Latest / Cash Confident with Brie Sodano / When to Take the Leap of Faith From Side Hustle to Legit Biz

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When to Take the Leap of Faith From Side Hustle to Legit Biz · Cash Confident with Brie Sodano

• 0:01
  Speaker 1: Welcome to the Cash Confident podcast.
• 0:04
  Speaker 1: I'm Brie Sedano, your fearless host, personal finance expert and the visionary behind the revolutionary Cash Confident community.
• 0:10
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• 0:22
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• 1:02
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• 1:10
  Speaker 1: Oh, hello, hello everybody.
• 1:17
  Speaker 1: Welcome to the Cash Confident podcast.
• 1:22
  Speaker 1: Today we are talking about when is it time?
• 1:26
  Speaker 1: When am I ready to take the leap of faith from a side hustle to a full time business?
• 1:32
  Speaker 1: And this is a question that I get relatively often, and I will tell you I'm going to go through some of the things that I work with on clients, but it's not exactly a perfect linear process.
• 1:46
  Speaker 1: It's not exactly a situation that there's like, oh, I could check these four things off, let's go ahead and do it.
• 1:53
  Speaker 1: It depends on situationally.
• 1:54
  Speaker 1: So, for example, situationally, if you're a single mom, your situation is going to be different than if you have a spouse that can float the household expenses for a few months, or if you have savings, or if you don't have savings.
• 2:12
  Speaker 1: There's different situations.
• 2:15
  Speaker 1: So I'm going to just go through some of the things to look at, the things to consider and some just tips for getting to the place where you can take the leap of faith.
• 2:27
  Speaker 1: All right, so in one of my last episodes, pretty recently, we talked about side hustles and starting side hustles, and most of the people who start side hustles actually have a secondary hope of being able to work full time in their own business or for themselves, and here are the things to really consider about that.
• 2:51
  Speaker 1: So there's the income.
• 2:52
  Speaker 1: So that's a factor Like I want to.
• 2:57
  Speaker 1: Most people want to be able to replace their income by starting their business.
• 3:03
  Speaker 1: I will tell you that it does happen, but it's pretty few and far between that somebody with a side hustle can fully replace their income from their job.
• 3:15
  Speaker 1: Before they take the leap of faith.
• 3:17
  Speaker 1: It does happen, but it's a little bit rare.
• 3:20
  Speaker 1: Most of the time for people I see there's a financial gap, so it's going to be like that's the leap of faith.
• 3:27
  Speaker 1: It's like, oh, I'm going to do this.
• 3:29
  Speaker 1: There is a gap, I recognize the gap and I'm going to cross the gap, so that's the leap of faith.
• 3:38
  Speaker 1: The other things to consider are health insurance and any other benefits that you get.
• 3:45
  Speaker 1: Health insurance is a big one, especially if you're in a situation where you really need health insurance, where health insurance is something that you use.
• 3:54
  Speaker 1: So that's a place where you can start to look.
• 3:59
  Speaker 1: Most states have an exchange, like when they pass Obamacare.
• 4:05
  Speaker 1: There's exchanges where you can buy your own health insurance and most jobs do offer a thing called the cobra where you can pay.
• 4:14
  Speaker 1: It's generally pretty pricey, but where you can pay out of pocket for the health insurance that you had through your past job for a period of time.
• 4:24
  Speaker 1: So that's a place where people sometimes will get stuck and too afraid to take the leap of faith around the health insurance, because they're like I really need health insurance.
• 4:33
  Speaker 1: And we have these ideas that health insurance is wildly expensive.
• 4:36
  Speaker 1: And health insurance can be wildly expensive but, depending on your income and the amount of people that live with you, sometimes you can, sometimes it's it can be affordable.
• 4:48
  Speaker 1: So, anyways, that's a place where, if that's a hang up for you, you want to talk to somebody, you want to look on the exchanges, you want to see what's available to you.
