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5 Tips for Building a Side Business

You’ve probably noticed that people are embracing entrepreneurship like never before. Due to the widespread availability of technological business tools, there’s never been a better time to become your own boss. With an internet connection and a smart-phone or laptop, you can work from just about anywhere on the planet.

If you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

While there’s nothing wrong with holding down a W-2 job and getting a steady paycheck, having income from your own business comes with many upsides. But if you’ve been dreaming of quitting your day job to start a business, you might be wondering if taking such a big leap is worth it.

The good news is that there are incremental ways to become self-employed that are stable and reduce your risk, instead of plunging abruptly into a precarious financial position. In this chapter excerpt from Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers, you’ll learn practical strategies for building a solo business while keeping the security of a regular job.

Tips for building a business on the side

Becoming your own boss may seem glamorous from the outside, but it can have stressful pitfalls, such as little pay, no insurance benefits, and unpredictable clients. However, you can avoid or minimize some of the downsides by maintaining a reliable day job while you grow your solo business.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk. A steady paycheck may give you the confidence you need to take business risks—such as buying more advertising, equipment, or software—that will make your venture more profitable.

Having the security of a job and the excitement of becoming a solopreneur gives you lots of upside with much less risk.

Aside from maintaining a reliable income stream, being both an employee and an entrepreneur can make you a better worker. In my experience, growing a side business also builds skills and experiences that make you more effective at your regular job. You may even find your side hustle revives an appreciation for your day job. There’s a lot to like about having a salary, benefits, and other perks, after all.

Whether you decide to be both an employee and your own boss for weeks or years, it will take some juggling to manage successfully. Here are five tips to face your career fears responsibly and prepare for the future by adding entrepreneurship to your resume on the side.

Define your vision for success

Before changing your job or making the transition from employee to self-employed solopreneur, take the time to define what you truly want to achieve in your career. Sometimes your ideas about success come from other people, and they can cause you to follow a career path that never truly fulfills you.

Maybe your boss thinks you should regularly work late so you can climb the corporate ladder, or a parent says you should go to graduate school. You might take a lucrative job in a field you’re not crazy about because that’s what your friends are doing. But if that job requires frequent travel when all you truly want is to start a family, care for aging parents, or spend time enjoying where you live, you’ll never be happy.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

If you don’t pause periodically to reflect on what success means to you, it becomes easier to follow other people’s priorities when it comes to your work. If your decisions aren’t purposefully leading you toward a life that excites you, you’ll likely wander away from what you genuinely want.

Never let external markers of success, such as a big paycheck or a fancy job title, become more important than your heartfelt calling and goals for your life.

That said, getting in touch with your real desires isn’t always easy, and you might have to listen carefully to hear your inner voice. Try incorporating some quiet time into your daily routine. When you first wake up or when you’re settling down at bedtime, think about what you’re grateful for—but also what you’d like your life to be. Consider your definition of success and any changes you’d like to make to your life in the near and distant future.

Ask yourself the following questions to better understand your values and get clarity on your unique vision for success:

  • What type of work makes me happiest? 
  • Where do I want to live? 
  • What types of people do I want in my work life?
  • What does a good life mean to me?

This exercise isn’t something you do once to figure out the arc of your entire life. You need to come back to these fundamental questions during different seasons of your life and career, because the answers may change, sometimes repeatedly.

Over time, your working life is sure to change, in both good and bad ways. When you find yourself getting restless or feeling like you want more from your job, slow down and become more introspective. It can reveal a lot about what your next career or business move should be.

RELATED: How to Create Your Own Self-Employed Benefits Package 

Create a side gig

Even when you’re clear about what you want, one of the fastest ways to ruin your financial future is to take a flying leap from a steady paycheck. Jumping from a day job into an uncertain, full-time venture too early could mean trouble. You might face significant financial struggles and even get into debt. Many businesses take years of hard work before they’re profitable enough to support you.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers.

Hanging on to your day job gives you the financial security you need to try out new business ideas, especially if you have a spouse, partner, or kids who depend on your income.

The best side gigs combine work that you’re excited about with something that you’re uniquely positioned to provide. These businesses may also come with a large existing customer base or appeal to customers who are willing to pay you well for the skills and experience you offer.

I was a part-time entrepreneur for a decade before I said goodbye to my employer. I enjoyed having a mix of job stability and entrepreneurial upside. Plus, I found that expanding my career by adding self-employment to a W-2 job made me much better at both.

