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.
Subscribe to Side Hustle City and join our Community on Facebook
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.
Subscribe to Side Hustle City and join our Community on Facebook
Welcome to Side Hustle City and thanks for joining us. Our goal is to help you connect to real people who found success turning their side hustle into a main hustle, and we hope you can too. I'm Adam Koehler. I'm joined by Kyle Stevie, my cohost, let's get started. Allright, welcome back everybody to the Side Hustle City podcast today. Special guest the profit architect, Dan Hackett. How are you doing, Dan? Doing great Adam, thanks, yeah. So Dan and I were at the same event the other day for Covington Business Council and I got to talking to him and I thought, man, these are like the perfect services for side hustlers or for anybody with a business. Actually, I mean, it's making people who may not actually be business people which I know a bunch of them and teaching them how to run their businesses more effectively. I would say.
Speaker 2:It's really about helping people understand their numbers, because you know you get a lot of business owners from a sales or marketing background, so they understand what to do to drive that top line. And then they start to think about well, what's my real cost of providing that service or what's going on with overhead? And the next thing you know they're working three times as hard as they were, the revenue's coming in but there's nothing on the bottom line and they can't quite figure it out because they don't have the background for it.
Speaker 1:Well, you feel like you're working, you're working, you're working and you're making less money than you did when you were at some company and some people just it bums them out and then they just want to go right back to working a job, and I think that's one of the main problems with folks and I talked to you a little bit about it when we were chatting but I feel like there's a lot of graphic designers, which is a great field, graphic design dev developers, people like that. That's a skill that you can either get a job with, you could start freelance and then eventually go out on your own or marketing skills any of those kind of things that allow you to freelance and then eventually start your own company. I had a bunch of people like that that I used to work with at these agencies and they would start these businesses and they would start charging as much as their agency used to charge Right Three hundred three hundred fifty dollars an hour yeah, charging as much as their agency 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 here and people are going to pay the same amount that they did when I worked at this big 300 person agency. And I'm just going to work eight hours a day just designing websites, logos, coding, for eight straight hours.
Speaker 1:What they don't realize is no, you're going to be in QuickBooks half the day. You're going to be chasing clients down for money. You're going to be building proposals that you can't charge for just to win some work. You may be doing RFPs God forbid. I hate RFPs. It's like you don't know how many people are bidding against you. Somebody's undercutting everybody. But you spend more of your time during the day managing your business, managing the books, and most of these people aren't accountants, dan.
Speaker 2:No, they're definitely not accountants, and you know. Back to that point about revenue, you know the first. I guess the first mistake people make is to think any revenue is good revenue and so you're going out on your own. Maybe you got a couple of people to pay your price. But in reality you threw out a price and then they knocked you down a little bit and you said, yes, because you have capacity. All right, that doesn't make for a bad deal. But what you didn't really think about is all the demands this person is going to put on you. And the next thing you know, if you really take all your effort and you divide it by the hours, you know you're probably making $25 an hour.
Speaker 1:Yeah, In reality.
Speaker 2:Yeah, no, that's what's happening in reality.
Speaker 1:People don't think about that and they don't want to think about that. No, they don't. They want to just pretend they're making $60 an hour or whatever it is that they think they're charging for. But really, when you add everything up all the unbillable hours that you have and even hours that you're like I can't really charge them for that. Emails I just tell people every email you send out is 15 minutes. You got to read this other person's email Easy. You got to comprehend what in the world they're saying and you've got to formulate a response. Yeah, and some people love the email. Some clients are just email, email, email, right, and you don't really factor that into what you're billing these people.
Speaker 2:No, the challenge is you know you're trying to build a business, whether it's a side hustle or you just rolled out the side hustle and it's your full-time job. The problem is you're not really willing to hold the line on your value. What you're, what you really want, is just more revenue and you're just going to work and work and work, and so the clients. It doesn't make those clients evil because you have promised them the world. So when they turn around and ask you for the world, that's on you that you're now making 15 bucks an hour, it's not on them. That was the agreement.
Speaker 2:So the really hard part about going out on your own is it's not about articulating your value. You've got to understand your value. Yeah, understand your value, yeah. And if you think you're just another graphic designer and you're competing with the person three doors down, well then it's a race to the bottom. Same with marketing. You know if you're in, you know let's just take, take an SEO expert. You know you can throw a rock and hit 10 of them. Well, if you think you're just another one of them because you can't articulate why you're different, well then you're probably going to end up making less than your salary of the job that you just left.