• 4:58
  Speaker 1: Though there is an additional challenge around health insurance, um, on the exchanges, because they want to know how much money you make and if you're just starting a business, it's, it's difficult to say, it's difficult to say, and then they're gonna like it's a little scary when they're like all right, well, if you make more money than this, you're gonna owe us your, your tax credit back, you know, and so there's a little bit of, there's a little bit of that, you know, just so, you're aware of it.
• 5:30
  Speaker 1: So, uh, that's those are some things just to like.
• 5:35
  Speaker 1: Get yourself together, start looking at the information, like what's the total value?
• 5:39
  Speaker 1: You know beyond, uh, beyond, just like my paycheck value.
• 5:44
  Speaker 1: Then we want to get crystal, crystal clear on what is like your base level, necessities, and then what's above that and I'm talking for your business expenses and for your personal expenses like you need to have that number clear, like crystal clear, so that way you know where to set your financial.
• 6:05
  Speaker 1: Uh, like your financial standard of, like this is the bare minimum of money that I can make to flow at all of my expenses for the month, and then this is, like you know, my, my ideal standard and this is above my ideal standard.
• 6:19
  Speaker 1: So we do need to have crystal, crystal clarity around the finances and during, you know, during a period of the leap of faith, which will probably last, you know, a couple of months, a few months, maybe even a year, depending on what kind of business you're doing.
• 6:36
  Speaker 1: Um, you want to maintain that crystal clarity.
• 6:40
  Speaker 1: You want to.
• 6:40
  Speaker 1: You want to keep your eye on your expenses.
• 6:43
  Speaker 1: You know you want to be very judicious and, taking on new expenses, you want to make sure that if you're investing in your money in your business, you can see how you would get a return on investment.
• 6:52
  Speaker 1: Um, and you want to, you want to maintain crystal, again, crystal clarity on those personal expenses so that way you can see the way the money flows.
• 7:01
  Speaker 1: I do suggest when you're starting a business that is becoming like a legit business, to really separate out your business finances from your personal finances and then take, take the draw or take a salary or take a paycheck, however you know you discuss that with your accountant.
• 7:18
  Speaker 1: It's going to be best for you.
• 7:20
  Speaker 1: But keeping those expenses separate and clean is very helpful and the reason is is because if there's ever a problem, you know where to look for it.
• 7:29
  Speaker 1: Here's what I mean.
• 7:30
  Speaker 1: So I had a man I had a client once and she had maybe three different businesses uh, maybe like eight different bank accounts, credit cards all over the place and there was a spending problem.
• 7:44
  Speaker 1: There was a spending problem in this woman's life and it took me Probably three meetings with her and months of backtracking to figure out is the problem.
• 7:55
  Speaker 1: Is the problem in the real estate business and this is the problem in the main business as the problem in the personal life.
• 8:01
  Speaker 1: Where is this overspending coming from?
• 8:05
  Speaker 1: Is a and like?
• 8:07
  Speaker 1: Is it adjustable?
• 8:08
  Speaker 1: Do we need to make more money?
• 8:09
  Speaker 1: Like?
• 8:09
  Speaker 1: And it was so such a tangled Situation that it took us a very long time and a lot of effort to be able to even sauce out.
• 8:20
  Speaker 1: All right, we're overspending in the business on these things.
• 8:24
  Speaker 1: We can cut this back, but really the bulk of the overspending is happening in the personal life and what needs to change here to keep this all you know, copacetic.
• 8:35
  Speaker 1: So I do suggest that when you're at a place where you're taking that leap of faith, that you do separate your you know your business savings, your business checking if your business credit cards, and that you use those things solely for business expense and then you pay yourself and then from there you know you pay your personal expenses, you save your personal money and you do that separately and your account and should be able to help you with that as you, as you take the leap of faith.
• 9:05
  Speaker 1: So, from a business perspective, there are some things that when I'm working with people that I'm, I'm gonna want to see that they haven't placed before I would ever believe you know what you should do which are nine to five, right, like one.