If you slowly add entrepreneurial experience to your career, you’re likely to gain a variety of skills that will make you more valuable to employers. It may be easier to experiment with business-formation ideas when you have less financial stress or know a side gig could actually complement your existing career.

The bottom line is that creating a business on the side protects your income, diversifies your network, and improves your skills, instead of leaving you financially vulnerable. If you enjoy your entrepreneurial work and find that it pairs well with your day job, the benefits and personal growth can really pay off.

Negotiate your job flexibility

If you plan to start a business on the side, or you already have, you know you’ll be working more, perhaps a lot more. You might need to work early in the morning, late at night, or on weekends to fit it all in. That could stress your relationships or cause you to burn out if you don’t take some precautions.

Consider some different ways that you can tailor your business for your day job, and vice versa.

Once you’re confident about your business idea or begin seeing increasing revenues, you may find that you need more flexibility in your schedule. At that point, consider some different ways that you can tailor your business for your day job, and vice versa.

In 2008, my employer began feeling the financial pinch of the Great Recession. My podcasting and blogging career had started to take off by that point, so instead of allowing my position to get downsized, I proposed a solution that my boss liked. I’d work four days a week for a couple of months and then go down to three days a week for the rest of the year. Then we’d reevaluate where the company stood and discuss whether he could still afford to keep me on as an employee.

My employer would save money by paying me less, and I’d have more time to work on creating content, partnering with brands, and writing my first book, while still having a regular paycheck coming in. If I hadn’t suggested that solution, my company wouldn’t have known that I was willing to cut my hours. I didn’t offer to tell my boss what my plans were for my newfound free time, and he didn’t ask.

You may be able to negotiate with your employer for more schedule flexibility.

You too may be able to negotiate with your employer for more flexibility. You might ask to work fewer hours, to maintain the same total number of hours but work fewer days per week, or to work from home a day or two each week.

If you have a long commute or spend a significant amount of time getting ready, packing a lunch, and getting out the door in the morning, working remotely could save a lot more time than you think. Then you can invest that saved time in your side business.

Find more time in your day

If you can’t get more flexibility or you worry that even asking for it could put your day job in jeopardy, there are other options. One is to structure non-negotiable time for your business into your day. For instance, make a rule that you’ll step away from your desk for a solid hour (or longer if possible) during lunch to accomplish something meaningful for your business.

Find a nearby cafe or reserve a conference room in your office where you can work and eat undisturbed. I did that for many years, and it’s incredible how much you can accomplish in 45 minutes if you truly focus. If you can’t find enough quiet or privacy in your office, you could even work in your car.

It’s incredible how much you can accomplish in 45 minutes if you truly focus.

If working on your business during your lunch hour isn’t possible with your day job, consider coming to the office an hour earlier or staying later. You could also work on your business in a nearby coffee shop or a co-working space (where drop-in memberships can often be had for the same price as joining a gym) before or after your job. The idea is to create a routine that builds in regular time to focus entirely on your venture and to complete essential tasks.

Another option is to outsource a portion of your work. If you can afford to delegate tasks to freelancers, that can help you balance your to-do lists.

When your day job is so unpredictable that it prevents you from working on your side gig for long periods, consider getting a different job with a more reliable schedule. If you’re truly committed to getting your business off the ground, you may need a position with more flexibility so you can do both more easily.

Have a solid exit strategy

Having an exit strategy is a common concept in the business world. Partners and investors want to know what will happen after clearly defined milestones are reached, such as taking a company public or selling it after a certain profit margin is achieved.

But employees should create exit strategies, too. It’s a great way to force yourself to think about the future and what you would or should do next. With a W-2 job, you never know what’s around the corner.

It’s wise to start every professional relationship with an idea of how it could end.

Your company could suddenly downsize after a merger or an unexpected loss of market share. Your department could be reorganized after new leadership begins. All these scenarios have happened to me at some point in my career.

It’s wise to start every professional relationship with an idea of how it could end. This ensures that you’re never caught entirely off-guard. Knowing that you’ve thought about the end of a job or a business partnership can make you feel more secure about a potential split.

If you’re unprepared for an interruption in work or business income, it can be devastating to your emotional and financial life. So whether you’re laid off or you voluntarily quit, prepare for it now.

