear, you bring fearful vibes with you, which affects your actions and results.
3 Questions if You’re Considering a Side Job
For you Increa7, if you are considering a side job, there are 3 factors you can look at:
- Does this side job require a high investment of time? Ideally you want a low investment but high payoff option. Just put in the hours, get the money, and move on and work on your business. Even if the earnings are not high, that’s okay — you are not doing this forever. It should be worth your time, in that you can’t earn this $$ by spending this same amount of time on your business.
- Do I need this money? Even if for emotional relief, if it gives you a peace of mind, then it’s worth pursuing.
- Does this side job move me closer to my vision? Will it help you learn skills, gain experience, or build connections that will help you in your business?
It sounds like working for your ex-company (freelancing) will satisfy #1 (low investment of time) and #2 (meets a need), but not really #3 (relevance to your business). And that’s fine as I don’t think a side gig needs to fulfill all criteria. It is, after all, just a side gig to tide you through. Your main objective is to succeed in your business and to earn a living from it. Everything else you do is to help you move forward to your final goal.
Of course, if you can pick and choose assignments that fit your goals, that would be great. You can also let your ex-company know your preference, and perhaps work something out. Or you can use this freelance job as a temporary solution, and shift to a different side job later if you come across a better opportunity. But you shouldn’t spend a huge amount of time finding or making your side job happen, unless you really need the money.
In the meantime, keep your mind sharp on the end goal — to make money in your business. As you work on your business, hopefully you will start to earn some income — $1, $100, $200, $500. Soon, your time taken away from your business to do the side gig is not worth the money you earn from the side job anymore. Soon, you will find that you gain more by spending this time on your business rather than your side job. That’s when you can ween off your side job assignments and spend more time on your business, to the point where you can stop working on the side altogether. 🙂
Setting a Cutoff
Finally, what will help is (1) to set a cutoff on the number of hours you are willing to put aside to earn side income, and (2) to recognize that the side job as simply what it is — a side job.
On (1), having a cutoff helps you limit the hours you spend on the side gig, so that you don’t divert too much. Let’s say you are willing to spend only 10 hours a week on this side job — keep to this number. Take up assignments that will match this amount of time, and stop once you’ve met your quota. Spend the rest of your time on your business. Use time management strategies to maximize your time.
On (2), sometimes we may feel discouraged when we don’t get as much income as we did before. But this is pointless because it is not an apple-to-apple comparison. The point of the side job is to tide us over and bleed less in expenses each month. It is not a source of profit or massive profit. Your end goal is to succeed in your business. So keep your eyes on the final prize.
Remember that you quit your day job because you didn’t have the time to fully focus on your business. Yet at the same time, working on your business fully at the start can be unnerving since there is $0 in earnings. The side job is to make this transition less jarring — by giving you a little income, not a lot but enough to cover simple expenses, and most importantly still give you some time/freedom to work on your business.
At every step of the way, your goal should be to find new strategies to grow your business, get the word out about your business, and start earning your first dollar (from your business) by giving great value to your customers/clients.
All the best Increa7, and I wish you godspeed in your business journey! 😀
- How To Pursue Your Passion & Earn Money (series)
- Pursuing Your Passion With No Money
- Passion Paycheck
- The 8 Habits of Highly Productive People
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