• 9:18
  Speaker 1: I'm gonna see that they have a reliable source of leads, a Reliable source of leads, because that is the place where the where the money comes in, and I'm gonna want to see that that source of leads could be Expanded upon.
• 9:34
  Speaker 1: So like, let's just say, for example, you have a business and it's all word of mouth, friends and family Unless you have so many leads that you are in your side hustle that you are turning business away.
• 9:45
  Speaker 1: I would be very reluctant to be like.
• 9:47
  Speaker 1: You know, you should know puts a job because that source of leads is.
• 9:52
  Speaker 1: It's not that it's Unreliable per se, but it's.
• 9:55
  Speaker 1: It's not something that you could just turn the heat up on.
• 9:57
  Speaker 1: You can't just turn up your ad spend on something like that.
• 10:00
  Speaker 1: So you want to make sure that your business you know that you have an, you know enough leads coming in and that you or even if you're adding in additional lead sources that those methods make sense and then you can count on them well enough to like quit your job.
• 10:19
  Speaker 1: You know what I mean like.
• 10:20
  Speaker 1: So that's, that's it.
• 10:22
  Speaker 1: So I want to see that you're gonna have a reliable source of leads and that that source of leads is something that you could expand upon.
• 10:30
  Speaker 1: All right, then I'm gonna want to see that you have a reliable sales process and that money is coming in.
• 10:37
  Speaker 1: You know regularly that your sales process is effective, that it's working.
• 10:42
  Speaker 1: You know it depends on what kind of work you're doing if you're sending proposals, if you're sending estimates If you know you just have prices.
• 10:48
  Speaker 1: You know, I'm gonna want to see that you you know how to sell and Not just to super warm people who came in friends and family.
• 10:56
  Speaker 1: Like I'm gonna want to know that you can effectively close a sale.
• 11:01
  Speaker 1: All right, then I'm gonna want to look at your pricing and, like, at the prices that we're charging, can you reasonably expect to replace the salary and, like, eat food?
• 11:13
  Speaker 1: That's gonna be very important.
• 11:15
  Speaker 1: So we're gonna want to make sure that your pricing Make sense.
• 11:20
  Speaker 1: And if you have to drastically increase your price to be able to make this make sense, that often requires a change in Messaging.
• 11:27
  Speaker 1: So that's another place that we have to be careful, because then then our leads may not be Effective anymore.
• 11:34
  Speaker 1: If we were bringing in leads at one level in one price point, we need to raise our prices, we may need to change our messaging.
• 11:41
  Speaker 1: All right, then I want to be looking for solid deliverables.
• 11:44
  Speaker 1: Can you deliver the things that you say you know like?
• 11:48
  Speaker 1: Because if you cannot, I would tell you that Don't put your job like.
• 11:52
  Speaker 1: You want to make sure that that you can do it, that that makes sense.
• 11:55
  Speaker 1: That you know.
• 11:58
  Speaker 1: Let me give you an example.
• 11:59
  Speaker 1: So I, at one point I had a client who was making.
• 12:05
  Speaker 1: This was a hobby.
• 12:07
  Speaker 1: It was a hobby, it wasn't even really a side hustle, but we she was talking about taking her hobby of making canoes, you know, out there, but she was hand doing these things.
• 12:21
  Speaker 1: There was, even if she was a canoe, making handmade canoes all day and night For the price that she could sell a canoe, there would be no chance that she could put her job there.
• 12:31
  Speaker 1: Was it like the she could not sell?
• 12:35
  Speaker 1: Like she couldn't deliver enough canoes to.
• 12:37
  Speaker 1: Even if she could sell them all, she couldn't deliver them the way she was doing it, so that business was dead in the water.
• 12:42
  Speaker 1: You know it would.
• 12:44
  Speaker 1: It would have not worked Without massive, massive investment in team and I Guess, like a woodworking equipment for set team, all right.
• 12:58
  Speaker 1: So I want to see that you have deliverables.
