Side Hustle Finances Blueprint for Quick Payments and Growth

Welcome to Building Better Developers, the Develop-a-Nord Podcast, where we work on getting better step by step, professionally and personally. Let's get started. Hola! We are back again for yet another episode of Develop-a-Nord, Building Better Developers, working on our Spanish as well. One single word at a time. I happen to be Rob Broadhead. I am one of the founders of Develop-a-Nord, also the founder of RB Consulting, where we are out here to help you leverage technology better. Bottom line, we help businesses simplify your technology, build a clear roadmap, and move your way into the future of growth. The people we talk to are going to be people like startups and growing businesses, companies in transition where you're trying to pivot, you're trying to move, you're trying to step into a new area, a new clientele, a big new customer. These are things where you need clear vendor agnostic technology. I love having used that one before here, but I'm going to use that now because that's part of our deal is that we are technology and vendor agnostic. We're not going to sit here and tell you that this is the package or one of these three options is what you have to take. We're going to talk to you about what you do and then we're going to craft a special recipe for you for success, give you a roadmap and let you take it and run, or we can help you implement it however it needs to be done. That can include things like simplification, automation, innovation, integration, lots of different ways to take, essentially thinking of the steps of your processes and find ways to do those better, faster, smarter. Some people would call us a fractional CIO. We're just here really to be a full-time partner. Now, good and bad. Now, this is actually the hardest part. I get messed up with this sometimes trying to think of what is my good and my bad. So let's see in the last week. Honestly, things have been very good. It's really interesting is that I have had there are things that are out there that are like life, business, stuff like that. There's always things just like, oh, this could be a little bit better. There's things like we're at a crossroad. We're finishing a couple of projects. We're trying to figure out what the next projects are. There's always some bad and some angst and stuff like that that goes with this because you're like, okay, well, what are we going to do next? And especially us because we might shift gears and go to completely different technologies or a completely different approach. So that is, I guess, a little bit of a bad thing. However, the good thing is that we have a pipeline of people. We're getting to talk to people and it really has freed us up to do those sales calls and stuff like that, which are, yeah, salesy and things like that. But we're not really heavily sales. I'm not that kind of person, but I am a heavy talk to you about your business kind of person. Those are great. I guess, technically not working necessarily in my business. I'm really more working on my business. It is awesome. It is fun. It is a great way to learn how a lot of different people do their stuff. And every time I've walked in these conversations, I've walked away going, wow, that's cool. I didn't know people did that that way or that people might think of doing that that way. Or particularly that would be like the special secret sauce that a company uses. Just like passing stuff over from one co-host to another. I don't know if I do it any special or anything like that. So I'm just going to toss it. I lost it. I was going to try to get some really cool thing. Passing like a newbie. Go for it, Michael. Improve upon my mediocre effort. Hey, everyone. My name is Michael Mulosh. I'm one of the co-founders of DevelopNR, Building Better Developers. Check us out on DevelopNR. I'm also the owner and founder of Envision QA, where we help businesses run better by making sure that the software works the way it should. Essentially make sure that the software is working for you and you're not working for your software. Whether you're managing customers, selling online, or just running a clinic, we make sure that your systems are more reliable, more efficient, and easier to use. That means fewer headaches, happier customers, and more time to focus on growth and your business. We handle things like building customer tools, fixing slow and buggy systems, setting up automation testing, and make sure your software is ready before you launch. In short, we take care of your tech behind the scenes so you can focus on working on your business and enjoying your customers and making money. Learn more at EnvisionQA.com. Good thing, bad thing. Well, let's see. Good thing I had a little bit of time this past weekend to, I just had to disconnect from things for a little bit. So I pulled out my Nintendo Switch and I started playing Hollow Knight, which I found out for some reason the way the controllers are set up on the Nintendo Switch Pro versus the PlayStation controller, I can play the game better on the Nintendo than I can on the PlayStation. I'm enjoying this game so much more for the third time around than I did the first two tries. And it's just fun. It's a great game. I'm looking forward to the sequel. So I guess the bad thing is I don't have time right now working on the end of a project to really dedicate too much time to gaming, but I was able to get a little bit gaming time again. That is always a plus. I'm hoping this year that I'm going to get a little bit of my, finally get back to like take a serious break towards the end of the year and get caught up on some of my gaming. My various devices are occasionally saying, hey, be great to play us every more than 30 seconds once a week. Outer world too. More importantly, diving right in. So this is accounting tips for side hustles, how to manage invoicing and billing like a pro. We kicked this out. A chat GPT. We're back on that. Kicked out the great title and it says it can really resonate with freelancers, entrepreneurs and developers who are just starting to monetize their work. Here's how you could break down an engaging podcast episode. Episode flow and talking points. One