If you have a financial runway to find new opportunities or you’ve built an income from a side business, quitting or getting fired can be a positive experience. Having a good exit strategy can make the difference between feeling crushed by a job loss or becoming empowered by it.

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The Highest Paying Trade Jobs On the Market

Pursuing a four-year degree or higher isn’t for everyone. If you fall into that group, it doesn’t mean you can’t get a high-paying job. There are a surprising number of trade jobs that pay salaries at or above careers that require a four-year degree. They pay well because they’re in demand and are expected to […]

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How to Buy a HUD Home at the Hudhomestore Website?

Using the Hudhomestore to buy a HUD home is easy. If you’re looking to buy a HUD home, the Hudhomestore website is the best place to do it. It can be found here at hudhomestore.com. HUD homes are listed for sale at the site. While anyone can buy a HUD home, you will need to …

The post How to Buy a HUD Home at the Hudhomestore Website? appeared first on GrowthRapidly.

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Why Refinance Rates Are Higher Than Purchase Loan Rates

Mortgage interest rates dropped dramatically over the summer, to the point where home loans have never been cheaper in most of our adult lifetimes. With rates at historic lows, you might’ve considered taking advantage of them, either by purchasing a new home or refinancing your current mortgage. Recent figures from Freddie Mac show that mortgage […]

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15 Numbers You Need To Know To Make Smart Financial Decisions

The Wall Street Journal lists 15 important numbers that everyone should know to make better financial decisions. Here they are, broken down by category.

The post 15 Numbers You Need To Know To Make Smart Financial Decisions appeared first on Bible Money Matters and was written by Peter Anderson. Copyright © Bible Money Matters – please visit biblemoneymatters.com for more great content.

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What to Look for When Buying a House

In this article: What are the top features buyers look for in a home? 1. Search for the right price 2. Prioritize the location 3. Think long term 4. Assess property condition 5. Don’t focus on minor cosmetic details 6. Stick with your must-haves While everybody knows that buyers shop based on price range, there […]

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How to Efficiently Rehab

  Show Summary Welcome back to the show! Excited to be here today with Glenn Williams. Glenn rehabs a lot of houses, I’ve rehab hundred of houses, and you start to learn…

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8 Essential Rules for Surviving Financial Hardship

At some point, most people experience an unexpected crisis that shakes their financial world. It could be losing a job, receiving a huge medical bill, or having a car break down at the worst possible time. But surviving a pandemic is a situation you probably never thought you would face.

No matter what challenge you’re facing, you’re not the first.

Along with the public health toll, the COVID crisis has put millions of people out of work. For those struggling financially, here are eight critical rules to help you manage money wisely, stretch your resources, and bounce back from this unprecedented health and economic disaster.

8 rules for managing a financial hardship

Here are the details about each rule to manage a financial setback during the coronavirus crisis.

Rule #1: Accept your situation and use your resources to seek help

The key to successfully navigating a financial setback is to be realistic. If you’re in denial and don’t face money troubles head-on, you can quickly compound the damage.

Instead of focusing on the problem, getting angry, or letting stress overwhelm you, channel your emotions into finding solutions. Start talking about your challenges with people and professionals you trust, such as a money-savvy family member, financial advisor, legitimate credit counselor, or an attorney.

Instead of focusing on the problem, getting angry, or letting stress overwhelm you, channel your emotions into finding solutions.

The following financial associations have certified volunteers who can offer free help and advice:

  • National Association of Personal Financial Advisors
  • The Financial Planning Association
  • Association for Financial Counseling & Planning Education

Rule #2: Get a bird’s eye view of your finances

To fully understand your situation, create a list of what you own and owe; this is called a net worth statement. Compiling your data in one place helps you evaluate your financial resources, make decisions more efficiently, and have essential information at your fingertips if creditors or advisors ask for it.

First, list your assets: 

  • Cash
  • Investments
  • Retirement accounts
  • Real estate
  • Vehicles 

Then list your liabilities:

  • Mortgage
  • Car loans
  • Student loans
  • Credit card debt

Include the estimated values of your assets, the balances on your debts, and the interest rates you pay for each liability. You could jot down this information on paper, enter it in a computer spreadsheet, or create a report using money management software.

When you subtract your total liabilities from your total assets, you’ve calculated your net worth, which is an indicator of your financial health. It’s not uncommon to have a low or negative net worth when you’re in financial trouble.