Speaker 1: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 bigger agency. Now, what are some of the mistakes that you see people make when they formulate a business Like I get a business together. What are some of the things that you think people or whether you know people should be doing upfront that they're just not doing?
Speaker 2: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. So if you already have a little bit of revenue, well, you can't just assume that more of it's coming in Now. You have to allocate time to go find that revenue. So where is that time going to come from? Yeah, and then you get to your expenses. And this is where it gets really personal, right, because you're going out on your own. So now you have to divide your fixed versus your variable expenses. So your fixed is you got to eat.
Speaker 1:Yeah.
Speaker 2:You got rent mortgage, whatever it is, and then there's a whole lot of things you're spending money on that you don't really have to spend money on. Are you? Yeah, but but are you, are you willing to make those cuts? You know you know any. Anyone in financial planning or accounting or just finance generally will tell you that they'll. They'll take a new businesses forecast and the rule of thumb is you cut revenues in half and you double expenses and then you hand it back to them and you say, okay, can you live on this?
Speaker 2:Yeah, because if you can't, I'm not, I'm not, it's not up to me to decide what you need to do, but you just really need to take a pretty hard, look in the mirror and decide, because it's you know it, it's not all unicorns and sunshine.
Speaker 1: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 hang because you got crazy things that come up when you've got kids. You don't know what's going on. You know, and you want to send them to good schools and all this, and that you know I had to do without. I mean, I started a rental property business. I had other things going on. Uh, my tenants were living nicer than me. Yeah, and I would, just I would. I'd buy a property, I'd go there, I'd throw a sleeping bag down and sleep on the plywood after I just ripped up the carpets. You know, I mean it was things like that that you'd be doing, that you don't even realize. And you know, you, as a business owner, this is your baby. Like, this company is going to be your baby. And I think a lot of people they just they think that it's going to be this great thing. It's going to. I'm going to go on my own. I'm going to be this great thing. I'm going to go on my own, I'm going to make all this money.
Speaker 1:You really like you've got to live well below your means because you never know when cash flow is going to become a problem. You're not buying the $800,000 house out in the burbs. Actually, you probably won't even be able to get a loan for it, because your income is so random Like you don't have money, like you don't have a consistent amount of income. You don't have a W-2 anymore. Banks hate you and your job as a business owner is probably not to pay as much taxes as you should. So you're like man, where can I find write-offs? And then the banks look at you like you're a pauper Right.
Speaker 2:You go out on your own and, within a year, decide that you want to apply for a new mortgage. I mean, they're, they're they just run from you because the only, in effect, the only document that they'll really accept or get comfortable with is the tax return. You can create your own financials all day long. You can even hand them bank statements all day long. They want to see the tax return. So if you're still in your first year or you finished your first year and you, so if you're still in your first year or you finished your first year and you're still kind of ramping up, it's not going to look that great and they're not going to lend you the money.
Speaker 1:That's one of the most frustrating things about being an entrepreneur is you just cannot borrow money for stuff that regular people with regular jobs you're like these guys are making as a household. Maybe they're bringing in a hundred grand, they're living in a 500, 600,000. I'm like how in the heck did they get a loan? And I can't get a loan, you know, and it's the tax return. They look at it and they say, well, we can pull all this depreciation out. You can try some of that, but a lot of times that doesn't even work. It's crazy.
Speaker 2:No, no, it doesn't work. And that first year tax return it's just going to, it's going to show what it is. It's a business that's starting up. Well, you can tell them all you want about all the clients that you're about to sign or that you have signed. They don't see it. Yeah, and you know. So you're asking someone who makes a salary for a living making decisions on loans. You're asking that person to take a chance on you.
Speaker 1:Yeah.
Speaker 2:It's, it's not realistic, yeah, Now, yeah, you know, when you get into credit uh, credit unions and smaller banks and you have a relationship, there might be some leeway. But you know, at the end of the day, all financial institutions are heavily regulated and they have to, they have to demonstrate to the feds all their lending ability and all their lending criteria and all their decisions.
Speaker 1:Especially after 2008. I mean, it was a mess. And then the Sarbanes-Oxley stuff and everything else, and it's just like everything's just so tight now everything else, and it's just like everything's just so tight now.
Speaker 2: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 the banks 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 this entire generation coming up that says I don't really want to deal with all these banks and all their rules. I've got some flexibility here with with, with SoFi and you know all that. All that FinTech, it's real. I think a lot of it's been created from over-regulation of the banking industry.