introduction, why accounting matters for side hustlers. Explain why good financial habits make or break a side hustle. Highlight common mistakes. For example, mixing personal and business funds, ignoring taxes, inconsistent invoicing. That is a season in itself. So first off, I think there's two big things for this. The first one is that you need to understand that a side hustle is not just free money or something like that. That when you step into a side hustle, you still are needing to deliver products and services. And way too often I have run into businesses and owners that have had somebody that's working on something. It was a side hustle and it got to be too much and they gave up and they left somebody high and dry. That is not cool. It's great for me because I get that business at some point, but it sucks for everybody else. And it's just not a good way to be. So be aware of what you're doing. Be aware of what you're charging and what your time is worth and making sure that when you step into a project that you are not going to get to a point halfway through it, you're like, I didn't ask for enough money. This isn't worth it because that is not a good way to work. Secondly, just briefly, I'm going to say from the legalities and stuff like that, go do like a Google search or talk to chat GPT or one of those AI tools about famous people that ended up in tax trouble. And you will find really cool things like the fresh Prince of Bel Air. Basically the entire show existed because somebody didn't pay their taxes. We won't say who he is, but he did go on to earn a lot of other money and do a lot of other stuff. There are a lot of very famous musicians and actors and actresses and stuff like that. They got into all kinds of trouble and we can do it even though, yeah, they make tons of money and they weren't paying attention to what they were doing enough. We even as small business owners and personal people, you can end up with a serious little tax bill if you don't watch out. So make sure that you're understanding for your own good and also for your legality good of being able to make sure that the money goes to the right place. And the mixing personal and businesses again, it's just like, if it's a side hustle, make it a side hustle, make it a business. If you're not going to make a business, don't bother with charging money and stuff like that and just make it a hobby. If you're going to do a side hustle, if you're going to build a business, do it the right way, because otherwise you're just playing at it. You might as well be a kid that's got his little plastic thing where he's making plastic tacos and selling them or something like that. That's totally fake. Do it for real. Trust me, it is worth it to you as well as such a good learning experience. It will help you even if you don't take that business all the way. It will help you talk to other business owners in the future. Very quick, had to run through those. Go ahead, Michael, your thoughts on this first point. Why accounting matters? Simply put, if you don't know how to budget your personal finances, you better do that for your business because if you don't, you're not going to know if you're making money, losing money, you're not going to know where you're accountable for, and things are going to get off the rails very quickly. A little side point to this, if you are doing this as a side hustle, basically as a solprenor, you are legally bound. You can be sued for a lot of things that you don't do. If you can't pay your bills, you can be sued for it. If you're going to pull the trigger and really try to run this as a business, go register as a business, get an LLC, protect yourself. But that means you also have to ensure that your accounting and your books are up to date, that you have good accounting, good books. I am pretty good about this. I will tell you the number one trick, and I'm sure I'm jumping ahead, is one of the things that helps me is I take pictures of all the receipts for all business transactions that I do. Because if I lose that receipt, you have to then somehow justify that you made the payment for this and that it was a true business expense. Otherwise, at the end of the year, you're going to be, Uncle Sam's going to be like, hey, that doesn't count. Oh, you owe us more money. Or, oh, you need to pay for that. So accounting matters, not just to run the business. It also matters to stay ahead of the law and make sure that you don't end up broke and basically ruin your personal finances in the process. So moving on to number two, setting up the basics, separate bank account and credit card for business expenses, simple accounting tools, Wave, QuickBooks, self-employed, fresh books, or even Excel, Google Sheets to start keeping receipts and using apps for expense tracking. Definitely, we've talked about that before. Make sure you have a separate account for your business, whatever it happens to be. I many, many years ago started separating stuff out for all of my little side hustle businesses. They were not official businesses. They were just me doing things. But it really helped, for example, even to end of the year, because they are business expenses. So when I wrote books, all the stuff that went into that came out of the money that went in and the money that came out all went into specific accounts, all that stuff still there. So if I ever had to go back and figure out what it cost me to do this thing or what I earned to do that thing, I can go do that. I can go track that stuff down. Even though a lot of it, nobody cares tax-wise because it's way, way beyond, way too old and way beyond all that stuff. But it's still there. So you can look at things and see how things change over the years, I guess, if nothing else. I do want to just jump on the simple accounting tools. Use a real one. You can use a spreadsheet. You can use some of these things. But use something that is an actual accounting tool because again, it will be a learning experience just realizing that you can't just put like, I did this and it's X amount and I did this and it's X amount and I did this and it cost me that learning how accounting less. I mean, if you've done it, gone through accounting principles in school or things like