RELATED: 10 Things Student Loan Borrowers Should Know About Coronavirus Relief  

Rule #3: Understand your cash flow

An essential part of bouncing back from a financial crisis is keeping an eye on your monthly income and expenses. Create a cash flow statement that lists your expected income and typical expenses, such as rent, utilities, food, prescriptions, transportation, and insurance. Again, you can create this report manually or by using budgeting features in a financial program.

Understanding where your money goes is the only way to prioritize expenses and cut all non-essential spending.

Understanding where your money goes is the only way to prioritize expenses and cut all non-essential spending. Making temporary sacrifices will help you recover as quickly as possible with less long-term damage to your finances.

Rule #4: Shop your essential expenses

As you review your spending, it’s an excellent time to comparison-shop your essential expenses. Evaluate your highest costs first, such as housing, vehicles, and insurance, since they offer the most significant potential savings.

For instance, you may be able to move into a less expensive home, purchase or lease a cheaper vehicle, and shop your auto insurance to find better deals. Ask your utility provider about assistance programs that offer energy-saving improvements at no charge.

Rule #5: Communicate with your creditors

If you haven’t been in contact with your creditors, start a dialog with each one immediately. You’ll come out ahead and get favorable treatment from creditors if you are proactive and honest about your financial troubles. Ask them for solutions, such as deferring payments for several months, setting up a reduced payment plan, or refinancing a loan to reduce your financial burden.

You’ll come out ahead and get favorable treatment from creditors if you are proactive and honest about your financial troubles.

Creditors are likely to ask about details regarding your financial situation, so have your net worth and cash flow statements on hand when you speak to them. Be ready to complete any required assistance applications quickly.

Rule #6: Prioritize your debts carefully

Based on guidance from creditors and finance professionals, prioritize your bills and debts carefully. Your goal should be to conserve as much cash as possible without skipping essential payments. Always pay for necessities first: food, prescription drugs, and auto insurance.

Debts related to child support and legal judgments have severe consequences and should be prioritized

Use your net worth statement to rank your liabilities from highest to lowest priority. For instance, debts related to child support and legal judgments have severe consequences and should be prioritized. Keeping up with an auto loan is a high priority if you rely on your vehicle for transportation. Federal student loans are in automatic forbearance through September 30, and the relief may get extended through 2020.

Your unsecured debts—medical bills, credit cards, and private student loans—are lower priorities. Never pay these debts ahead of rent, a mortgage, or utilities when you have a cash shortage.

Rule #7: Don’t let collectors force you to make bad decisions

Prioritizing your debts means some may be paid late or not at all. If a debt collector contacts you about a low-priority debt, such as a medical bill or credit card, don’t allow them to persuade you to pay it before your highest priority bills.

Collectors may try various aggressive tactics, such as threatening to sue you or ruin your credit. A lawsuit could take years, and a creditor is more likely to negotiate a settlement with you. Remember that a creditor or collector can’t send you to jail for civil debts.

If you are behind on bills, that fact is likely already reflected on your credit reports. By the time a collector contacts you, the damage is already done, and paying the bill won’t improve your credit in the short-term.

Rule #8: Take advantage of local and federal benefits

If your income and savings have entirely dried up, use these resources to learn more about local and federal benefits.

  • FeedingAmerica.org has a map showing local food banks
  • Supplemental Nutrition Assistance Program (SNAP) is the federal food program you may qualify for based on where you live, your income, and family size
  • MakingHomeAffordable.gov can help you find a housing counselor or see if your mortgage is backed by the federal government and qualifies for forbearance
  • Benefits.gov has a questionnaire that helps you discover the benefits you’re eligible for
  • Medicaid.gov is the federal health insurance program you may qualify for based on where you live, your income, and family size
  • Healthcare.gov is the federal health insurance marketplace where you may find plans with substantial subsidies if you earn too much to qualify for Medicaid

Financial challenges can cause you and your family to experience a flood of emotions, including anger, fear, and embarrassment. As difficult as it might be to put a financial crisis into perspective, it’s critical. No matter what challenge you’re facing, you’re not the first. There are millions of people who are dealing with COVID-related financial hardships.

Face the fact that your recovery could take a while. Do everything in your power to manage your budget wisely by getting organized, seeking ways to earn more, and spending less. Don’t be afraid to ask for help from creditors, seek free advice from professionals, and take advantage of every local and federal benefit possible.