Join us for a chat with the Profit Architect, Dan Hackett, as we dive into turning your side hustle into a thriving business. In this episode, Dan shares essential tips on the financial details that can make or break your venture. Learn how to set the right prices for your services and discover the often-overlooked costs that can eat into your profits. Dan also highlights the importance of valuing your own work—something many entrepreneurs realize too late, especially in competitive fields like graphic design and SEO.
We'll also get into the nitty-gritty of financial planning and debt management. Dan talks about the benefits of being frugal and the importance of planning ahead to avoid financial traps. We'll discuss the impact of bank loans, the rise of FinTech, and how the employee-employer relationship is changing, with more people turning to vocational training and trades as viable career options.
In the final part of our episode, we focus on practical steps to protect your side hustle. We'll cover the benefits of partnerships and networking, crucial in today’s uncertain job market. We wrap up by celebrating the stories from the Side Hustle City community, showcasing inspiring examples of people who have turned their side hustles into their main gigs. Don’t miss this episode filled with actionable advice, humor, and the motivation to make your side hustle a major success.
As you're inspired to embark on your side hustle journey after listening to this episode, you might wonder where to start or how to make your vision a reality. With a team of experienced marketing professionals and a track record of helping clients achieve their dreams, we are ready to assist you in reaching your goals. To find out more, visit www.reversedout.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
Welcome to Side Hustle City and thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Koehler.
I'm joined by Kyle Stevie, mycohost, let's get started.
Allright, welcome backeverybody to the Side Hustle
(00:26):
City podcast today.
Special guest the profitarchitect, Dan Hackett.
How are you doing, Dan?
Doing great Adam, thanks, yeah.
So Dan and I were at the sameevent the other day for
Covington Business Council and Igot to talking to him and I
thought, man, these are like theperfect services for side
(00:47):
hustlers or for anybody with abusiness.
Actually, I mean, it's makingpeople who may not actually be
business people which I know abunch of them and teaching them
how to run their businesses moreeffectively.
I would say.
Speaker 2 (01:02):
It's really about helping people understand their
numbers, because you know youget a lot of business owners
from a sales or marketingbackground, so they understand
what to do to drive that topline.
And then they start to thinkabout well, what's my real cost
of providing that service orwhat's going on with overhead?
And the next thing you knowthey're working three times as
(01:24):
hard as they were, the revenue'scoming in but there's nothing
on the bottom line and theycan't quite figure it out
because they don't have thebackground for it.
Speaker 1 (01:32):
Well, you feel like you're working, you're working,
you're working and you're makingless money than you did when
you were at some company andsome people just it bums them
out and then they just want togo right back to working a job,
and I think that's one of themain problems with folks and I
talked to you a little bit aboutit when we were chatting but I
feel like there's a lot ofgraphic designers, which is a
(01:54):
great field, graphic design devdevelopers, people like that.
That's a skill that you caneither get a job with, you could
start freelance and theneventually go out on your own or
marketing skills any of thosekind of things that allow you to
freelance and then eventuallystart your own company.
I had a bunch of people likethat that I used to work with at
(02:16):
these agencies and they wouldstart these businesses and they
would start charging as much astheir agency used to charge
Right Three hundred threehundred fifty dollars an hour
yeah, charging as much as theiragency used to charge right $300
, $350 an hour and think that,oh, I'm just going to make this,
I'm just going to go out hereand people are going to pay the
same amount that they did when Iworked at this big 300 person
agency.
And I'm just going to workeight hours a day just designing
(02:37):
websites, logos, coding, foreight straight hours.
What they don't realize is no,you're going to be in QuickBooks
half the day.
You're going to be chasingclients down for money.
You're going to be buildingproposals that you can't charge
for just to win some work.
You may be doing RFPs Godforbid.
I hate RFPs.
It's like you don't know howmany people are bidding against
(02:58):
you.
Somebody's undercuttingeverybody.
But you spend more of your timeduring the day managing your
business, managing the books,and most of these people aren't
accountants, dan.
Speaker 2 (03:09):
No, they're definitely not accountants, and
you know.
Back to that point aboutrevenue, you know the first.
I guess the first mistakepeople make is to think any
revenue is good revenue and soyou're going out on your own.
Maybe you got a couple ofpeople to pay your price.
But in reality you threw out aprice and then they knocked you
(03:31):
down a little bit and you said,yes, because you have capacity.
All right, that doesn't makefor a bad deal.
But what you didn't reallythink about is all the demands
this person is going to put onyou.
And the next thing you know, ifyou really take all your effort
and you divide it by the hours,you know you're probably making
(03:52):
$25 an hour.
Speaker 1 (03:53):
Yeah, In reality.
Speaker 2 (03:55):
Yeah, no, that's what's happening in reality.
Speaker 1 (03:57):
People don't think about that and they don't want
to think about that.
No, they don't.
They want to just pretendthey're making $60 an hour or
whatever it is that they thinkthey're charging for.
But really, when you addeverything up all the unbillable
hours that you have and evenhours that you're like I can't
really charge them for that.
Emails I just tell people everyemail you send out is 15
(04:19):
minutes.
You got to read this otherperson's email Easy.
You got to comprehend what inthe world they're saying and
you've got to formulate aresponse.
Yeah, and some people love theemail.
Some clients are just email,email, email, right, and you
don't really factor that intowhat you're billing these people
.
Speaker 2 (04:36):
No, the challenge is you know you're trying to build
a business, whether it's a sidehustle or you just rolled out
the side hustle and it's yourfull-time job.
The problem is you're notreally willing to hold the line
on your value.
What you're, what you reallywant, is just more revenue and
you're just going to work andwork and work, and so the
(04:57):
clients.
It doesn't make those clientsevil because you have promised
them the world.
So when they turn around andask you for the world, that's on
you that you're now making 15bucks an hour, it's not on them.
That was the agreement.
So the really hard part aboutgoing out on your own is it's
not about articulating yourvalue.
(05:19):
You've got to understand yourvalue.
Yeah, understand your value,yeah.
And if you think you're justanother graphic designer and
you're competing with the personthree doors down, well then
it's a race to the bottom.
Same with marketing.
You know if you're in, you knowlet's just take, take an SEO
expert.
You know you can throw a rockand hit 10 of them.
(05:39):
Well, if you think you're justanother one of them because you
can't articulate why you'redifferent, well then you're
probably going to end up makingless than your salary of the job
that you just left.
Speaker 1 (05:53):
Yeah, cause I mean SEO expert.
I'm probably making six figures, you know, depending on where
you're at, if you're at a biggeragency.
Now, what are some of themistakes that you see people
make when they formulate abusiness Like I get a business
together.
What are some of the thingsthat you think people or whether
you know people should be doingupfront that they're just not
doing?
Speaker 2 (06:15):
Well, it always comes back to numbers, because
numbers means cashflow.
So the first thing you, you,you have to do is plot out the
first year or two.
You have to know your runway.
And when we talk about runway,that is revenues, less expenses.
But you got to break that down.
(06:35):
So if you already have a littlebit of revenue, well, you can't
just assume that more of it'scoming in Now.
You have to allocate time to gofind that revenue.
So where is that time going tocome from?
Yeah, and then you get to yourexpenses.
And this is where it getsreally personal, right, because
(06:56):
you're going out on your own.
So now you have to divide yourfixed versus your variable
expenses.
So your fixed is you got to eat.
Speaker 1 (07:04):
Yeah.
Speaker 2 (07:04):
You got rent mortgage , whatever it is, and then
there's a whole lot of thingsyou're spending money on that
you don't really have to spendmoney on.
Are you?
Yeah, but but are you, are youwilling to make those cuts?
You know you know any.
Anyone in financial planning oraccounting or just finance
generally will tell you thatthey'll.
(07:25):
They'll take a new businessesforecast and the rule of thumb
is you cut revenues in half andyou double expenses and then you
hand it back to them and yousay, okay, can you live on this?
Yeah, because if you can't, I'mnot, I'm not, it's not up to me
to decide what you need to do,but you just really need to take
(07:48):
a pretty hard, look in themirror and decide, because it's
you know it, it's not allunicorns and sunshine.
Speaker 1 (07:55):
Well, especially if you got young kids.
I mean, if you're, you know,I've seen a lot of people that
just can't, they can't hangbecause you got crazy things
that come up when you've gotkids.
You don't know what's going on.
You know, and you want to sendthem to good schools and all
this, and that you know I had todo without.
I mean, I started a rentalproperty business.
I had other things going on.
Uh, my tenants were livingnicer than me.
(08:16):
Yeah, and I would, just I would.
I'd buy a property, I'd gothere, I'd throw a sleeping bag
down and sleep on the plywoodafter I just ripped up the
carpets.
You know, I mean it was thingslike that that you'd be doing,
that you don't even realize.
And you know, you, as abusiness owner, this is your
baby.
Like, this company is going tobe your baby.
And I think a lot of peoplethey just they think that it's
(08:40):
going to be this great thing.
It's going to.
I'm going to go on my own.
I'm going to be this greatthing.
I'm going to go on my own, I'mgoing to make all this money.
You really like you've got tolive well below your means
because you never know when cashflow is going to become a
problem.
You're not buying the $800,000house out in the burbs.
Actually, you probably won'teven be able to get a loan for
it, because your income is sorandom Like you don't have money
, like you don't have aconsistent amount of income.
(09:01):
You don't have a W-2 anymore.
Banks hate you and your job asa business owner is probably not
to pay as much taxes as youshould.
So you're like man, where can Ifind write-offs?
And then the banks look at youlike you're a pauper Right.
Speaker 2 (09:16):
You go out on your own and, within a year, decide
that you want to apply for a newmortgage.
I mean, they're, they're theyjust run from you because the
only, in effect, the onlydocument that they'll really
accept or get comfortable withis the tax return.
You can create your ownfinancials all day long.
(09:37):
You can even hand them bankstatements all day long.
They want to see the tax return.
So if you're still in yourfirst year or you finished your
first year and you, so if you'restill in your first year or you
finished your first year andyou're still kind of ramping up,
it's not going to look thatgreat and they're not going to
lend you the money.
Speaker 1 (09:54):
That's one of the most frustrating things about
being an entrepreneur is youjust cannot borrow money for
stuff that regular people withregular jobs you're like these
guys are making as a household.
Maybe they're bringing in ahundred grand, they're living in
a 500, 600,000.
I'm like how in the heck didthey get a loan?
And I can't get a loan, youknow, and it's the tax return.
They look at it and they say,well, we can pull all this
(10:15):
depreciation out.
You can try some of that, but alot of times that doesn't even
work.
It's crazy.
Speaker 2 (10:20):
No, no, it doesn't work.
And that first year tax returnit's just going to, it's going
to show what it is.
It's a business that's startingup.
Well, you can tell them all youwant about all the clients that
you're about to sign or thatyou have signed.
They don't see it.
Yeah, and you know.
So you're asking someone whomakes a salary for a living
(10:43):
making decisions on loans.
You're asking that person totake a chance on you.
Speaker 1 (10:48):
Yeah.
Speaker 2 (10:49):
It's, it's not realistic, yeah, Now, yeah, you
know, when you get into credituh, credit unions and smaller
banks and you have arelationship, there might be
some leeway.
But you know, at the end of theday, all financial institutions
are heavily regulated and theyhave to, they have to
demonstrate to the feds alltheir lending ability and all
(11:12):
their lending criteria and alltheir decisions.
Speaker 1 (11:15):
Especially after 2008 .
I mean, it was a mess.