Speaker 1:Literally before you walked in, I'm doing a, I'm doing a proposal for a company that's like on deck. They're like an on deck or a square capital. And square capital is interesting too, because a lot of these businesses say you start a coffee shop, or my wife has a, she's got square capital Right, so she has a spa Right. Yeah Well, she has a POS system. It's square. They know how much money she's got. They know they do, they know everything about her. So they're sending her offers for these small business loans like, hey, wouldn't it be nice if you had an extra fifty thousand dollars right now to buy products? And she's like, oh yeah, I could do this Right.
Speaker 1:But most of those loans are going to be short term, like I think they're like two years or something, some of them and expensive and expensive. So they show you how expensive it's going to be. Oh, you want to borrow 50,000? Well, tack on another 10 to that. That's right. So I mean, it's tough, but you're right, these, all these financial products, are a little more risky and I think they get a lot of their money from like investors. Yeah Right, they're telling their investors oh, you're going to make, I don't know, 10% on this instead of sitting in the bank at 5% in our treasury right now. But there's a lot of those products that are popping up and investors that are accredited can work with guys like OnDeck and give them a chunk of change and then they go out and they find small business owners who the banks won't cater to.
Speaker 2:Yeah, and you know, and here we are in early 2024, with a lot of businesses still struggling because they forgot that they had to pay back their EIDL loans. Oh yeah, you don't need another right now.
Speaker 1:No, you got enough. Take care of what's in front of you. Well, debt is crazy right now. Personal debt is insane, not just business debt. I mean, there's people out here that are living off. They're paying for inflation with inflated interest rates yes, with their own inflated interest rates on their credit cards 24 percent and until there is a blip of about five days and then the house of cards falls down yeah, and it's getting to that point yeah, delinquencies are are rising and people don't understand, like I don't think people understand macro issues that we're facing right now.
Speaker 1:I mean the government's printing. I think they printed a trillion dollars. They're printing a trillion dollars every 90 days. I think Right now, that's crazy, that's just it. What was it? Since I think 2020 or something, they've printed like 20 something trillion dollars. Yeah, it's nuts.
Speaker 2:And the the amount required from current tax receipts just to pay interest on the federal debt. It just keeps on going there. There comes a time when it just it doesn't make any sense anymore.
Speaker 1:No, and then a majority of the jobs that are being added right now are government. Well, not a majority, but a big chunk of government jobs, and I think I saw one time, when it gets over 10 percent of new jobs created or government jobs, the sign of a recession, you know, but along those same lines.
Speaker 2:I think we've been dealing with this for probably a decade or two is many of the new jobs that are just being created in the service industry are still pretty low paying Sure, and so you know you Healthcare services and regular services, restaurants, things like that, yeah, yeah, I mean God, how many restaurants shut down during COVID?
Speaker 1:Oh, yeah, restaurants things like that yeah, yeah, I mean god, how many restaurants shut down during covid?
Speaker 1:Oh yeah, but the ones with an app like a donato's or papa john's or something, those are doing great because they were prepared for it, they had technology, but mom and pop pizza shop, that got shut down, yeah. And now you've got probably a new wave of people that are like dipping their toe back into entrepreneurship, hiring people again. But if you do look at it I mean you look back four or five years if you cut the chart off at just the right point, it looks like things are going great, right, but if you look back, you see that big cliff we fell off of for jobs, for GDP, for all these things that are just now starting to kind of get back to where we were. But we've got additional debt. The country has additional debt and I think I don't know if this is true, but I heard that the tax revenue the government collects and I think you might have mentioned something like this the interest we pay on our debt, is actually higher, or it's a certain percentage of our GDP, and it's dangerously high right now?
Speaker 2:Yeah, it's dangerously high. It's like old, old time South America high, yeah, which is really, this is like Jimmy Carter days coming high. Yeah, well then. Yeah, then it gets into some really deep macroeconomics that I don't you know, I don't fully follow. But you know, at the end of the day, if people lose faith in the strength of the dollar, which is happening, it just got downgraded. That has yeah, that has a lot of really negative consequences for people.
Speaker 1:Yeah. So I mean and this only makes it more important guys to think about what kind of business you're starting or what kind of business you're in, because people you see that there's jobs being created and everything, but I personally see a lot of people losing their jobs or a lot of people in jobs that they don't like.
Speaker 1:Or a buddy of mine calls me yesterday. He says I think my company is trying to get people to quit, so instead of them laying people off, they're doing things like hey, remember how I told you you could come in two days a week? Well, now you got to come in every 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 to drive in, pay to park every day 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'm sorry, not two days a week. So I think you've got little games like that being played right now too. Oh, the pendulum is swinging back.