that, and you understand it great. But even then, I think it's very useful to actually think about your business as a business. What are the classifications of your expenses and your revenues? How do you want to track that? How do you gather it at the end of the year? Those things that a lot of people think is just, that's just big business. That's just people that have like, they're out on a stock exchange somewhere and stuff like that, a public corporation, but private corporations do it too. And it wouldn't hurt you to understand it better because you never know when your next customer or solution is going to be accounting and finance based. Thoughts for me, Michael? So I already mentioned the receipts. Don't be the guy that has a box full of receipts and takes them to the accountant in hopes that they will figure it out for you. No, use those tools. Waves is especially great. It's free. Well, they have a free tier and the free tier does a lot. If you don't want to pay for free and you can't afford things, Google Sheets is really good. Libre, if you can afford Microsoft Excel, great. I'm going to quickly jump on the first point there because I will say when I rebranded my business from Milosh Consulting to Envision QA, thank God I had a separate bank account. However, make sure you get a business credit card using your bank card to pay for bills, especially early on. You can get in trouble if your account is hacked or somehow someone gets a hold of your debit card, credit card information. That is not as protected as a credit card. It's flagged. It's marked as fraud. The money is immediately put back in. If it's in a bank, it can take anywhere between three to four days to a couple of weeks to get that money put back in. And at that point, you could be in trouble paying payroll, could be in trouble paying bills. So make sure you do separate the two. Make sure you protect yourself and definitely get that credit card because even though credit cards have higher interest rates, if you're doing your bookkeeping correctly, you should be able to pay that off every month and not incur a cost. One additional tip with that is get a credit card that has points that will benefit your business. If you're a computer company that has a lot of Apple products, get an Apple card. If you buy a lot of electronics and other things that are not Apple, maybe go get a Best Buy credit card. Use the point system of credit cards to their fullest and one, you're protected. Two, you're getting rewarded for just running your business. And then three, you know where the money is going because a lot of those have good tracking systems for where you're spending your money. This is not supported by Dave Ramsey for those of you guys who know who that is, but there is a lot to be seen for said for points and things like that. And definitely understanding cash flow. It's important if you have vendors and things like that and you've got bills to pay, you don't want to suddenly have to pull out of your personal bank account to cover stuff that your business does. But also when you ever get to the point to having contractors and employees and things like that is people like to get paid and if they don't, that can cause some problems. So make sure that you understand cash flow. These are the kinds of things that this is what running a business is and this is where we do step up to that level. And even I know, don't even stop me right there. I know some people go through and they are entrepreneurs and they couldn't find their way through Excel spreadsheet, much less figure out how to like, I don't know, even start QuickBooks and enter something in. But they don't know debits from credits and all that kind of good stuff. But you should because that's what makes you a better entrepreneur, a better business, a better developer, a better business. All of that stuff is having that solid and secure knowledge. It's like by the time you're done, you have your own MBA. That's pretty cool. Invoicing like a pro. What a professional invoice should include name, business info, client info, services, dates, payment terms. Why net 30 or due on receipt matters. Tips for faster payments. Use payment links or embedded pay now buttons. Offer multiple payment methods, PayPal, Stripe, ACH, etc. Automate recurring invoices if doing subscription style work. This is, gosh, this again, it's almost a season in itself about invoicing and how to do it and what you do and how strict you are and things like that. I will jump real quickly on the payment terms matter. There are if now if it's a little thing or it's like if it's just me and Michael and something that's like, you know, maybe like, hey, can you give me that pay? Like sure, because we know each other and stuff. Yeah, as soon as you step into a business, even if I know Michael, if he's got a somewhere that that's got to go somewhere into his company, it could take quite a while to get back. And those payment terms matter because a lot of businesses will look at that and say, okay, payment terms, net 90. I don't have to look at that until 89 days from now. Stuff like that is there like a lot of businesses because they're looking at cash flow. They may wait till the absolute last second. And if they do it and they go over, it doesn't hurt to have something that says, hey, if you make it, you know, if it's late, we're going to tack on a 1% fee or whatever it happens to be. Those kinds of things are not bad. Only thing I will say with all of those is, and actually goes back to credit cards as well, but definitely taking payments is make sure that you understand what are the fees involved with it, because sometimes that can, it can add up over time, especially if you're dealing with smaller transaction. If you're dealing with a huge transaction, you have thousands and thousands, tens of thousands, hundreds of thousands of lucky you millions of dollars. It's not necessarily going to be as big a deal, but there may be limits. And it does get back into a little bit. You want to make sure you're clear. Some of what Michael talked about is sometimes banks will put holds on certain amounts. And then suddenly, yes, you have the money, but you actually can't do anything with it for a week or