And then the Sarbanes-Oxleystuff and everything else, and
it's just like everything's justso tight now everything else,
and it's just like everything'sjust so tight now.
Speaker 2 (11:25):
Everything is so tight they are.
They are so highly regulated.
It's you know, in effect,they've kind of created the
sofas of the world because thebanks are so locked down they
couldn't, they couldn't do that,but regulatory wise, they
couldn't even do that.
So there's this, there's thisentire generation coming up that
(11:45):
says I don't really want todeal with all these banks and
all their rules.
I've got some flexibility herewith with, with SoFi and you
know all that.
All that FinTech, it's real.
I think a lot of it's beencreated from over-regulation of
the banking industry.
Speaker 1 (12:00):
Literally before you walked in, I'm doing a, I'm
doing a proposal for a companythat's like on deck.
They're like an on deck or asquare capital.
And square capital isinteresting too, because a lot
of these businesses say youstart a coffee shop, or my wife
has a, she's got square capitalRight, so she has a spa Right.
Yeah Well, she has a POS system.
(12:22):
It's square.
They know how much money she'sgot.
They know they do, they knoweverything about her.
So they're sending her offersfor these small business loans
like, hey, wouldn't it be niceif you had an extra fifty
thousand dollars right now tobuy products?
And she's like, oh yeah, Icould do this Right.
But most of those loans aregoing to be short term, like I
think they're like two years orsomething, some of them and
(12:44):
expensive and expensive.
So they show you how expensiveit's going to be.
Oh, you want to borrow 50,000?
Well, tack on another 10 tothat.
That's right.
So I mean, it's tough, butyou're right, these, all these
financial products, are a littlemore risky and I think they get
a lot of their money from likeinvestors.
Yeah Right, they're tellingtheir investors oh, you're going
to make, I don't know, 10% onthis instead of sitting in the
(13:05):
bank at 5% in our treasury rightnow.
But there's a lot of thoseproducts that are popping up and
investors that are accreditedcan work with guys like OnDeck
and give them a chunk of changeand then they go out and they
find small business owners whothe banks won't cater to.
Speaker 2 (13:21):
Yeah, and you know, and here we are in early 2024,
with a lot of businesses stillstruggling because they forgot
that they had to pay back theirEIDL loans.
Oh yeah, you don't need anotherright now.
Speaker 1 (13:36):
No, you got enough.
Take care of what's in front ofyou.
Well, debt is crazy right now.
Personal debt is insane, notjust business debt.
I mean, there's people out herethat are living off.
They're paying for inflationwith inflated interest rates yes
, with their own inflatedinterest rates on their credit
cards 24 percent and until thereis a blip of about five days
(13:57):
and then the house of cardsfalls down yeah, and it's
getting to that point yeah,delinquencies are are rising and
people don't understand, like Idon't think people understand
macro issues that we're facingright now.
I mean the government's printing.
I think they printed a trilliondollars.
They're printing a trilliondollars every 90 days.
I think Right now, that's crazy, that's just it.
(14:17):
What was it?
Since I think 2020 or something, they've printed like 20
something trillion dollars.
Yeah, it's nuts.
Speaker 2 (14:24):
And the the amount required from current tax
receipts just to pay interest onthe federal debt.
It just keeps on going there.
There comes a time when it justit doesn't make any sense
anymore.
Speaker 1 (14:40):
No, and then a majority of the jobs that are
being added right now aregovernment.
Well, not a majority, but a bigchunk of government jobs, and I
think I saw one time, when itgets over 10 percent of new jobs
created or government jobs, thesign of a recession, you know,
(15:00):
but along those same lines.
Speaker 2 (15:03):
I think we've been dealing with this for probably a
decade or two is many of thenew jobs that are just being
created in the service industryare still pretty low paying Sure
, and so you know you Healthcareservices and regular services,
restaurants, things like that,yeah, yeah, I mean God, how many
restaurants shut down duringCOVID?
Speaker 1 (15:24):
Oh, yeah, restaurants things like that yeah, yeah, I
mean god, how many restaurantsshut down during covid?
Oh yeah, but the ones with anapp like a donato's or papa
john's or something, those aredoing great because they were
prepared for it, they hadtechnology, but mom and pop
pizza shop, that got shut down,yeah.
And now you've got probably anew wave of people that are like
dipping their toe back intoentrepreneurship, hiring people
again.
But if you do look at it I meanyou look back four or five
(15:45):
years if you cut the chart offat just the right point, it
looks like things are goinggreat, right, but if you look
back, you see that big cliff wefell off of for jobs, for GDP,
for all these things that arejust now starting to kind of get
back to where we were.
But we've got additional debt.
The country has additional debtand I think I don't know if
(16:09):
this is true, but I heard thatthe tax revenue the government
collects and I think you mighthave mentioned something like
this the interest we pay on ourdebt, is actually higher, or
it's a certain percentage of ourGDP, and it's dangerously high
right now?
Speaker 2 (16:25):
Yeah, it's dangerously high.
It's like old, old time SouthAmerica high, yeah, which is
really, this is like JimmyCarter days coming high.
Yeah, well then.
Yeah, then it gets into somereally deep macroeconomics that
I don't you know, I don't fullyfollow.
But you know, at the end of theday, if people lose faith in
(16:45):
the strength of the dollar,which is happening, it just got
downgraded.
That has yeah, that has a lotof really negative consequences
for people.
Speaker 1 (16:55):
Yeah.
So I mean and this only makesit more important guys to think
about what kind of businessyou're starting or what kind of
business you're in, becausepeople you see that there's jobs
being created and everything,but I personally see a lot of
people losing their jobs or alot of people in jobs that they
don't like.
Or a buddy of mine calls meyesterday.
(17:17):
He says I think my company istrying to get people to quit, so
instead of them laying peopleoff, they're doing things like
hey, remember how I told you youcould come in two days a week?
Well, now you got to come inevery day.
And my buddy lives in Indiana,like pretty far out in Indiana,
works at a job here in Covington.
So that means he would have todrive in, pay to park every day
(17:40):
in downtown Covington.
And he's like wait a minute,you said two days a week, I'm
sorry, not two days a week, I'msorry, not two days a week.
So I think you've got littlegames like that being played
right now too.
Oh, the pendulum is swingingback.
Speaker 2 (17:53):
You know I tend to just look at things like a
pendulum.
You know, during COVID thependulum swung so far in favor
of the employees that theemployers were just just beside
themselves just trying to run abusiness, couldn't find anybody.
Yeah, I'm not.
I'm not really happy with itall going all the way in favor
(18:13):
of the employers there has to bethere has to be something in
the middle.
And right now I think that'swhat we're seeing is the
employers.
They're just trying to clawback and get back to the middle
because they they still have abusiness to run and and I I
think in part, they're kind ofjust getting tired of popping up
their head and looking forsomeone and realizing that
(18:34):
they're not around.
Speaker 1 (18:35):
Yeah, and then also it's just like scary Some of the
employees nowadays they justseem so litigious, like it seems
like if you hire somebody,they're not going to want to
come in, they're going to mouthoff.
They're going to you knowthey're not going to want to
come in, they're going to mouthoff, they're going to you know
they're going to say oh, I'm theemployee, this is, I demand
this and this and this.
If you don't give it to them,then something could happen.
I mean you're it feels likeyou're, you're, you're walking
(18:58):
on eggshells with theseemployees nowadays.
Speaker 2 (19:00):
Yeah, I think if, if you're in your 20s and you have
any mechanical ability, oh myGod, or you just have an
interest in it, they are linedup to hire you.
And then you have to do acouple of things, you have to
want to learn and you have toshow up.
And you know, I've told peoplein their 20s it's like you know,
(19:24):
go be an HVAC tech and learnthe business.
That's right, and maybe 10years later then you can own
your own.
But this, this is the perfectopportunity to get in to learn a
trade, and that just becauseyou start out as an employee, it
doesn't mean you're an employeethe rest of your life.
You can, you can, you can headout easily.
Speaker 1 (19:45):
Yeah, I told.
I tell people all the time Isay you can't trade your time
for money, forever, right.
And people are like, well, howdo you expect people to do that?
I said, well, you've got to bean employee first.
You have to be an employeefirst.
You got to live below yourmeans, save as much money as you
can and then eventually, yeah,do something like that.
I mean, even even in the highschools, why aren't we teaching
the trades anymore?
(20:06):
What happened to the vocations?
Not every kid is set up to goto college.
Cincinnati public schools has a19 out of 100 college readiness
score.
That means 80 of the kids therearen't going to college.
Right, they're just not.
I mean, you got 22 that knowhow to do math at the level they
need.
Like 32 can read at the levelthey need to read.
That's why the vocations werethere.
(20:28):
We, we got rid of a lot of and Iwas actually.
I was having lunch today with aguy who works at an hvc.
He's a sales guy for an hvc,commercial hvc company.
He walked around my upstairs.
He's like, oh, you got thissystem and that, you got carrier
this and that.
And I'm like, oh man, this guyknows his stuff right.
How many of those guys arerunning around nowadays?
Yeah, you know, I mean, and Ineed them.
I mean I had a guy come outhere and uh, snake our drain in
(20:50):
our kitchen the other day and wehave our own snake but it just
wasn't reaching right so we hadto get a guy come out.
Three hundred dollars.
He was here 10 minutes, threehundred dollars.
So why aren't they teaching thisstuff in the schools?
You know, junior, senior year,you get a guy talked about this.
You get a guy who wants to sellhis business the next five
years.
He doesn't have a successionplan.
Oh yeah, cash positive business.
(21:12):
He's got plenty of clients.
He's got a brand, anestablished brand.
Probably owns an area of thecity that he does really well in
.
You know he wants to sell hisbusiness in five years.
Doesn't have anybody to buy it.
Goes to the schools, says, hey,do you got any kids who want to
learn HVAC?
Yeah, we do.
Junior, senior year.
They go, maybe leave schoolearly, go work with this guy
(21:33):
when they graduate theyapprentice, yes, and then they
work with maybe Hamilton Countyor Kenton County or whatever to
get the money they need to getan SBA 7A loan and they have to
have a down payment.
So most of these kids aren'tgoing to have a down payment.
So you work with the county.
The county fronts them some ofthat money.
But I've seen businesses.
They're making a million and aquarter a year.
(21:54):
This guy maybe has an employertoo, got all of his equipment
paid for already.
He's going to sell the businessfor a million bucks less than
what he's grossing every yearand he's putting $200,000 in his
pocket.
Even if you bought thatbusiness and had the loan to pay
, you're still probably netting$100,000 a year.
That other hundred grand mightbe going back into pay the loan,
(22:15):
but you're paying.
Your loan is paying off aprofitable business, not student
loans.
Speaker 2 (22:23):
Yeah, that's right, that's right.
But so here's what happens withthat seller more, more often
than not, is they have a priceand let's assume it's a
reasonable price, which is,which is kind of a big
assumption but they can sell toa competitor for a reduced price
because the competitors isgoing to, is going to beach into
(22:44):
the ground because they knowwhere to look.
Um, you're probably.
If you're a million, 2 million,you're too small for private
equity.
They're not, and and their,their number may or may not be
good unless you happen to fit,you know, some sort of perfect
scenario for them.
More often than not, you'regoing to have to sell for less
than you think it's worth sothat you can get cash, or you
(23:06):
have to sell and get some cashand give and give a note yeah,
that's right, it paid over time.
And then if you don'tunderstand your numbers, if you
don't really understand how youmake money, then the person
buying the business may not knowany better than you.