Speaker 2:You know I tend to just look at things like a pendulum. You know, during COVID the pendulum swung so far in favor of the employees that the employers were just just beside themselves just trying to run a business, couldn't find anybody. Yeah, I'm not. I'm not really happy with it all going all the way in favor of the employers there has to be there has to be something in the middle.
Speaker 2:And right now I think that's what we're seeing is the employers. They're just trying to claw back and get back to the middle because they they still have a business to run and and I I think in part, they're kind of just getting tired of popping up their head and looking for someone and realizing that they're not around.
Speaker 1:Yeah, and then also it's just like scary Some of the employees nowadays they just seem so litigious, like it seems like if you hire somebody, they're not going to want to come in, they're going to mouth off. They're going to you know they're not going to want to come in, they're going to mouth off, they're going to you know they're going to say oh, I'm the employee, 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 like you're, you're, you're walking on eggshells with these employees nowadays.
Speaker 2:Yeah, I think if, if you're in your 20s and you have any mechanical ability, oh my God, or you just have an interest in it, they are lined up to hire you. And then you have to do a couple of things, you have to want to learn and you have to show up. And you know, I've told people in their 20s it's like you know, go be an HVAC tech and learn the business. That's right, and maybe 10 years later then you can own your own. But this, this is the perfect opportunity to get in to learn a trade, and that just because you start out as an employee, it doesn't mean you're an employee the rest of your life. You can, you can, you can head out easily.
Speaker 1:Yeah, I told. I tell people all the time I say you can't trade your time for money, forever, right. And people are like, well, how do you expect people to do that? I said, well, you've got to be an employee first. You have to be an employee first. You got to live below your means, save as much money as you can and then eventually, yeah, do something like that.
Speaker 1:I mean, even even in the high schools, why aren't we teaching the trades anymore? What happened to the vocations? Not every kid is set up to go to college. Cincinnati public schools has a 19 out of 100 college readiness score. That means 80 of the kids there aren't going to college. Right, they're just not. I mean, you got 22 that know how to do math at the level they need. Like 32 can read at the level they need to read. That's why the vocations were there.
Speaker 1:We, we got rid of a lot of and I was actually. I was having lunch today with a guy 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 this system and that, you got carrier this and that. And I'm like, oh man, this guy knows his stuff right. How many of those guys are running around nowadays? Yeah, you know, I mean, and I need them. I mean I had a guy come out here and uh, snake our drain in our kitchen the other day and we have our own snake but it just wasn't reaching right so we had to get a guy come out. Three hundred dollars. He was here 10 minutes, three hundred dollars.
Speaker 1:So why aren't they teaching this stuff in the schools? You know, junior, senior year, you get a guy talked about this. You get a guy who wants to sell his business the next five years. He doesn't have a succession plan. Oh yeah, cash positive business. He's got plenty of clients. He's got a brand, an established brand. Probably owns an area of the city that he does really well in. You know he wants to sell his business in five years. Doesn't have anybody to buy it.
Speaker 1: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 school early, go work with this guy when they graduate they apprentice, yes, and then they work with maybe Hamilton County or Kenton County or whatever to get the money they need to get an SBA 7A loan and they have to have a down payment. So most of these kids aren't going to have a down payment. So you work with the county. The county fronts them some of that money. But I've seen businesses. They're making a million and a quarter a year. This guy maybe has an employer too, got all of his equipment paid for already. He's going to sell the business for a million bucks less than what he's grossing every year and he's putting $200,000 in his pocket. Even if you bought that business and had the loan to pay, you're still probably netting $100,000 a year. That other hundred grand might be going back into pay the loan, but you're paying. Your loan is paying off a profitable business, not student loans.
Speaker 2:Yeah, that's right, that's right.
Speaker 2:But so here's what happens with that seller more, more often than not, is they have a price and let's assume it's a reasonable price, which is, which is kind of a big assumption but they can sell to a competitor for a reduced price because the competitors is going to, is going to beach into the ground because they know where to look.
Speaker 2: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're going to have to sell for less than you think it's worth so that you can get cash, or you have to sell and get some cash and give and give a note yeah, that's right, it paid over time. And then if you don't understand your numbers, if you don't really understand how you make money, then the person buying the business may not know any better than you. So a lot of those seller notes, they kind of collapse and I've seen a number of times when the seller ends up getting back inside the business because it was about to fail.
Speaker 1: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 he ended up not doing a whole lot with it. Bought it thinking he was gonna. You know, it was a babysitting app and it was like he just thought you know, maybe this babysitting app was gonna work right. I don't know whatever happened. You know I wasn't super involved in it at all. Yeah, um, but then he gave her the business back and then she sold it again like a week later to somebody else who was interested in it originally, I think.