• 13:00
  Speaker 1: Then there is the issue there are some intangibles.
• 13:05
  Speaker 1: There are some intangibles that I will share that are things that I look for.
• 13:10
  Speaker 1: So I want to see momentum.
• 13:12
  Speaker 1: I want to see that you're taking actions, that you're getting results, like I want to see that you're, that you're not in a huge state of Internal conflict, like I want to see that the bulk of your energy is going toward this.
• 13:26
  Speaker 1: I want to see that you feel enthusiastic about it.
• 13:29
  Speaker 1: Those are things that I would be looking for, and I want to see a level of Confidence like I know that I could do this, and it's like a certainty.
• 13:42
  Speaker 1: Like a certainty like I know that I could do this.
• 13:45
  Speaker 1: And the reason that those things are really important is because it is Scary as fuck to quit your job and be solely dependent on a business, especially if you require that money to live your life.
• 13:57
  Speaker 1: Like it is no joke on the nervous system, it is no joke on your mental, on your mental faculties, and so when I'm going with this is momentum.
• 14:08
  Speaker 1: Is most of our, most of our energy going in a single direction?
• 14:11
  Speaker 1: Right?
• 14:12
  Speaker 1: But if we're, if we're, in two different directions, that is a tough place to try to make something work from where?
• 14:20
  Speaker 1: If I really want this business to work and I am Simultaneously so afraid that it won't that I'm panicking, because it is very hard to do our job when we're in a state of panic right, I want to see that there's actions being taken, because if there's no actions being taken, then I am nervous for you and I'm like, hmm, but I'm like, hmm, it seems like we're gonna have to do some actual work if we want to make this Make work.
• 14:47
  Speaker 1: But if people are not doing your work there's that's generally an indication of Some blocked energy somewhere.
• 14:54
  Speaker 1: It might be an internal conflict, it might be be something you know.
• 14:58
  Speaker 1: So those are, you know, and I want to see a level of certainty, because the temptation to quit is going to be real loud for the first couple months.
• 15:11
  Speaker 1: Well, it could be it's not like a guarantee but it could be real loud.
• 15:16
  Speaker 1: So you're going to need to be able to quiet that for yourself and just stay on your path, which, again, is no joke to the mental faculties, it's no joke to the nervous system, it's no joke to the finances.
• 15:29
  Speaker 1: So it's I'm looking for like the energetic, the mental and like the action level, strength to stay on your path, even when it looks like it's not going to work, even when you're afraid that you're not going to be able to pay your mortgage.
• 15:48
  Speaker 1: So those are some things that are more of like an internal place to check.
• 15:56
  Speaker 1: So those are the things.
• 15:58
  Speaker 1: So we went through the financial stuff.
• 15:59
  Speaker 1: So I want to make sure that we have crystal, crystal clarity.
• 16:02
  Speaker 1: I do want to make sure that you're at least you know some of the way there, because the here's why we have to take a leap of faith is that most people in their business are like so, like, let's just say, you're making, you're making a set amount of money in your W2 job and you're nine to five and then you're able to make, let's say, half of that in.
• 16:23
  Speaker 1: You know, 10 out 10 hours, or 20 hours a week after work.
• 16:28
  Speaker 1: Well, when we free up that 40 hours, we should be able, and we direct that same focus toward toward the business, we should be able to make more money.
• 16:39
  Speaker 1: So there is, there's generally the place where I do not have enough time in the day, I do not have enough energy in my body to get all the way there to be able to quit this job.
• 16:52
  Speaker 1: So that's the place where I have to take the leap of faith, right?
• 16:56
  Speaker 1: So we want to make sure you know that you're making some money, that you have, that you have crystal, crystal clarity.
• 17:01
  Speaker 1: You know your numbers, you're like aware, like you've fully just examined the level of risk and that you've examined All right.
• 17:12
  Speaker 1: Like I have spout, you know, I have a spousal, like spousal's income or spousal support.