So a lot of those seller notes,they kind of collapse and I've
(23:30):
seen a number of times when theseller ends up getting back
inside the business because itwas about to fail.
Speaker 1 (23:37):
Oh yeah, my cousin was one of them.
She sold a business to a guy.
Not surprising he ended up.
It was a tech business and heended up not doing a whole lot
with it.
Bought it thinking he was gonna.
You know, it was a babysittingapp and it was like he just
thought you know, maybe thisbabysitting app was gonna work
right.
I don't know whatever happened.
You know I wasn't superinvolved in it at all.
Yeah, um, but then he gave herthe business back and then she
(24:00):
sold it again like a week laterto somebody else who was
interested in it originally, Ithink.
So it's crazy that you knowthere's there's stuff out there
like that.
But you know, these guysprobably want to go to Florida.
You know I've been plumbing forthe last 30, 40 years.
I've been, you know, doingelectrical work.
I'm going to go sit on a boat.
I'm going to take this millionbucks, I'm going to put it in
(24:22):
whatever else I got saved up andI'm just going to chill out and
go fishing and maybe go on atrip to Italy or whatever.
They don't plan on coming back.
They'd love for somebody youngto come in here, buy one of
these businesses, modernize it,maybe do some of the things that
you're talking about that thisguy didn't do, because he's been
running a business before.
Quickbooks was even a thing,everything is in a ledger.
(24:44):
Everything's on a paper ledger.
That phone just keeps ringing.
It just keeps ringing, right,and it kept bringing more and
more because less and lesspeople were interested in the
trades, right?
It's wild to me, but yeah, Imean, there's a lot of people
and I you know my point with allthis economic stuff that's
going on right now, it's moreimportant now to kind of control
your own livelihood.
(25:04):
I always thought, you know, andI worked for corporate for a
little while and I just I can't,I couldn't stand it.
I'm just not built for that,maybe just my personality type.
But I want to be in control ofmy own life.
I don't want and people thinkthere's security in working for
a company, right, I don't careif it's P&G or whatever.
You're a number.
This isn't grandpa, his pensionand he worked for the railroad
(25:26):
and you know he worked there for40 years and everything was
good.
It's not like that anymore.
You're relying on somebody else, another man or woman or
whatever.
You're relying on them to beable to deliver, for you to be
able to pay your kids school,for you to be able to pay your
mortgage, for you to be able topay your kid's school, for you
(25:46):
to be able to pay your mortgage,for you to be able to pay your
car bill.
Why would you rely on someoneelse when you can rely on
yourself If you have?
And I think the problem is, Ithink people don't have the
confidence.
They don't know how to build abusiness Like the stuff that you
know how to do, like,essentially, if they had you
(26:08):
they wouldn't be afraid as much.
And that's just in myexperience.
Speaker 2 (26:12):
Yeah they'd, they'd have a lot more clarity.
So you know first to that point, if you know, if you've got a
listener working for a biggercompany, the first thing that
you want to think about is howmany changes there are to the
S&P 500 every couple of years,and I can think of three big
companies.
I've worked I've spent most ofmy life in small business but
(26:34):
I've done some.
I've done some bigger companystuff and they're not around
anymore.
Speaker 1 (26:39):
That's right.
Speaker 2 (26:40):
They're just, they're just gone.
Speaker 1 (26:41):
That's right.
Speaker 2 (26:42):
And yeah, you can find.
You can find a similar positionat another company maybe, but
I'm not sure.
Speaker 1 (26:49):
You probably downgrade or you take a lateral
move.
Yeah, like I mean, you knowthere's probably guys that
thought Sears was a greatcompany Exactly, jcpenney.
You know Sears was a greatcompany for a while.
I mean they built a tower inChicago, right, and it's like
Sears, like, yeah, I want to gowork for Sears.
Ge, look what's going on, ge,they're breaking GE up right now
.
You know one of the greatestcompanies, the auto industry.
(27:11):
You know guys used to think, oh, just go work at the.
You know GM be there for 40years.
And now, look, you know, I mean, it's just, it's wild.
I mean you're right.
Speaker 2 (27:29):
Yeah, no to your point.
There is no better time to tryto control your destiny than
right now, and I think to dothat when we think about a side
hustle is, yeah, if you canstart it first as a side hustle
before you have to take theplunge, all the better.
You know, you know, one of thebooks that it's like an old
classic that everyone shouldread is the E-Myth.
Oh, yeah, and as I always bringthis up, because now it's been
(27:52):
I don't know 30 years or so, butwhenever you hear someone talk
about work on your business, notin your business, that's from
the E-Myth.
Speaker 1 (28:00):
Yeah.
Speaker 2 (28:01):
And is that?
Speaker 1 (28:02):
where that came from.
Is that where the saying camefrom?
Oh, interesting yeah.
Speaker 2 (28:05):
Yeah, yeah, no one can claim that as original.
Okay, it came from the e-myth,I didn't know that.
Speaker 1 (28:10):
That is exact.
That's like my wife's favoritesaying now.
Speaker 2 (28:15):
Yeah, no, go read the e-myth and Michael Gerber who
wrote it?
He was a consultant.
His point is this and this isthe lesson for for people
listening on the side hustle,you've got his example, I think
is a dog groomer.
So so, okay, you're number twoat the dog grooming place and
(28:35):
you and your perception is, theowner is making all kinds of
money where you're just slavingaway at minimum wage or
something like that, and youthink you know what I got a
better idea away at minimum wageor something like that, and you
think you know what I got abetter idea.
I'm going to go out and do myown and I'm going to charge a
little bit less than this guyand everyone's going to come to
me and I'm just going to makemoney hand over fist.
(28:57):
Gerber's point is, first of all, that it doesn't happen.
It's not that easy and in theend, all you've done is you've
traded.
You've traded a job that youkind of liked and you kind of
got along with the owner for ajob where now your boss is a
lunatic.
Speaker 1 (29:16):
And that's his point.
I love it.
Yeah, yeah, that's his point.
Well, and you don't have oneboss anymore.
Now you got however many bossesyou know, and it's really about
brand.
Right, your brand is what isvaluable.
I mean, look at apple, it'sapple's brand, right, they
charge a hundred times what itcosts to make those phones right
, but you're buying the brand.
(29:37):
Yeah, and your boss at the doggrooming place already has a
brand.
They already have anestablished brand.
They have relationships.
Everyone knew where to go.
Everybody knew where to go.
Everybody knew where to go.
They got the right location.
I mean, there's a bunch ofthings, a bunch of factors you
have to consider if you're goingto go out and do it.
Where are you going to belocated?
Yeah, yeah, maybe he did hisresearch.
(29:57):
She did her research, found out, oh, there's so many households
with dogs in this neighborhoodand they have so much disposable
income.
Well, here you go in aneighborhood that doesn't have
as many dogs.
Yeah, maybe the income isn't asmuch, but you can afford the
rent there.
Yeah, so he might have startedout.
She might have started out inone of those crappy
neighborhoods and eventuallyworked their way up to where
(30:17):
they could pay the rent in thisnicer neighborhood, right.
So I mean there's so much stuffyou got to think about.
But I mean right now I alwaystry to tell people, at least get
some kind of a little sidehustle going so that you have a
backup, like you have something,some multiple streams income.
You know the book multiplestreams income.
I read that years ago when Iwas probably 20, 21.
(30:39):
And I read that and I was likeI get it.
Like the strategies he talksabout is mostly real estate
stuff, right, get some rentalproperty, things like that.
But there's so many ways tomake money Now.
You could deliver medicalsupplies, you could drive Uber,
you could do DoorDash.
I mean you could do a bunch ofstuff sell stuff on eBay.
I could go right over here toDollar Tree, buy a bunch of
books for $1.25 that are sellingon Amazon for $20.
(31:02):
If I really wanted to, andpackage them all up and send
them out, if I was thatdesperate for money.
You know you could do all kindsof stuff like that.
There are so many ways to makemoney now doing side hustles
than it was when we were younger.
Speaker 2 (31:15):
I mean, it was nothing.
Speaker 1 (31:15):
You just went.
You went into the military.
You hope you play baseball,maybe like McDonald's.
Speaker 2 (31:20):
Yeah, or.
Speaker 1 (31:21):
McDonald's, like there was a handful of things
that you could do, right.
It was either, yeah, militaryor go to college.
Yeah, or maybe go into thetrades.
I mean, that was really whatthere was out there at the time.
Now it's just so many options.
Speaker 2 (31:34):
Oh, yeah, I think if you're thinking about a side
hustle or you have one, there'sone thing that not a lot of
people talk about, and that isthe value of networking yes, and
in-person networking.
And there's a couple of reasonsthat you want to do that,
particularly if you have a sidehustle is, first of all, you may
(31:55):
not be very good atarticulating your value, so you
got to show up and keep showingup and just keep trying to
figure out the right set ofwords that articulate your value
without boring someone to death.
Speaker 1 (32:08):
True, I mean I got to do that in politics.
Yeah, all the time I mean Idon't know what the hell I'm
talking about, like when I firststarted out, and then
eventually you realize you can'texplain in detail what we just
talked about.
Like you have to simplify thatmessage and be like hey, do you
like being poor?
Speaker 2 (32:23):
No vote for me, that's it message and be like
hey, do you like being poor?
Nope, vote for me.
That's it, that's right.
I get it.
Yeah, that's right.
You know?
the other thing that networkingto me, live networking does is
it can also validate your idea,so you may have a side hustle
and it may be a small sidehustle and now you're going out
and just meeting people in thecommunity who want to meet you
(32:44):
and you explain what you do andyou, you can just look at their
face yeah, yeah, I don't get it,I don't get it, I don't get it.
Well, that's homework for you,that's right.
Keep, keep working it, keepworking it, keep working it,
keep getting it better.
Then the other thing with withnetworking, that not, no, not
(33:05):
enough small businesses or evenside hustle owners do, is I.
I don't think they believeenough in you.
Never know.
I met you.
I met you because you neverknow.
Yeah, it was you know I didn'tknow you were coming to that and
, and you know we, just you knowI didn't know you were coming
to that.
No, and you know, we just wejust happened to start talking,
(33:26):
which was great.
But if you don't believe in,you never know.
Well, you, you can't sendenough emails to overcome that.
Emails are.
Speaker 1 (33:37):
I get rid of those.
I can smell an email from amile away, like I see the name
and I'm like that's fake andjust get rid of it.
I don't read most of thesemarketing emails that come out
and the LinkedIn things thepeople that friend you on
LinkedIn and immediately you geta message after that Like we
can help you with your whatever.
It's brutal.
Oh, it's so bad.
It's brutal.
Who does that?
It's like a strategy, likethat's their main strategy and
(34:00):
it's all.
It's like the guys that wouldtell you back in the day talk to
as many girls as you can.
One of them is going to say yes, you know, like that whole deal
.
You know, talk to them all.
One of them will say well,that's their, that's the email
theory, that's their strategy.
What is it?
Spray and pray, spray and pray,that's like the whole thing,
that's right.
But it's you know.
You never know.
(34:21):
You never know it could bepositive or negative.
Prepare for the.
You never know what's going tohappen.
I mean, how many people fiveyears ago thought that we'd be
in the situation we're now Rightand they have small businesses
or they're working for somebody.
Now they're in the streets,right and they're, you know,
delivering pizzas or somethingright now because their job that
they were making good money at,not that good anymore,
especially if you're in a citylike Cincinnati.
(34:43):
We're pretty stable here.
People want to help?
Speaker 2 (34:46):
Yeah, they do.