Speaker 1:So it's crazy that you know there's there's stuff out there like that. But you know, these guys probably want to go to Florida. You know I've been plumbing for the last 30, 40 years. I've been, you know, doing electrical work. I'm going to go sit on a boat. I'm going to take this million bucks, I'm going to put it in whatever else I got saved up and I'm just going to chill out and go fishing and maybe go on a trip to Italy or whatever. They don't plan on coming back. They'd love for somebody young to come in here, buy one of these businesses, modernize it, maybe do some of the things that you're talking about that this guy didn't do, because he's been running a business before. Quickbooks was even a thing, everything is in a ledger.
Speaker 1: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 less people were interested in the trades, right? It's wild to me, but yeah, I mean, there's a lot of people and I you know my point with all this economic stuff that's going on right now, it's more important now to kind of control your own livelihood.
Speaker 1:I always thought, you know, and I 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 of my own life. I don't want and people think there's security in working for a company, right, I don't care if it's P&G or whatever. You're a number.
Speaker 1:This isn't grandpa, his pension and he worked for the railroad and you know he worked there for 40 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 be able 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 to pay your kid's school, for you to be able to pay your mortgage, for you to be able to pay your car bill. Why would you rely on someone else when you can rely on yourself If you have? And I think the problem is, I think people don't have the confidence. They don't know how to build a business Like the stuff that you know how to do, like, essentially, if they had you they wouldn't be afraid as much. And that's just in my experience.
Speaker 2: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 bigger company, the first thing that you want to think about is how many 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 of my life in small business but I've done some. I've done some bigger company stuff and they're not around anymore.
Speaker 1:That's right.
Speaker 2:They're just, they're just gone.
Speaker 1:That's right.
Speaker 2:And yeah, you can find. You can find a similar position at another company maybe, but I'm not sure.
Speaker 1:You probably downgrade or you take a lateral move. Yeah, like I mean, you know there's probably guys that thought Sears was a great company Exactly, jcpenney. You know Sears was a great company for a while. I mean they built a tower in Chicago, right, and it's like Sears, like, yeah, I want to go work for Sears. Ge, look what's going on, ge, they're breaking GE up right now. You know one of the greatest companies, the auto industry. You know guys used to think, oh, just go work at the. You know GM be there for 40 years. And now, look, you know, I mean, it's just, it's wild. I mean you're right.
Speaker 2:Yeah, no to your point. There is no better time to try to control your destiny than right now, and I think to do that when we think about a side hustle is, yeah, if you can start it first as a side hustle before you have to take the plunge, all the better. You know, you know, one of the books that it's like an old classic that everyone should read is the E-Myth. Oh, yeah, and as I always bring this up, because now it's been I don't know 30 years or so, but whenever you hear someone talk about work on your business, not in your business, that's from the E-Myth.
Speaker 1:Yeah.
Speaker 2:And is that?
Speaker 1:where that came from. Is that where the saying came from? Oh, interesting yeah.
Speaker 2:Yeah, yeah, no one can claim that as original. Okay, it came from the e-myth, I didn't know that.
Speaker 1:That is exact. That's like my wife's favorite saying now.
Speaker 2:Yeah, no, go read the e-myth and Michael Gerber who wrote it?
Speaker 2:He was a consultant. His point is this and this is the 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 two at the dog grooming place and you and your perception is, the owner is making all kinds of money where you're just slaving away at minimum wage or something like that, and you think you know what I got a better idea away at minimum wage or something like that, and you think you know what I got a better idea. I'm going to go out and do my own and I'm going to charge a little bit less than this guy and everyone's going to come to me and I'm just going to make money hand over fist. Gerber's point is, first of all, that it doesn't happen. It's not that easy and in the end, all you've done is you've traded. You've traded a job that you kind of liked and you kind of got along with the owner for a job where now your boss is a lunatic.
Speaker 1:And that's his point. I love it. Yeah, yeah, that's his point. Well, and you don't have one boss anymore. Now you got however many bosses you know, and it's really about brand. Right, your brand is what is valuable. I mean, look at apple, it's apple's brand, right, they charge a hundred times what it costs to make those phones right, but you're buying the brand. Yeah, and your boss at the dog grooming place already has a brand. They already have an established brand. They have relationships.
Speaker 1:Everyone knew where to go. Everybody knew where to go. Everybody knew where to go. They got the right location.