• 17:17
  Speaker 1: I have savings I what credit I have available and, like you have to just ask yourself like am I willing to spend through the savings?
• 17:24
  Speaker 1: Am I willing to use my credit to get this off the ground?
• 17:28
  Speaker 1: Because when we do take the leap of faith, if we're beating ourselves up about money the whole way, it's just so much harder to get to the place where we can reliably replace that income.
• 17:37
  Speaker 1: You know, we want to consider things like the additional benefits that we lost and make sure that we.
• 17:43
  Speaker 1: You might not be able to buy health insurance the moment your business starts.
• 17:47
  Speaker 1: You might not be able to start a 401k your first year, but we do want to make sure that that, if that's something that's important to you, that that definitely gets worked into the numbers, worked into the budget and things like that.
• 17:58
  Speaker 1: Then, from a business perspective, we want to see leads, sales, deliverables.
• 18:02
  Speaker 1: We want to see systems.
• 18:03
  Speaker 1: We want to see that that the business like is viable, that the model makes sense, that the and that the model will work at the level of income that you want.
• 18:14
  Speaker 1: Not all business models are made to get big, you know.
• 18:17
  Speaker 1: So that's, that's another thing that you need to like really check on.
• 18:20
  Speaker 1: Well, if I needed to make twice as you know, not needed but if I wanted to double my revenue, could I do it in this business model is a very good question to ask.
• 18:28
  Speaker 1: Then we have the intangible things, like the, the focus.
• 18:31
  Speaker 1: We want to make sure that the the mindset.
• 18:33
  Speaker 1: You don't need a perfect mindset to do this, but you need.
• 18:36
  Speaker 1: You need to work that out a little bit, like you don't need to be perfect to take the leap.
• 18:42
  Speaker 1: I don't want to.
• 18:42
  Speaker 1: You know that's not what we're going with it, but we want to make sure that we're reliable, you know consistently, reliably taking actions, that our energy is going toward the thing that we want, that there's some enthusiasm that it, that it looks good, it feels good for you, and that there's a level of certainty that you know that you could do it, like, oh, there's a level of certainty like I'm going to be short on cash for a minute, but I know that this will work.
• 19:07
  Speaker 1: Like I know in my being that I could do it, and I would say that certainty is a that's.
• 19:13
  Speaker 1: That's a nice luxury not everybody gets that but that's a thing that you at least want to be looking towards when we're taking the sleep of faith.
• 19:21
  Speaker 1: So there's not like an exact time, right, but these are the things that I'm looking for, where one of these things like if you don't have clarity about your money, I would be real reluctant to be like quitter job if you don't have a reliable source of leads or you don't have a sales process or you don't have good deliverables, if you don't have clarity around your money, if you don't have savings credit or response to income at all, um, you, you do not need, like people, do this on their own.
• 19:50
  Speaker 1: Single moms start businesses and there's there's just a lot of pressure, and if that's the case for you, you have to really look at yourself and be like can I actually handle the pressure of this?
• 20:00
  Speaker 1: Because the pressure is no joke.
• 20:01
  Speaker 1: Um, and you can, you can if you can, but also you have to be kind to yourself and take care of yourself.
• 20:08
  Speaker 1: So those are the things that I look for when somebody's talking to me about hmm, can I do?
• 20:13
  Speaker 1: You think I could do?
• 20:14
  Speaker 1: You think I could take this thing full time?
• 20:15
  Speaker 1: Do you think it's viable?
• 20:16
  Speaker 1: Those are the things that I look for.
• 20:19
  Speaker 1: All right, I hope this was helpful.
• 20:21
  Speaker 1: I hope that you are taking your business this full time, if that's what your sweet little heart desires.
• 20:26
  Speaker 1: I love you, I appreciate you and I will talk to you next week.
• 20:30
  Speaker 1: It was my pleasure and joy to talk with you today.
• 20:35
  Speaker 1: Thank you for listening.
• 20:37
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• 21:00
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• 21:13
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