People want to help.
Give them a reason, articulateyour value and and and tell them
what you're looking for and if,if I can connect you to someone
, I will absolutely do that.
The other thing on a sidehustle, that that I would do, I
would work really hard on beforeI even went out on my own, and
(35:06):
that is just the idea of jointventures or affiliations.
I don't want to make it realformal because it's not, but you
look at who get, find acomplimentary business, who's
calling on the same customers,and why don't you two make a
deal and it can be a monetarydeal.
It doesn't have to be amonetary deal, but start, get,
(35:29):
get another ally so that youknow if, if, if you're calling
on, well, if, if you're callingon a marketing firm or you're
calling on another firm andthey're not ready for you,
they're not ready for reversedout because they just plead
poverty.
It's like Adam, we love whatyou do, we just don't have the
(35:52):
money, well, chances are that'sclient for me.
Yeah.
Speaker 1 (35:58):
And that's right.
Speaker 2 (35:59):
And the reverse.
That's actually a really goodpoint.
Reverse is equally true.
Speaker 1 (36:02):
Hey, they just told me they don't have any money.
I need to connect them with aguy who can help them get their
books straight and figure outtheir bottom line.
Like, what's going on here?
What are you doing wrong Tohire Adam?
Yeah, yeah.
Speaker 2 (36:13):
Why aren't you?
Speaker 1 (36:13):
growing.
If you can't grow withadvertising, then you might be
able to look at some of yourexpenses and things you're
spending money on right now.
Speaker 2 (36:21):
We need to dig in and we just need to get a little
bit smarter about pricing, andthere may be some bundling that
you can do some things to juststart to generate that, that
profit part of the you know partof the discussion.
If we were to sit down with acommon client, you and I would
quickly um, we wouldn't.
(36:41):
Um, we wouldn't be at at atodds or anything.
But I want business owners tothink more about profit than
revenue.
Speaker 1 (36:51):
Yeah.
Speaker 2 (36:52):
And people think well , if I don't have revenue, I
can't grow.
I'm not suggesting that Growthis awesome.
Growth is important Revenue.
When you talk about revenue,you're talking about growth.
When I talk about profit, I'mtalking about stability.
Yep, and if I don't have thatstability, I really can't invest
(37:13):
much more in growth.
Speaker 1 (37:15):
Yeah, people just like talking about growth.
They do it's sexy, they liketalking about it.
Oh, we doubled our revenue lastyear.
Speaker 2 (37:22):
It's mostly untrue.
Did you double your profit?
Oh, no, not at all Not couldn't, you couldn't.
Yeah, it's just not possibleMathematically, right, you
couldn't cause.
You probably have a 20% netprofit margin anyway, so you
could double.
So, yeah, your bottom lineprobably improved, but it
probably didn't improve by thesame ratio.
(37:42):
If you doubled your profits,your profits, your profits
didn't double.
Speaker 1 (37:47):
No, yeah, if you doubled your revenue?
Speaker 2 (37:49):
Yeah, you spent a lot more.
You spent a lot more to to getthat revenue.
Speaker 1 (37:54):
You probably spent a lot in advertising or you did
something, and isn't there likea percentage people need to do?
Like what is it?
It's like a third or something.
People ask me that a lot.
Speaker 2 (38:03):
Yeah, it's so industry dependent, but I, you
know, 10 to 20% feels a lotbetter to me than a third.
But you know, was it Ogilvy orsomeone said that?
Speaker 1 (38:16):
You know I think it was Ogilvy 50% of my advertising
is wasted.
I just don't know which 50%.
Speaker 2 (38:22):
Yeah, he's absolutely right.
But you know, the other thingthat I think someone with a side
hustle should recognize, eventhough they'll say they want to
have this problem is fast growthwill kill a business faster
than slow growth Any day.
Any day, it's proven.
Yeah, because with fast growthyou're outrunning your cash, oh,
(38:48):
and then you borrow, and nowyou're borrowing to feed growth,
and it takes one thing to gowrong.
It takes one big customer todelay payment or not pay.
Oh, that's a good point For asmall business that could just
cripple you.
It's, and all of a sudden it'sa small business.
I can just cripple you.
Speaker 1 (39:06):
It's a house of cards , that's just debilitating if
you're, if you have a bigcustomer, that's just not, or
you, I mean, we've got customersthat are net 90, net 90, well,
yeah, so I gotta carry that, Igotta pay my employees, I gotta
let them you know, and and Iwait on a check.
I mean it's great when you getit 90 days later, yeah, but it
sucks to have to wait like that.
And it's like these are bigcustomers, the bigger the
(39:27):
customer probably, the more, thelonger they wait to pay you the
fortune 1000.
Speaker 2 (39:31):
Yeah, when do you get paid?
When they, when they tell youthat they're going to pay you?
Speaker 1 (39:35):
Yeah, but imagine being a small business and
taking on one of these bigclients that are net 60, net 90,
you know not every opportunityis a good opportunity.
Speaker 2 (39:44):
That's right.
So if you're selling productand you're not getting paid for
60 or 90 days, think about allthe cash that's going out to
build the product, for the wagesand everything before you
actually get paid for it.
Speaker 1 (39:59):
Yeah.
Speaker 2 (40:00):
Because it's not like you're setting the margin on
that either.
No, so the big company istelling you basically the margin
they want to purchase at andwhen they're going to pay you.
Yep, I don't really like thoseodds, those suck.
Speaker 1 (40:14):
It's great for them.
It's great for them.
They're smart, they know whatthey're doing.
Great for them.
Speaker 2 (40:18):
They've been doing it for years.
Great for them all day long.
I had a big, a big company Idealt with once as a CFO.
They gave us a choice you canget paid within 15 days with
something like a 4% haircut, oryou can wait 90 days and get
paid in full.
Oh, wow, it's really tough mathbecause it's never a pure math
(40:43):
problem.
You've got all everything elsegoing on in your business to try
to figure out.
Well, can I really live withoutthat cash?
Even though I I don't want totake the 4% haircut, most people
will just take the haircutbecause they got to have the
cash for other reasons.
Speaker 1 (41:00):
That's right.
Speaker 2 (41:00):
Yeah, wow, because it and often because you're trying
to grow too fast, you're outrunning your cash.
That's wild.
Speaker 1 (41:07):
Well, Dan, tell us about your business, Tell us how
people can reach out to you and, uh, and, and and what
circumstances you would likethem to reach out to you.
Speaker 2 (41:15):
Yeah, so the the profit architectcom is my site.
I am a CPA.
I have done um a couple ofhundred planning sessions for
small businesses.
I've been a president and CEO anon-family member CEO of a
manufacturing company, so I'veseen just about every possible
(41:37):
side of small business ownership.
At this point oh yeah, I havemany chapters in my book so that
I'll get around to writing oneday.
But where I am now is much morefocused on small businesses and
helping them get moreprofitable quickly.
And the reason is I wish ithadn't taken me a couple of
(42:00):
decades to realize it, butthat's just where we are.
A couple of decades to realizeit, but that's just.
That's just where we are.
You, reversed out, could come toa small business and all of
your ideas are great and they'regoing to be successful.
What's really in the mind ofthe small business owner is not
only do I not sure I have enoughmoney right now for it, I don't
(42:24):
know where it's going to be insix months.
So it's all that lack ofcertainty.
That's what holds people backfrom making decisions that could
be really good for theirbusiness.
Yeah, and so you know.
After, after going through youknow, all day planning sessions
with businesses and crafting allthese great ideas and see most
(42:45):
of them not really implemented.
I just finally realized if Ican just sit down with them and
get some quick wins and clean upwhat's going on inside their
business because I'm not themarketing strategist that's for
you.
I'm totally on the inside andhelping with pricing and
managing expenses.
If all of a sudden that bottomline grows by 10% or 20%, that
(43:11):
business owner literally feelsbetter about everything and is
willing to start making theright investments to grow the
business.
Yeah, because it's stressful,it's very stressful, yeah, it's
very stressful, yeah, it's verystressful.
So until we get there, it's uh.
You know, it's really hard toget their attention for for
someone like you, becausebecause intellectually they know
(43:36):
it's a good idea, but they have, but they're so uncertain of
the next six months that theydon't want to commit additional
expense to it.
Speaker 1 (43:47):
Yeah, they're like well, what if it doesn't come in
?
What if the you know it doesn't, this marketing that we're
doing doesn't bring us any moreclients?
Then we're in bad shape becausenow we're spending money on
this and we don't.
Yeah, I mean it's.
I can see that.
Yeah.
Speaker 2 (43:59):
So you know, I I talked before about networking
and you got to articulate yourvalue.
Well, I I talked before aboutnetworking and you got to
articulate your value.
Well, I'll put a littledifferent spin.
What problem do I solve?
The problem I solve isinconsistent profitability.
That's all I do.
Inconsistent profitabilityBecause if we can get to
consistent profitability, much,much better decisions are being
(44:21):
made.
So I do that.
I've got proprietary softwareor I can pick apart a company.
But really, more importantly, Ido it through workshops and
these are being made.
So I do that.
I've got proprietary softwarewhere I can pick apart a company
.
But really, more importantly, Ido it through workshops, and
these are educational workshops.
Right now they're local.
I'll have one virtual soon andwe'll we'll get that in the show
notes or something like that.
I'll get the link and it is soeducational.
(44:42):
I tell people leave your walletat home because there's nothing
to buy.
Speaker 1 (44:47):
Oh, wow.
Speaker 2 (44:48):
And I will take you through several different ideas
and I more or less guaranteethat anyone who participates is
going to walk away with a coupleof ideas and, more importantly,
a different way to think abouttheir business, interesting what
those numbers are reallytelling them.
Yeah, and then if you know downthe road, if you really like it
(45:10):
, if we start to work together,that's great.
But I do that with a guaranteedROI, because now I know your
business so well and I'vemodeled it out.
You're ready.
You're prepared Because you'retelling me what you want to do
and I'm just helping you getthere, wow.
So, it's a lot of fun.
Speaker 1 (45:26):
It's good to have a guy like you here.
I mean, for the smallbusinesses around town.
I mean, no, that's so important.
Yeah, I mean, if you're andthis is, it's funny, because
governments are interested ineconomic development, right,
local governments are, oh,economic development, let's
bring in more businesses, butthat's kind of where it ends.
Oh, yeah, it's not.
Hey we've got okay, great thatyou're here, great that we have
(45:47):
more small businesses startingup.
But go talk to Dan Hackett like, get this going and and and and
.
Figure this stuff out, becauseit's going to make them stick
around.
And what is it like?
A 10 times more to find a newclient for me, right?
It costs me 10 times more tofind a new client than just get
money from existing clients.
Well, it's the same thing witheconomic development Like it's
(46:08):
going to cost you 10 times more.
It's going to take 10 timesmore effort to bring in a
business to say, covington, thanit is to make sure that an
already existing business issuccessful.
Speaker 2 (46:20):
I would rather have five Covington businesses and
five people over the next yearthan than work ourselves to
death to to bring in one thatbrings in 50 jobs, because what
we also see a lot in theheadlines is we don't even know
how long those 50 jobs stickaround.
(46:40):
That's right, but if if I'mgrowing my business from 10 to
15, I'm a keeper, I'm going tobe around.
Those are, those are rock solidjobs.
Speaker 1 (46:49):
When you get to that point.
Speaker 2 (46:50):
And that's right, and that then you're right.
That's what drives the economy.