Speaker 1:I mean, there's a bunch of things, a bunch of factors you have to consider if you're going to go out and do it. Where are you going to be located? Yeah, yeah, maybe he did his research. She did her research, found out, oh, there's so many households with dogs in this neighborhood and they have so much disposable income. Well, here you go in a neighborhood that doesn't have as many dogs. Yeah, maybe the income isn't as much, but you can afford the rent there. Yeah, so he might have started out. She might have started out in one of those crappy neighborhoods and eventually worked their way up to where they could pay the rent in this nicer neighborhood, right. So I mean there's so much stuff you got to think about.
Speaker 1:But I mean right now I always try to tell people, at least get some kind of a little side hustle going so that you have a backup, like you have something, some multiple streams income. You know the book multiple streams income. I read that years ago when I was probably 20, 21. And I read that and I was like I get it. Like the strategies he talks about is mostly real estate stuff, right, get some rental property, things like that. But there's so many ways to make money Now. You could deliver medical supplies, you could drive Uber, you could do DoorDash. I mean you could do a bunch of stuff sell stuff on eBay. I could go right over here to Dollar Tree, buy a bunch of books for $1.25 that are selling on Amazon for $20. If I really wanted to, and package them all up and send them out, if I was that desperate for money. You know you could do all kinds of stuff like that. There are so many ways to make money now doing side hustles than it was when we were younger.
Speaker 2:I mean, it was nothing.
Speaker 1:You just went. You went into the military. You hope you play baseball, maybe like McDonald's.
Speaker 2:Yeah, or.
Speaker 1:McDonald's, like there was a handful of things that you could do, right. It was either, yeah, military or go to college. Yeah, or maybe go into the trades. I mean, that was really what there was out there at the time. Now it's just so many options.
Speaker 2:Oh, yeah, I think if you're thinking about a side hustle or you have one, there's one thing that not a lot of people talk about, and that is the value of networking yes, and in-person networking. And there's a couple of reasons that you want to do that, particularly if you have a side hustle is, first of all, you may not be very good at articulating your value, so you got to show up and keep showing up and just keep trying to figure out the right set of words that articulate your value without boring someone to death.
Speaker 1:True, I mean I got to do that in politics. Yeah, all the time I mean I don't know what the hell I'm talking about, like when I first started out, and then eventually you realize you can't explain in detail what we just talked about. Like you have to simplify that message and be like hey, do you like being poor?
Speaker 2: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?
Speaker 2:the other thing that networking to me, live networking does is it can also validate your idea, so you may have a side hustle and it may be a small side hustle and now you're going out and just meeting people in the community who want to meet you and you explain what you do and you, 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, keep working it, keep working it, keep getting it better. Then the other thing with with networking, that not, no, not enough small businesses or even side hustle owners do, is I. I don't think they believe enough in you. Never know. I met you. I met you because you never know.
Speaker 2:Yeah, it was you know I didn't know you were coming to that and, and you know we, just you know I didn't know you were coming to that. No, and you know, we just we just happened to start talking, which was great. But if you don't believe in, you never know. Well, you, you can't send enough emails to overcome that. Emails are.
Speaker 1:I get rid of those. I can smell an email from a mile away, like I see the name and I'm like that's fake and just get rid of it. I don't read most of these marketing emails that come out and the LinkedIn things the people that friend you on LinkedIn and immediately you get a 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, like that's their main strategy and it's all. It's like the guys that would tell 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.
Speaker 1: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.
Speaker 1:But it's you know. You never know. You never know it could be positive or negative. Prepare for the. You never know what's going to happen. I mean, how many people five years ago thought that we'd be in the situation we're now Right and 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 something right now because their job that they were making good money at, not that good anymore, especially if you're in a city like Cincinnati. We're pretty stable here. People want to help?
Speaker 2:Yeah, they do. People want to help. Give them a reason, articulate your 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 side hustle, that that I would do, I would work really hard on before I even went out on my own, and that is just the idea of joint ventures or affiliations. I don't want to make it real formal because it's not, but you look at who get, find a complimentary business, who's calling on the same customers, and why don't you two make a deal and it can be a monetary deal. It doesn't have to be a monetary deal, but start, get, get another ally so that you know if, if, if you're calling on, well, if, if you're calling on a marketing firm or you're calling on another firm and they're not ready for you, they're not ready for reversed out because they just plead poverty. It's like Adam, we love what you do, we just don't have the money, well, chances are that's client for me. Yeah.
Speaker 1:And that's right.
Speaker 2:And the reverse. That's actually a really good point. Reverse is equally true.
Speaker 1:Hey, they just told me they don't have any money. I need to connect them with a guy who can help them get their books straight and figure out their bottom line. Like, what's going on here? What are you doing wrong To hire Adam? Yeah, yeah.