Speaker 1 (46:54):
Yeah Well, I really appreciate you coming on the
show today and good luck witheverything and good luck helping
people get their businesses ingood shape.
Yeah Great, I appreciate it,adam.
A lot of fun, all right, thankyou.
Is in good shape.
Yeah, great, I appreciate it,adam.
A lot of fun, all right, thankyou.
Thanks for joining us on thisweek's episode of Side Hustle
City.
Well, you've heard from ourguests.
Now let's hear from you.
Join our community on Facebook,side Hustle City.
(47:14):
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
We'll see you there and we'llsee you next week on the show,
thank you.
Welcome to Side Hustle City and thanks for
joining us.
Our goal is to help you connectto real people who found
success turning their sidehustle into a main hustle, and
we hope you can too.
I'm Adam Koehler.
I'm joined by Kyle Stevie, mycohost, let's get started.
Allright, welcome backeverybody to the Side Hustle
(00:26):
City podcast today.
Special guest the profitarchitect, Dan Hackett.
How are you doing, Dan?
Doing great Adam, thanks, yeah.
So Dan and I were at the sameevent the other day for
Covington Business Council and Igot to talking to him and I
thought, man, these are like theperfect services for side
(00:47):
hustlers or for anybody with abusiness.
Actually, I mean, it's makingpeople who may not actually be
business people which I know abunch of them and teaching them
how to run their businesses moreeffectively.
I would say.
Speaker 2 (01:02):
It's really about helping people understand their
numbers, because you know youget a lot of business owners
from a sales or marketingbackground, so they understand
what to do to drive that topline.
And then they start to thinkabout well, what's my real cost
of providing that service orwhat's going on with overhead?
And the next thing you knowthey're working three times as
(01:24):
hard as they were, the revenue'scoming in but there's nothing
on the bottom line and theycan't quite figure it out
because they don't have thebackground for it.
Speaker 1 (01:32):
Well, you feel like you're working, you're working,
you're working and you're makingless money than you did when
you were at some company andsome people just it bums them
out and then they just want togo right back to working a job,
and I think that's one of themain problems with folks and I
talked to you a little bit aboutit when we were chatting but I
feel like there's a lot ofgraphic designers, which is a
(01:54):
great field, graphic design devdevelopers, people like that.
That's a skill that you caneither get a job with, you could
start freelance and theneventually go out on your own or
marketing skills any of thosekind of things that allow you to
freelance and then eventuallystart your own company.
I had a bunch of people likethat that I used to work with at
(02:16):
these agencies and they wouldstart these businesses and they
would start charging as much astheir agency used to charge
Right Three hundred threehundred fifty dollars an hour
yeah, charging as much as theiragency used to charge right $300
, $350 an hour and think that,oh, I'm just going to make this,
I'm just going to go out hereand people are going to pay the
same amount that they did when Iworked at this big 300 person
agency.
And I'm just going to workeight hours a day just designing
(02:37):
websites, logos, coding, foreight straight hours.
What they don't realize is no,you're going to be in QuickBooks
half the day.
You're going to be chasingclients down for money.
You're going to be buildingproposals that you can't charge
for just to win some work.
You may be doing RFPs Godforbid.
I hate RFPs.
It's like you don't know howmany people are bidding against
(02:58):
you.
Somebody's undercuttingeverybody.
But you spend more of your timeduring the day managing your
business, managing the books,and most of these people aren't
accountants, dan.
Speaker 2 (03:09):
No, they're definitely not accountants, and
you know.
Back to that point aboutrevenue, you know the first.
I guess the first mistakepeople make is to think any
revenue is good revenue and soyou're going out on your own.
Maybe you got a couple ofpeople to pay your price.
But in reality you threw out aprice and then they knocked you
(03:31):
down a little bit and you said,yes, because you have capacity.
All right, that doesn't makefor a bad deal.
But what you didn't reallythink about is all the demands
this person is going to put onyou.
And the next thing you know, ifyou really take all your effort
and you divide it by the hours,you know you're probably making
(03:52):
$25 an hour.
Speaker 1 (03:53):
Yeah, In reality.
Speaker 2 (03:55):
Yeah, no, that's what's happening in reality.
Speaker 1 (03:57):
People don't think about that and they don't want
to think about that.
No, they don't.
They want to just pretendthey're making $60 an hour or
whatever it is that they thinkthey're charging for.
But really, when you addeverything up all the unbillable
hours that you have and evenhours that you're like I can't
really charge them for that.
Emails I just tell people everyemail you send out is 15
(04:19):
minutes.
You got to read this otherperson's email Easy.
You got to comprehend what inthe world they're saying and
you've got to formulate aresponse.
Yeah, and some people love theemail.
Some clients are just email,email, email, right, and you
don't really factor that intowhat you're billing these people
.
Speaker 2 (04:36):
No, the challenge is you know you're trying to build
a business, whether it's a sidehustle or you just rolled out
the side hustle and it's yourfull-time job.
The problem is you're notreally willing to hold the line
on your value.
What you're, what you reallywant, is just more revenue and
you're just going to work andwork and work, and so the
(04:57):
clients.
It doesn't make those clientsevil because you have promised
them the world.
So when they turn around andask you for the world, that's on
you that you're now making 15bucks an hour, it's not on them.
That was the agreement.
So the really hard part aboutgoing out on your own is it's
not about articulating yourvalue.
(05:19):
You've got to understand yourvalue.
Yeah, understand your value,yeah.
And if you think you're justanother graphic designer and
you're competing with the personthree doors down, well then
it's a race to the bottom.
Same with marketing.
You know if you're in, you knowlet's just take, take an SEO
expert.
You know you can throw a rockand hit 10 of them.
(05:39):
Well, if you think you're justanother one of them because you
can't articulate why you'redifferent, well then you're
probably going to end up makingless than your salary of the job
that you just left.
Speaker 1 (05:53):
Yeah, cause I mean SEO expert.
I'm probably making six figures, you know, depending on where
you're at, if you're at a biggeragency.
Now, what are some of themistakes that you see people
make when they formulate abusiness Like I get a business
together.
What are some of the thingsthat you think people or whether
you know people should be doingupfront that they're just not
doing?
Speaker 2 (06:15):
Well, it always comes back to numbers, because
numbers means cashflow.
So the first thing you, you,you have to do is plot out the
first year or two.
You have to know your runway.
And when we talk about runway,that is revenues, less expenses.
But you got to break that down.
(06:35):
So if you already have a littlebit of revenue, well, you can't
just assume that more of it'scoming in Now.
You have to allocate time to gofind that revenue.
So where is that time going tocome from?
Yeah, and then you get to yourexpenses.
And this is where it getsreally personal, right, because
(06:56):
you're going out on your own.
So now you have to divide yourfixed versus your variable
expenses.
So your fixed is you got to eat.
Speaker 1 (07:04):
Yeah.
Speaker 2 (07:04):
You got rent mortgage , whatever it is, and then
there's a whole lot of thingsyou're spending money on that
you don't really have to spendmoney on.
Are you?
Yeah, but but are you, are youwilling to make those cuts?
You know you know any.
Anyone in financial planning oraccounting or just finance
generally will tell you thatthey'll.
(07:25):
They'll take a new businessesforecast and the rule of thumb
is you cut revenues in half andyou double expenses and then you
hand it back to them and yousay, okay, can you live on this?
Yeah, because if you can't, I'mnot, I'm not, it's not up to me
to decide what you need to do,but you just really need to take
(07:48):
a pretty hard, look in themirror and decide, because it's
you know it, it's not allunicorns and sunshine.
Speaker 1 (07:55):
Well, especially if you got young kids.
I mean, if you're, you know,I've seen a lot of people that
just can't, they can't hangbecause you got crazy things
that come up when you've gotkids.
You don't know what's going on.
You know, and you want to sendthem to good schools and all
this, and that you know I had todo without.
I mean, I started a rentalproperty business.
I had other things going on.
Uh, my tenants were livingnicer than me.
(08:16):
Yeah, and I would, just I would.
I'd buy a property, I'd gothere, I'd throw a sleeping bag
down and sleep on the plywoodafter I just ripped up the
carpets.
You know, I mean it was thingslike that that you'd be doing,
that you don't even realize.
And you know, you, as abusiness owner, this is your
baby.
Like, this company is going tobe your baby.
And I think a lot of peoplethey just they think that it's
(08:40):
going to be this great thing.
It's going to.
I'm going to go on my own.
I'm going to be this greatthing.
I'm going to go on my own, I'mgoing to make all this money.
You really like you've got tolive well below your means
because you never know when cashflow is going to become a
problem.
You're not buying the $800,000house out in the burbs.
Actually, you probably won'teven be able to get a loan for
it, because your income is sorandom Like you don't have money
, like you don't have aconsistent amount of income.
(09:01):
You don't have a W-2 anymore.
Banks hate you and your job asa business owner is probably not
to pay as much taxes as youshould.
So you're like man, where can Ifind write-offs?
And then the banks look at youlike you're a pauper Right.
Speaker 2 (09:16):
You go out on your own and, within a year, decide
that you want to apply for a newmortgage.
I mean, they're, they're theyjust run from you because the
only, in effect, the onlydocument that they'll really
accept or get comfortable withis the tax return.
You can create your ownfinancials all day long.
(09:37):
You can even hand them bankstatements all day long.
They want to see the tax return.
So if you're still in yourfirst year or you finished your
first year and you, so if you'restill in your first year or you
finished your first year andyou're still kind of ramping up,
it's not going to look thatgreat and they're not going to
lend you the money.
Speaker 1 (09:54):
That's one of the most frustrating things about
being an entrepreneur is youjust cannot borrow money for
stuff that regular people withregular jobs you're like these
guys are making as a household.
Maybe they're bringing in ahundred grand, they're living in
a 500, 600,000.
I'm like how in the heck didthey get a loan?
And I can't get a loan, youknow, and it's the tax return.
They look at it and they say,well, we can pull all this
(10:15):
depreciation out.
You can try some of that, but alot of times that doesn't even
work.
It's crazy.
Speaker 2 (10:20):
No, no, it doesn't work.
And that first year tax returnit's just going to, it's going
to show what it is.
It's a business that's startingup.
Well, you can tell them all youwant about all the clients that
you're about to sign or thatyou have signed.
They don't see it.
Yeah, and you know.
So you're asking someone whomakes a salary for a living
(10:43):
making decisions on loans.
You're asking that person totake a chance on you.
Speaker 1 (10:48):
Yeah.
Speaker 2 (10:49):
It's, it's not realistic, yeah, Now, yeah, you
know, when you get into credituh, credit unions and smaller
banks and you have arelationship, there might be
some leeway.
But you know, at the end of theday, all financial institutions
are heavily regulated and theyhave to, they have to
demonstrate to the feds alltheir lending ability and all
(11:12):
their lending criteria and alltheir decisions.
Speaker 1 (11:15):
Especially after 2008 .
I mean, it was a mess.
And then the Sarbanes-Oxleystuff and everything else, and
it's just like everything's justso tight now everything else,
and it's just like everything'sjust so tight now.
Speaker 2 (11:25):
Everything is so tight they are.
They are so highly regulated.
It's you know, in effect,they've kind of created the
sofas of the world because thebanks are so locked down they
couldn't, they couldn't do that,but regulatory wise, they
couldn't even do that.
So there's this, there's thisentire generation coming up that
(11:45):
says I don't really want todeal with all these banks and
all their rules.
I've got some flexibility herewith with, with SoFi and you
know all that.
All that FinTech, it's real.
I think a lot of it's beencreated from over-regulation of
the banking industry.
Speaker 1 (12:00):
Literally before you walked in, I'm doing a, I'm
doing a proposal for a companythat's like on deck.
They're like an on deck or asquare capital.
And square capital isinteresting too, because a lot
of these businesses say youstart a coffee shop, or my wife
has a, she's got square capitalRight, so she has a spa Right.
Yeah Well, she has a POS system.
(12:22):
It's square.
They know how much money she'sgot.
They know they do, they knoweverything about her.
So they're sending her offersfor these small business loans
like, hey, wouldn't it be niceif you had an extra fifty
thousand dollars right now tobuy products?
And she's like, oh yeah, Icould do this Right.
But most of those loans aregoing to be short term, like I
think they're like two years orsomething, some of them and
(12:44):
expensive and expensive.
So they show you how expensiveit's going to be.
Oh, you want to borrow 50,000?
Well, tack on another 10 tothat.
That's right.
So I mean, it's tough, butyou're right, these, all these
financial products, are a littlemore risky and I think they get
a lot of their money from likeinvestors.
Yeah Right, they're tellingtheir investors oh, you're going
to make, I don't know, 10% onthis instead of sitting in the
(13:05):
bank at 5% in our treasury rightnow.
But there's a lot of thoseproducts that are popping up and
investors that are accreditedcan work with guys like OnDeck
and give them a chunk of changeand then they go out and they
find small business owners whothe banks won't cater to.
Speaker 2 (13:21):
Yeah, and you know, and here we are in early 2024,
with a lot of businesses stillstruggling because they forgot
that they had to pay back theirEIDL loans.
Oh yeah, you don't need anotherright now.
Speaker 1 (13:36):
No, you got enough.
Take care of what's in front ofyou.
Well, debt is crazy right now.
Personal debt is insane, notjust business debt.
I mean, there's people out herethat are living off.
They're paying for inflationwith inflated interest rates yes
, with their own inflatedinterest rates on their credit
cards 24 percent and until thereis a blip of about five days
(13:57):
and then the house of cardsfalls down yeah, and it's
getting to that point yeah,delinquencies are are rising and
people don't understand, like Idon't think people understand
macro issues that we're facingright now.
I mean the government's printing.
I think they printed a trilliondollars.
They're printing a trilliondollars every 90 days.
I think Right now, that's crazy, that's just it.
(14:17):
What was it?
Since I think 2020 or something, they've printed like 20
something trillion dollars.
Yeah, it's nuts.
Speaker 2 (14:24):
And the the amount required from current tax
receipts just to pay interest onthe federal debt.
It just keeps on going there.
There comes a time when it justit doesn't make any sense
anymore.
Speaker 1 (14:40):
No, and then a majority of the jobs that are
being added right now aregovernment.
Well, not a majority, but a bigchunk of government jobs, and I
think I saw one time, when itgets over 10 percent of new jobs
created or government jobs, thesign of a recession, you know,
(15:00):
but along those same lines.
Speaker 2 (15:03):
I think we've been dealing with this for probably a
decade or two is many of thenew jobs that are just being
created in the service industryare still pretty low paying Sure
, and so you know you Healthcareservices and regular services,
restaurants, things like that,yeah, yeah, I mean God, how many
restaurants shut down duringCOVID?
Speaker 1 (15:24):
Oh, yeah, restaurants things like that yeah, yeah, I
mean god, how many restaurantsshut down during covid?
Oh yeah, but the ones with anapp like a donato's or papa
john's or something, those aredoing great because they were
prepared for it, they hadtechnology, but mom and pop
pizza shop, that got shut down,yeah.
And now you've got probably anew wave of people that are like
dipping their toe back intoentrepreneurship, hiring people
again.
But if you do look at it I meanyou look back four or five
(15:45):
years if you cut the chart offat just the right point, it
looks like things are goinggreat, right, but if you look
back, you see that big cliff wefell off of for jobs, for GDP,
for all these things that arejust now starting to kind of get
back to where we were.
But we've got additional debt.
The country has additional debtand I think I don't know if
(16:09):
this is true, but I heard thatthe tax revenue the government
collects and I think you mighthave mentioned something like
this the interest we pay on ourdebt, is actually higher, or
it's a certain percentage of ourGDP, and it's dangerously high
right now?
Speaker 2 (16:25):
Yeah, it's dangerously high.
It's like old, old time SouthAmerica high, yeah, which is
really, this is like JimmyCarter days coming high.
Yeah, well then.
Yeah, then it gets into somereally deep macroeconomics that
I don't you know, I don't fullyfollow.
But you know, at the end of theday, if people lose faith in
(16:45):
the strength of the dollar,which is happening, it just got
downgraded.
That has yeah, that has a lotof really negative consequences
for people.
Speaker 1 (16:55):
Yeah.
So I mean and this only makesit more important guys to think
about what kind of businessyou're starting or what kind of
business you're in, becausepeople you see that there's jobs
being created and everything,but I personally see a lot of
people losing their jobs or alot of people in jobs that they
don't like.
Or a buddy of mine calls meyesterday.
(17:17):
He says I think my company istrying to get people to quit, so
instead of them laying peopleoff, they're doing things like
hey, remember how I told you youcould come in two days a week?
Well, now you got to come inevery day.
And my buddy lives in Indiana,like pretty far out in Indiana,
works at a job here in Covington.
So that means he would have todrive in, pay to park every day
(17:40):
in downtown Covington.
And he's like wait a minute,you said two days a week, I'm
sorry, not two days a week, I'msorry, not two days a week.
So I think you've got littlegames like that being played
right now too.
Oh, the pendulum is swingingback.
Speaker 2 (17:53):
You know I tend to just look at things like a
pendulum.
You know, during COVID thependulum swung so far in favor
of the employees that theemployers were just just beside
themselves just trying to run abusiness, couldn't find anybody.
Yeah, I'm not.
I'm not really happy with itall going all the way in favor
(18:13):
of the employers there has to bethere has to be something in
the middle.
And right now I think that'swhat we're seeing is the
employers.
They're just trying to clawback and get back to the middle
because they they still have abusiness to run and and I I
think in part, they're kind ofjust getting tired of popping up
their head and looking forsomeone and realizing that
(18:34):
they're not around.
Speaker 1 (18:35):
Yeah, and then also it's just like scary Some of the
employees nowadays they justseem so litigious, like it seems
like if you hire somebody,they're not going to want to
come in, they're going to mouthoff.
They're going to you knowthey're not going to want to
come in, they're going to mouthoff, they're going to you know
they're going to say oh, I'm theemployee, this is, I demand
this and this and this.
If you don't give it to them,then something could happen.
I mean you're it feels likeyou're, you're, you're walking
(18:58):
on eggshells with theseemployees nowadays.
Speaker 2 (19:00):
Yeah, I think if, if you're in your 20s and you have
any mechanical ability, oh myGod, or you just have an
interest in it, they are linedup to hire you.
And then you have to do acouple of things, you have to
want to learn and you have toshow up.
And you know, I've told peoplein their 20s it's like you know,
(19:24):
go be an HVAC tech and learnthe business.
That's right, and maybe 10years later then you can own
your own.
But this, this is the perfectopportunity to get in to learn a
trade, and that just becauseyou start out as an employee, it
doesn't mean you're an employeethe rest of your life.
You can, you can, you can headout easily.
Speaker 1 (19:45):
Yeah, I told.
I tell people all the time Isay you can't trade your time
for money, forever, right.
And people are like, well, howdo you expect people to do that?
I said, well, you've got to bean employee first.
You have to be an employeefirst.
You got to live below yourmeans, save as much money as you
can and then eventually, yeah,do something like that.
I mean, even even in the highschools, why aren't we teaching
the trades anymore?
(20:06):
What happened to the vocations?
Not every kid is set up to goto college.
Cincinnati public schools has a19 out of 100 college readiness
score.
That means 80 of the kids therearen't going to college.
Right, they're just not.
I mean, you got 22 that knowhow to do math at the level they
need.
Like 32 can read at the levelthey need to read.
That's why the vocations werethere.
(20:28):
We, we got rid of a lot of and Iwas actually.
I was having lunch today with aguy who works at an hvc.
He's a sales guy for an hvc,commercial hvc company.
He walked around my upstairs.
He's like, oh, you got thissystem and that, you got carrier
this and that.
And I'm like, oh man, this guyknows his stuff right.
How many of those guys arerunning around nowadays?
Yeah, you know, I mean, and Ineed them.
I mean I had a guy come outhere and uh, snake our drain in
(20:50):
our kitchen the other day and wehave our own snake but it just
wasn't reaching right so we hadto get a guy come out.
Three hundred dollars.
He was here 10 minutes, threehundred dollars.
So why aren't they teaching thisstuff in the schools?
You know, junior, senior year,you get a guy talked about this.
You get a guy who wants to sellhis business the next five
years.
He doesn't have a successionplan.
Oh yeah, cash positive business.
(21:12):
He's got plenty of clients.
He's got a brand, anestablished brand.
Probably owns an area of thecity that he does really well in
.
You know he wants to sell hisbusiness in five years.
Doesn't have anybody to buy it.
Goes to the schools, says, hey,do you got any kids who want to
learn HVAC?
Yeah, we do.
Junior, senior year.
They go, maybe leave schoolearly, go work with this guy
(21:33):
when they graduate theyapprentice, yes, and then they
work with maybe Hamilton Countyor Kenton County or whatever to
get the money they need to getan SBA 7A loan and they have to
have a down payment.
So most of these kids aren'tgoing to have a down payment.
So you work with the county.
The county fronts them some ofthat money.
But I've seen businesses.
They're making a million and aquarter a year.
(21:54):
This guy maybe has an employertoo, got all of his equipment
paid for already.
He's going to sell the businessfor a million bucks less than
what he's grossing every yearand he's putting $200,000 in his
pocket.
Even if you bought thatbusiness and had the loan to pay
, you're still probably netting$100,000 a year.
That other hundred grand mightbe going back into pay the loan,
(22:15):
but you're paying.
Your loan is paying off aprofitable business, not student
loans.
Speaker 2 (22:23):
Yeah, that's right, that's right.
But so here's what happens withthat seller more, more often
than not, is they have a priceand let's assume it's a
reasonable price, which is,which is kind of a big
assumption but they can sell toa competitor for a reduced price
because the competitors isgoing to, is going to beach into
(22:44):
the ground because they knowwhere to look.
Um, you're probably.
If you're a million, 2 million,you're too small for private
equity.
They're not, and and their,their number may or may not be
good unless you happen to fit,you know, some sort of perfect
scenario for them.
More often than not, you'regoing to have to sell for less
than you think it's worth sothat you can get cash, or you
(23:06):
have to sell and get some cashand give and give a note yeah,
that's right, it paid over time.
And then if you don'tunderstand your numbers, if you
don't really understand how youmake money, then the person
buying the business may not knowany better than you.
So a lot of those seller notes,they kind of collapse and I've
(23:30):
seen a number of times when theseller ends up getting back
inside the business because itwas about to fail.
Speaker 1 (23:37):
Oh yeah, my cousin was one of them.
She sold a business to a guy.
Not surprising he ended up.
It was a tech business and heended up not doing a whole lot
with it.
Bought it thinking he was gonna.
You know, it was a babysittingapp and it was like he just
thought you know, maybe thisbabysitting app was gonna work
right.
I don't know whatever happened.
You know I wasn't superinvolved in it at all.
Yeah, um, but then he gave herthe business back and then she
(24:00):
sold it again like a week laterto somebody else who was
interested in it originally, Ithink.