Speaker 2:Why aren't you?
Speaker 1:growing. If you can't grow with advertising, then you might be able to look at some of your expenses and things you're spending money on right now.
Speaker 2:We need to dig in and we just need to get a little bit smarter about pricing, and there may be some bundling that you can do some things to just start to generate that, that profit part of the you know part of the discussion. If we were to sit down with a common client, you and I would quickly um, we wouldn't. Um, we wouldn't be at at at odds or anything. But I want business owners to think more about profit than revenue.
Speaker 1:Yeah.
Speaker 2:And people think well, if I don't have revenue, I can't grow. I'm not suggesting that Growth is awesome. Growth is important Revenue. When you talk about revenue, you're talking about growth. When I talk about profit, I'm talking about stability. Yep, and if I don't have that stability, I really can't invest much more in growth.
Speaker 1:Yeah, people just like talking about growth. They do it's sexy, they like talking about it. Oh, we doubled our revenue last year.
Speaker 2: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 possible Mathematically, right, you couldn't cause. You probably have a 20% net profit margin anyway, so you could double. So, yeah, your bottom line probably improved, but it probably didn't improve by the same ratio. If you doubled your profits, your profits, your profits didn't double.
Speaker 1:No, yeah, if you doubled your revenue?
Speaker 2:Yeah, you spent a lot more. You spent a lot more to to get that revenue.
Speaker 1:You probably spent a lot in advertising or you did something, and isn't there like a percentage people need to do? Like what is it? It's like a third or something. People ask me that a lot.
Speaker 2:Yeah, it's so industry dependent, but I, you know, 10 to 20% feels a lot better to me than a third. But you know, was it Ogilvy or someone said that?
Speaker 1:You know I think it was Ogilvy 50% of my advertising is wasted. I just don't know which 50%.
Speaker 2:Yeah, he's absolutely right. But you know, the other thing that I think someone with a side hustle should recognize, even though they'll say they want to have this problem is fast growth will kill a business faster than slow growth Any day. Any day, it's proven. Yeah, because with fast growth you're outrunning your cash, oh, and then you borrow, and now you're borrowing to feed growth, and it takes one thing to go wrong. It takes one big customer to delay payment or not pay. Oh, that's a good point For a small business that could just cripple you. It's, and all of a sudden it's a small business. I can just cripple you.
Speaker 1:It's a house of cards, that's just debilitating if you're, if you have a big customer, that's just not, or you, I mean, we've got customers that are net 90, net 90, well, yeah, so I gotta carry that, I gotta pay my employees, I gotta let them you know, and and I wait on a check. I mean it's great when you get it 90 days later, yeah, but it sucks to have to wait like that. And it's like these are big customers, the bigger the customer probably, the more, the longer they wait to pay you the fortune 1000.
Speaker 2:Yeah, when do you get paid? When they, when they tell you that they're going to pay you?
Speaker 1:Yeah, but imagine being a small business and taking on one of these big clients that are net 60, net 90, you know not every opportunity is a good opportunity.
Speaker 2:That's right. So if you're selling product and you're not getting paid for 60 or 90 days, think about all the cash that's going out to build the product, for the wages and everything before you actually get paid for it.
Speaker 1:Yeah.
Speaker 2:Because it's not like you're setting the margin on that either. No, so the big company is telling you basically the margin they want to purchase at and when they're going to pay you. Yep, I don't really like those odds, those suck.
Speaker 1:It's great for them. It's great for them. They're smart, they know what they're doing. Great for them.
Speaker 2:They've been doing it for years. Great for them all day long. I had a big, a big company I dealt with once as a CFO. They gave us a choice you can get paid within 15 days with something like a 4% haircut, or you can wait 90 days and get paid in full.
Speaker 2:Oh, wow, it's really tough math because it's never a pure math problem. You've got all everything else going on in your business to try to figure out. Well, can I really live without that cash? Even though I I don't want to take the 4% haircut, most people will just take the haircut because they got to have the cash for other reasons.
Speaker 1:That's right.
Speaker 2:Yeah, wow, because it and often because you're trying to grow too fast, you're out running your cash. That's wild.
Speaker 1: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 like them to reach out to you.
Speaker 2:Yeah, so the the profit architectcom is my site. I am a CPA. I have done um a couple of hundred planning sessions for small businesses. I've been a president and CEO a non-family member CEO of a manufacturing company, so I've seen just about every possible side of small business ownership. At this point oh yeah, I have many chapters in my book so that I'll get around to writing one day. But where I am now is much more focused on small businesses and helping them get more profitable quickly. And the reason is I wish it hadn't taken me a couple of decades to realize it, but that's just where we are. A couple of decades to realize it, but that's just. That's just where we are.