So it's crazy that you knowthere's there's stuff out there
like that.
But you know, these guysprobably want to go to Florida.
You know I've been plumbing forthe last 30, 40 years.
I've been, you know, doingelectrical work.
I'm going to go sit on a boat.
I'm going to take this millionbucks, I'm going to put it in
(24:22):
whatever else I got saved up andI'm just going to chill out and
go fishing and maybe go on atrip to Italy or whatever.
They don't plan on coming back.
They'd love for somebody youngto come in here, buy one of
these businesses, modernize it,maybe do some of the things that
you're talking about that thisguy didn't do, because he's been
running a business before.
Quickbooks was even a thing,everything is in a ledger.
(24:44):
Everything's on a paper ledger.
That phone just keeps ringing.
It just keeps ringing, right,and it kept bringing more and
more because less and lesspeople were interested in the
trades, right?
It's wild to me, but yeah, Imean, there's a lot of people
and I you know my point with allthis economic stuff that's
going on right now, it's moreimportant now to kind of control
your own livelihood.
(25:04):
I always thought, you know, andI worked for corporate for a
little while and I just I can't,I couldn't stand it.
I'm just not built for that,maybe just my personality type.
But I want to be in control ofmy own life.
I don't want and people thinkthere's security in working for
a company, right, I don't careif it's P&G or whatever.
You're a number.
This isn't grandpa, his pensionand he worked for the railroad
(25:26):
and you know he worked there for40 years and everything was
good.
It's not like that anymore.
You're relying on somebody else, another man or woman or
whatever.
You're relying on them to beable to deliver, for you to be
able to pay your kids school,for you to be able to pay your
mortgage, for you to be able topay your kid's school, for you
(25:46):
to be able to pay your mortgage,for you to be able to pay your
car bill.
Why would you rely on someoneelse when you can rely on
yourself If you have?
And I think the problem is, Ithink people don't have the
confidence.
They don't know how to build abusiness Like the stuff that you
know how to do, like,essentially, if they had you
(26:08):
they wouldn't be afraid as much.
And that's just in myexperience.
Speaker 2 (26:12):
Yeah they'd, they'd have a lot more clarity.
So you know first to that point, if you know, if you've got a
listener working for a biggercompany, the first thing that
you want to think about is howmany changes there are to the
S&P 500 every couple of years,and I can think of three big
companies.
I've worked I've spent most ofmy life in small business but
(26:34):
I've done some.
I've done some bigger companystuff and they're not around
anymore.
Speaker 1 (26:39):
That's right.
Speaker 2 (26:40):
They're just, they're just gone.
Speaker 1 (26:41):
That's right.
Speaker 2 (26:42):
And yeah, you can find.
You can find a similar positionat another company maybe, but
I'm not sure.
Speaker 1 (26:49):
You probably downgrade or you take a lateral
move.
Yeah, like I mean, you knowthere's probably guys that
thought Sears was a greatcompany Exactly, jcpenney.
You know Sears was a greatcompany for a while.
I mean they built a tower inChicago, right, and it's like
Sears, like, yeah, I want to gowork for Sears.
Ge, look what's going on, ge,they're breaking GE up right now
.
You know one of the greatestcompanies, the auto industry.
(27:11):
You know guys used to think, oh, just go work at the.
You know GM be there for 40years.
And now, look, you know, I mean, it's just, it's wild.
I mean you're right.
Speaker 2 (27:29):
Yeah, no to your point.
There is no better time to tryto control your destiny than
right now, and I think to dothat when we think about a side
hustle is, yeah, if you canstart it first as a side hustle
before you have to take theplunge, all the better.
You know, you know, one of thebooks that it's like an old
classic that everyone shouldread is the E-Myth.
Oh, yeah, and as I always bringthis up, because now it's been
(27:52):
I don't know 30 years or so, butwhenever you hear someone talk
about work on your business, notin your business, that's from
the E-Myth.
Speaker 1 (28:00):
Yeah.
Speaker 2 (28:01):
And is that?
Speaker 1 (28:02):
where that came from.
Is that where the saying camefrom?
Oh, interesting yeah.
Speaker 2 (28:05):
Yeah, yeah, no one can claim that as original.
Okay, it came from the e-myth,I didn't know that.
Speaker 1 (28:10):
That is exact.
That's like my wife's favoritesaying now.
Speaker 2 (28:15):
Yeah, no, go read the e-myth and Michael Gerber who
wrote it?
He was a consultant.
His point is this and this isthe lesson for for people
listening on the side hustle,you've got his example, I think
is a dog groomer.
So so, okay, you're number twoat the dog grooming place and
(28:35):
you and your perception is, theowner is making all kinds of
money where you're just slavingaway at minimum wage or
something like that, and youthink you know what I got a
better idea away at minimum wageor something like that, and you
think you know what I got abetter idea.
I'm going to go out and do myown and I'm going to charge a
little bit less than this guyand everyone's going to come to
me and I'm just going to makemoney hand over fist.
(28:57):
Gerber's point is, first of all, that it doesn't happen.
It's not that easy and in theend, all you've done is you've
traded.
You've traded a job that youkind of liked and you kind of
got along with the owner for ajob where now your boss is a
lunatic.
Speaker 1 (29:16):
And that's his point.
I love it.
Yeah, yeah, that's his point.
Well, and you don't have oneboss anymore.
Now you got however many bossesyou know, and it's really about
brand.
Right, your brand is what isvaluable.
I mean, look at apple, it'sapple's brand, right, they
charge a hundred times what itcosts to make those phones right
, but you're buying the brand.
(29:37):
Yeah, and your boss at the doggrooming place already has a
brand.
They already have anestablished brand.
They have relationships.
Everyone knew where to go.
Everybody knew where to go.
Everybody knew where to go.
They got the right location.
I mean, there's a bunch ofthings, a bunch of factors you
have to consider if you're goingto go out and do it.
Where are you going to belocated?
Yeah, yeah, maybe he did hisresearch.
(29:57):
She did her research, found out, oh, there's so many households
with dogs in this neighborhoodand they have so much disposable
income.
Well, here you go in aneighborhood that doesn't have
as many dogs.
Yeah, maybe the income isn't asmuch, but you can afford the
rent there.
Yeah, so he might have startedout.
She might have started out inone of those crappy
neighborhoods and eventuallyworked their way up to where
(30:17):
they could pay the rent in thisnicer neighborhood, right.
So I mean there's so much stuffyou got to think about.
But I mean right now I alwaystry to tell people, at least get
some kind of a little sidehustle going so that you have a
backup, like you have something,some multiple streams income.
You know the book multiplestreams income.
I read that years ago when Iwas probably 20, 21.
(30:39):
And I read that and I was likeI get it.
Like the strategies he talksabout is mostly real estate
stuff, right, get some rentalproperty, things like that.
But there's so many ways tomake money Now.
You could deliver medicalsupplies, you could drive Uber,
you could do DoorDash.
I mean you could do a bunch ofstuff sell stuff on eBay.
I could go right over here toDollar Tree, buy a bunch of
books for $1.25 that are sellingon Amazon for $20.
(31:02):
If I really wanted to, andpackage them all up and send
them out, if I was thatdesperate for money.
You know you could do all kindsof stuff like that.
There are so many ways to makemoney now doing side hustles
than it was when we were younger.
Speaker 2 (31:15):
I mean, it was nothing.
Speaker 1 (31:15):
You just went.
You went into the military.
You hope you play baseball,maybe like McDonald's.
Speaker 2 (31:20):
Yeah, or.
Speaker 1 (31:21):
McDonald's, like there was a handful of things
that you could do, right.
It was either, yeah, militaryor go to college.
Yeah, or maybe go into thetrades.
I mean, that was really whatthere was out there at the time.
Now it's just so many options.
Speaker 2 (31:34):
Oh, yeah, I think if you're thinking about a side
hustle or you have one, there'sone thing that not a lot of
people talk about, and that isthe value of networking yes, and
in-person networking.
And there's a couple of reasonsthat you want to do that,
particularly if you have a sidehustle is, first of all, you may
(31:55):
not be very good atarticulating your value, so you
got to show up and keep showingup and just keep trying to
figure out the right set ofwords that articulate your value
without boring someone to death.
Speaker 1 (32:08):
True, I mean I got to do that in politics.
Yeah, all the time I mean Idon't know what the hell I'm
talking about, like when I firststarted out, and then
eventually you realize you can'texplain in detail what we just
talked about.
Like you have to simplify thatmessage and be like hey, do you
like being poor?
Speaker 2 (32:23):
No vote for me, that's it message and be like
hey, do you like being poor?
Nope, vote for me.
That's it, that's right.
I get it.
Yeah, that's right.
You know?
the other thing that networkingto me, live networking does is
it can also validate your idea,so you may have a side hustle
and it may be a small sidehustle and now you're going out
and just meeting people in thecommunity who want to meet you
(32:44):
and you explain what you do andyou, you can just look at their
face yeah, yeah, I don't get it,I don't get it, I don't get it.
Well, that's homework for you,that's right.
Keep, keep working it, keepworking it, keep working it,
keep getting it better.
Then the other thing with withnetworking, that not, no, not
(33:05):
enough small businesses or evenside hustle owners do, is I.
I don't think they believeenough in you.
Never know.
I met you.
I met you because you neverknow.
Yeah, it was you know I didn'tknow you were coming to that and
, and you know we, just you knowI didn't know you were coming
to that.
No, and you know, we just wejust happened to start talking,
(33:26):
which was great.
But if you don't believe in,you never know.
Well, you, you can't sendenough emails to overcome that.
Emails are.
Speaker 1 (33:37):
I get rid of those.
I can smell an email from amile away, like I see the name
and I'm like that's fake andjust get rid of it.
I don't read most of thesemarketing emails that come out
and the LinkedIn things thepeople that friend you on
LinkedIn and immediately you geta message after that Like we
can help you with your whatever.
It's brutal.
Oh, it's so bad.
It's brutal.
Who does that?
It's like a strategy, likethat's their main strategy and
(34:00):
it's all.
It's like the guys that wouldtell you back in the day talk to
as many girls as you can.
One of them is going to say yes, you know, like that whole deal
.
You know, talk to them all.
One of them will say well,that's their, that's the email
theory, that's their strategy.
What is it?
Spray and pray, spray and pray,that's like the whole thing,
that's right.
But it's you know.
You never know.
(34:21):
You never know it could bepositive or negative.
Prepare for the.
You never know what's going tohappen.
I mean, how many people fiveyears ago thought that we'd be
in the situation we're now Rightand they have small businesses
or they're working for somebody.
Now they're in the streets,right and they're, you know,
delivering pizzas or somethingright now because their job that
they were making good money at,not that good anymore,
especially if you're in a citylike Cincinnati.
(34:43):
We're pretty stable here.
People want to help?
Speaker 2 (34:46):
Yeah, they do.
People want to help.
Give them a reason, articulateyour value and and and tell them
what you're looking for and if,if I can connect you to someone
, I will absolutely do that.
The other thing on a sidehustle, that that I would do, I
would work really hard on beforeI even went out on my own, and
(35:06):
that is just the idea of jointventures or affiliations.
I don't want to make it realformal because it's not, but you
look at who get, find acomplimentary business, who's
calling on the same customers,and why don't you two make a
deal and it can be a monetarydeal.
It doesn't have to be amonetary deal, but start, get,
(35:29):
get another ally so that youknow if, if, if you're calling
on, well, if, if you're callingon a marketing firm or you're
calling on another firm andthey're not ready for you,
they're not ready for reversedout because they just plead
poverty.