Speaker 2:You, reversed out, could come to a small business and all of your ideas are great and they're going to be successful. What's really in the mind of the small business owner is not only do I not sure I have enough money right now for it, I don't know where it's going to be in six months. So it's all that lack of certainty. That's what holds people back from making decisions that could be really good for their business. Yeah, and so you know. After, after going through you know, all day planning sessions with businesses and crafting all these great ideas and see most of them not really implemented. I just finally realized if I can just sit down with them and get some quick wins and clean up what's going on inside their business because I'm not the marketing strategist that's for you. I'm totally on the inside and helping with pricing and managing expenses. If all of a sudden that bottom line grows by 10% or 20%, that business owner literally feels better about everything and is willing to start making the right investments to grow the business.
Speaker 2:Yeah, because it's stressful, it's very stressful, yeah, it's very stressful, yeah, it's very stressful. So until we get there, it's uh. You know, it's really hard to get their attention for for someone like you, because because intellectually they know it's a good idea, but they have, but they're so uncertain of the next six months that they don't want to commit additional expense to it.
Speaker 1: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 more clients? Then we're in bad shape because now we're spending money on this and we don't. Yeah, I mean it's. I can see that. Yeah.
Speaker 2:So you know, I I talked before about networking and you got to articulate your value. Well, I I talked before about networking and you got to articulate your value. Well, I'll put a little different spin. What problem do I solve? The problem I solve is inconsistent profitability. That's all I do. Inconsistent profitability Because if we can get to consistent profitability, much, much better decisions are being made. So I do that. I've got proprietary software or I can pick apart a company. But really, more importantly, I do it through workshops and these are being made. So I do that. I've got proprietary software where I can pick apart a company. But really, more importantly, I do it through workshops, and these are educational workshops. Right now they're local. I'll have one virtual soon and we'll we'll get that in the show notes or something like that. I'll get the link and it is so educational. I tell people leave your wallet at home because there's nothing to buy.
Speaker 1:Oh, wow.
Speaker 2:And I will take you through several different ideas and I more or less guarantee that anyone who participates is going to walk away with a couple of ideas and, more importantly, a different way to think about their business, interesting what those numbers are really telling them. Yeah, and then if you know down the road, if you really like it, if we start to work together, that's great. But I do that with a guaranteed ROI, because now I know your business so well and I've modeled it out. You're ready.
Speaker 2:You're prepared Because you're telling me what you want to do and I'm just helping you get there, wow. So, it's a lot of fun.
Speaker 1:It's good to have a guy like you here. I mean, for the small businesses around town. I mean, no, that's so important. Yeah, I mean, if you're and this is, it's funny, because governments are interested in economic development, right, local governments are, oh, economic development, let's bring in more businesses, but that's kind of where it ends. Oh, yeah, it's not.
Speaker 1:Hey we've got okay, great that you're here, great that we have more small businesses starting up. But go talk to Dan Hackett like, get this going and and and and. Figure this stuff out, because it's going to make them stick around. And what is it like? A 10 times more to find a new client for me, right?
Speaker 1:It costs me 10 times more to find a new client than just get money from existing clients. Well, it's the same thing with economic development Like it's going to cost you 10 times more. It's going to take 10 times more effort to bring in a business to say, covington, than it is to make sure that an already existing business is successful.
Speaker 2:I would rather have five Covington businesses and five people over the next year than than work ourselves to death to to bring in one that brings in 50 jobs, because what we also see a lot in the headlines is we don't even know how long those 50 jobs stick around. That's right, but if if I'm growing my business from 10 to 15, I'm a keeper, I'm going to be around. Those are, those are rock solid jobs.
Speaker 1:When you get to that point.
Speaker 2:And that's right, and that then you're right. That's what drives the economy.
Speaker 1:Yeah Well, I really appreciate you coming on the show today and good luck with everything and good luck helping people get their businesses in good shape. Yeah Great, I appreciate it, adam. A lot of fun, all right, thank you. Is in good shape. Yeah, great, I appreciate it, adam. A lot of fun, all right, thank you. Thanks for joining us on this week's episode of Side Hustle City. Well, you've heard from our guests. Now let's hear from you. Join our community on Facebook, side Hustle City. It's a group where people share ideas, share their inspirational stories and motivate each other to be successful and turn their side hustle into their main hustle. We'll see you there and we'll see you next week on the show, thank you.