It's like Adam, we love whatyou do, we just don't have the
(35:52):
money, well, chances are that'sclient for me.
Yeah.
Speaker 1 (35:58):
And that's right.
Speaker 2 (35:59):
And the reverse.
That's actually a really goodpoint.
Reverse is equally true.
Speaker 1 (36:02):
Hey, they just told me they don't have any money.
I need to connect them with aguy who can help them get their
books straight and figure outtheir bottom line.
Like, what's going on here?
What are you doing wrong Tohire Adam?
Yeah, yeah.
Speaker 2 (36:13):
Why aren't you?
Speaker 1 (36:13):
growing.
If you can't grow withadvertising, then you might be
able to look at some of yourexpenses and things you're
spending money on right now.
Speaker 2 (36:21):
We need to dig in and we just need to get a little
bit smarter about pricing, andthere may be some bundling that
you can do some things to juststart to generate that, that
profit part of the you know partof the discussion.
If we were to sit down with acommon client, you and I would
quickly um, we wouldn't.
(36:41):
Um, we wouldn't be at at atodds or anything.
But I want business owners tothink more about profit than
revenue.
Speaker 1 (36:51):
Yeah.
Speaker 2 (36:52):
And people think well , if I don't have revenue, I
can't grow.
I'm not suggesting that Growthis awesome.
Growth is important Revenue.
When you talk about revenue,you're talking about growth.
When I talk about profit, I'mtalking about stability.
Yep, and if I don't have thatstability, I really can't invest
(37:13):
much more in growth.
Speaker 1 (37:15):
Yeah, people just like talking about growth.
They do it's sexy, they liketalking about it.
Oh, we doubled our revenue lastyear.
Speaker 2 (37:22):
It's mostly untrue.
Did you double your profit?
Oh, no, not at all Not couldn't, you couldn't.
Yeah, it's just not possibleMathematically, right, you
couldn't cause.
You probably have a 20% netprofit margin anyway, so you
could double.
So, yeah, your bottom lineprobably improved, but it
probably didn't improve by thesame ratio.
(37:42):
If you doubled your profits,your profits, your profits
didn't double.
Speaker 1 (37:47):
No, yeah, if you doubled your revenue?
Speaker 2 (37:49):
Yeah, you spent a lot more.
You spent a lot more to to getthat revenue.
Speaker 1 (37:54):
You probably spent a lot in advertising or you did
something, and isn't there likea percentage people need to do?
Like what is it?
It's like a third or something.
People ask me that a lot.
Speaker 2 (38:03):
Yeah, it's so industry dependent, but I, you
know, 10 to 20% feels a lotbetter to me than a third.
But you know, was it Ogilvy orsomeone said that?
Speaker 1 (38:16):
You know I think it was Ogilvy 50% of my advertising
is wasted.
I just don't know which 50%.
Speaker 2 (38:22):
Yeah, he's absolutely right.
But you know, the other thingthat I think someone with a side
hustle should recognize, eventhough they'll say they want to
have this problem is fast growthwill kill a business faster
than slow growth Any day.
Any day, it's proven.
Yeah, because with fast growthyou're outrunning your cash, oh,
(38:48):
and then you borrow, and nowyou're borrowing to feed growth,
and it takes one thing to gowrong.
It takes one big customer todelay payment or not pay.
Oh, that's a good point For asmall business that could just
cripple you.
It's, and all of a sudden it'sa small business.
I can just cripple you.
Speaker 1 (39:06):
It's a house of cards , that's just debilitating if
you're, if you have a bigcustomer, that's just not, or
you, I mean, we've got customersthat are net 90, net 90, well,
yeah, so I gotta carry that, Igotta pay my employees, I gotta
let them you know, and and Iwait on a check.
I mean it's great when you getit 90 days later, yeah, but it
sucks to have to wait like that.
And it's like these are bigcustomers, the bigger the
(39:27):
customer probably, the more, thelonger they wait to pay you the
fortune 1000.
Speaker 2 (39:31):
Yeah, when do you get paid?
When they, when they tell youthat they're going to pay you?
Speaker 1 (39:35):
Yeah, but imagine being a small business and
taking on one of these bigclients that are net 60, net 90,
you know not every opportunityis a good opportunity.
Speaker 2 (39:44):
That's right.
So if you're selling productand you're not getting paid for
60 or 90 days, think about allthe cash that's going out to
build the product, for the wagesand everything before you
actually get paid for it.
Speaker 1 (39:59):
Yeah.
Speaker 2 (40:00):
Because it's not like you're setting the margin on
that either.
No, so the big company istelling you basically the margin
they want to purchase at andwhen they're going to pay you.
Yep, I don't really like thoseodds, those suck.
Speaker 1 (40:14):
It's great for them.
It's great for them.
They're smart, they know whatthey're doing.
Great for them.
Speaker 2 (40:18):
They've been doing it for years.
Great for them all day long.
I had a big, a big company Idealt with once as a CFO.
They gave us a choice you canget paid within 15 days with
something like a 4% haircut, oryou can wait 90 days and get
paid in full.
Oh, wow, it's really tough mathbecause it's never a pure math
(40:43):
problem.
You've got all everything elsegoing on in your business to try
to figure out.
Well, can I really live withoutthat cash?
Even though I I don't want totake the 4% haircut, most people
will just take the haircutbecause they got to have the
cash for other reasons.
Speaker 1 (41:00):
That's right.
Speaker 2 (41:00):
Yeah, wow, because it and often because you're trying
to grow too fast, you're outrunning your cash.
That's wild.
Speaker 1 (41:07):
Well, Dan, tell us about your business, Tell us how
people can reach out to you and, uh, and, and and what
circumstances you would likethem to reach out to you.
Speaker 2 (41:15):
Yeah, so the the profit architectcom is my site.
I am a CPA.
I have done um a couple ofhundred planning sessions for
small businesses.
I've been a president and CEO anon-family member CEO of a
manufacturing company, so I'veseen just about every possible
(41:37):
side of small business ownership.
At this point oh yeah, I havemany chapters in my book so that
I'll get around to writing oneday.
But where I am now is much morefocused on small businesses and
helping them get moreprofitable quickly.
And the reason is I wish ithadn't taken me a couple of
(42:00):
decades to realize it, butthat's just where we are.
A couple of decades to realizeit, but that's just.
That's just where we are.
You, reversed out, could come toa small business and all of
your ideas are great and they'regoing to be successful.
What's really in the mind ofthe small business owner is not
only do I not sure I have enoughmoney right now for it, I don't
(42:24):
know where it's going to be insix months.
So it's all that lack ofcertainty.
That's what holds people backfrom making decisions that could
be really good for theirbusiness.
Yeah, and so you know.
After, after going through youknow, all day planning sessions
with businesses and crafting allthese great ideas and see most
(42:45):
of them not really implemented.
I just finally realized if Ican just sit down with them and
get some quick wins and clean upwhat's going on inside their
business because I'm not themarketing strategist that's for
you.
I'm totally on the inside andhelping with pricing and
managing expenses.
If all of a sudden that bottomline grows by 10% or 20%, that
(43:11):
business owner literally feelsbetter about everything and is
willing to start making theright investments to grow the
business.
Yeah, because it's stressful,it's very stressful, yeah, it's
very stressful, yeah, it's verystressful.
So until we get there, it's uh.
You know, it's really hard toget their attention for for
someone like you, becausebecause intellectually they know
(43:36):
it's a good idea, but they have, but they're so uncertain of
the next six months that theydon't want to commit additional
expense to it.
Speaker 1 (43:47):
Yeah, they're like well, what if it doesn't come in
?
What if the you know it doesn't, this marketing that we're
doing doesn't bring us any moreclients?
Then we're in bad shape becausenow we're spending money on
this and we don't.
Yeah, I mean it's.
I can see that.
Yeah.
Speaker 2 (43:59):
So you know, I I talked before about networking
and you got to articulate yourvalue.
Well, I I talked before aboutnetworking and you got to
articulate your value.
Well, I'll put a littledifferent spin.
What problem do I solve?
The problem I solve isinconsistent profitability.
That's all I do.
Inconsistent profitabilityBecause if we can get to
consistent profitability, much,much better decisions are being
(44:21):
made.
So I do that.
I've got proprietary softwareor I can pick apart a company.
But really, more importantly, Ido it through workshops and
these are being made.
So I do that.
I've got proprietary softwarewhere I can pick apart a company
.
But really, more importantly, Ido it through workshops, and
these are educational workshops.
Right now they're local.
I'll have one virtual soon andwe'll we'll get that in the show
notes or something like that.
I'll get the link and it is soeducational.
(44:42):
I tell people leave your walletat home because there's nothing
to buy.
Speaker 1 (44:47):
Oh, wow.
Speaker 2 (44:48):
And I will take you through several different ideas
and I more or less guaranteethat anyone who participates is
going to walk away with a coupleof ideas and, more importantly,
a different way to think abouttheir business, interesting what
those numbers are reallytelling them.
Yeah, and then if you know downthe road, if you really like it
(45:10):
, if we start to work together,that's great.
But I do that with a guaranteedROI, because now I know your
business so well and I'vemodeled it out.
You're ready.
You're prepared Because you'retelling me what you want to do
and I'm just helping you getthere, wow.
So, it's a lot of fun.
Speaker 1 (45:26):
It's good to have a guy like you here.
I mean, for the smallbusinesses around town.
I mean, no, that's so important.
Yeah, I mean, if you're andthis is, it's funny, because
governments are interested ineconomic development, right,
local governments are, oh,economic development, let's
bring in more businesses, butthat's kind of where it ends.
Oh, yeah, it's not.
Hey we've got okay, great thatyou're here, great that we have
(45:47):
more small businesses startingup.
But go talk to Dan Hackett like, get this going and and and and
.
Figure this stuff out, becauseit's going to make them stick
around.
And what is it like?
A 10 times more to find a newclient for me, right?
It costs me 10 times more tofind a new client than just get
money from existing clients.
Well, it's the same thing witheconomic development Like it's
(46:08):
going to cost you 10 times more.
It's going to take 10 timesmore effort to bring in a
business to say, covington, thanit is to make sure that an
already existing business issuccessful.
Speaker 2 (46:20):
I would rather have five Covington businesses and
five people over the next yearthan than work ourselves to
death to to bring in one thatbrings in 50 jobs, because what
we also see a lot in theheadlines is we don't even know
how long those 50 jobs stickaround.
(46:40):
That's right, but if if I'mgrowing my business from 10 to
15, I'm a keeper, I'm going tobe around.
Those are, those are rock solidjobs.
Speaker 1 (46:49):
When you get to that point.
Speaker 2 (46:50):
And that's right, and that then you're right.
That's what drives the economy.
Speaker 1 (46:54):
Yeah Well, I really appreciate you coming on the
show today and good luck witheverything and good luck helping
people get their businesses ingood shape.
Yeah Great, I appreciate it,adam.
A lot of fun, all right, thankyou.
Is in good shape.
Yeah, great, I appreciate it,adam.
A lot of fun, all right, thankyou.
Thanks for joining us on thisweek's episode of Side Hustle
City.
Well, you've heard from ourguests.
Now let's hear from you.
Join our community on Facebook,side Hustle City.
(47:14):
It's a group where people shareideas, share their
inspirational stories andmotivate each other to be
successful and turn their sidehustle into their main hustle.
We'll see you there and we'llsee you next week on the show,
thank you.
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