sometimes two weeks. And trust me, that is frustrating and something you don't want to deal with because banks can be very non-personal. I think I'll just, I stole enough of them there. So I think I'll toss the rest of those over to you. I will say been there, done that. Cause I had with one of the contracts I had, there was a lot of large payments up front to get the account going, to get the project going and the bank held it because I had rebranded the company. So to the bank, I was a new entity. So now every single check I deposited was flagged for 10 to 30 days, no matter what it was. And it was annoying. And finally, after three months, supposedly you're supposed to build history and all that. I had history with my previous company, but because you become a new entity, it resets. So be cautious of that, especially if you're rebranding. The other thing I'll point out here is depending upon your payment method, if you are trying to recoup, if you have like a 3% that you have to pay that you want your customer to pay, if they pay by credit card, gas stations do this. Hey, you get 5% off if you pay by cash or something along those lines, you can do something similar, but make sure the tool you have allows you to accept the payment for that. I'll warn you that like waves does not pay pal. It depends on the payment tool. You plug into PayPal. I know with the like QuickBooks online or pay whatever it is, the online tool like stripe, depending upon the tier you pay, you can charge for that. But now you're paying more money to charge your customer for that. So you're still it almost as a wash. So be careful trying to recoup some of those costs because you may end up paying more money to try and keep that. And the last thing I'll point out here is within some of this, especially with the banks, if you're plugging in these tools like ACH, things like that, there are hitting costs involved with that. The banks will charge you for that. You might be able to pass that along. You might not. So do your homework first before you get into that later and find out that oops, I can't pay my employees because I lost 20 bucks on a transaction fee. Billing best practices set clear terms before you start work deposit milestone billing project based versus hourly how to handle late payments gracefully, but firmly and importance of contracts or agreements even for side hustles. I have lived every one of these in the positives and the negatives. I have definitely particularly early on when it was a side hustle, when I was building up my business before it was truly a business. There are a lot of times that I ran into issues and actually even since then there have been more than a few times that I've run into issues. This goes back to requirements and things like that and making sure that there is very clear, like this is what done means. And making sure that you are honestly, I hate it because I like to be that trusting fool, but you cannot be. It has been way too many times that people have like, I'm like, okay, this is what we're going to do. And if there's not money up front, there is always that chance that, you know, 15 days or 30 days later or 60 days later or whatever it is. They're like, we don't really want to pay that. And unless you want to like, depending on what it is, especially a side hustle, because a lot of times it's so small, it's not worth it chasing it down. And you just write off maybe hours or products that you did. Now there are things you can do to make sure that you protect yourself so that you don't, for example, like deliver a finished product until you've been paid. Of all people, a lawyer many, many years ago said that, I guess, and I think it's like, I guess common in law schools or whatever is that you do not go to court until you have been paid, until the check has cleared. And I think that kind of an idea is something we should have is you do not deliver source code. You do not deliver a solution until the money has been paid. And I have had too many times that, which, and actually one would be too many, but I've had a couple others where people end up getting laid into a project and they try to like, wrangle it around thinking like, hey, we're going to dangle the fact that we're going to pay you the money we owe you and try to squeeze a little extra workout or something like that. So make sure that you have contracts and that you cover yourself. Make sure like, if you're going to go in and you're working, but you haven't been paid yet, that you are very, you, trust me, it'll be worth it. Set hard rules of this is how far I'm going to go. This is all I'm willing to accept from the start and then make sure that you're, you know, that even your customer is going to understand that that's something that you should be like, Hey, if I'm only going to accept a $500 receivables waiting for this person from this company, then when that thing hits $500, I'm sorry, I've got to deal with it. Like you've got to get paid or I'm, the work is paused or we quit or whatever you need to do. Cause I have been burned horribly by that early on. And I sort of just kept on doing stuff partially because the bill was such a level that I like, I needed to keep doing it. And it was valuable to keep earning money, earning money theoretically. And I did eventually get paid, but it was really a pain in the buttocks as some people would say. So I know I'm on a sandbox or I'm a sandbox, I'm on a soap box, but get a contract, be clear from the start and don't be afraid to call people out when they tried to, when they slip or they slide. And this goes back to you need to be doing the same. You need to treat, be a business and you need to be treat people like you're working with a business. I would give you time to talk, but I'm looking at, I'm like, I think we're just about out. You know, get a lawyer, find a lawyer site or things like that. Get some legal documents involved. If you don't know about contracting, you can easily go find documents online or just go hire like legal zoom or something like that to get some legal documents that you can put out there when you have customer signed contract. So you at least have something legit or legal enough that if they don't pay and you have to go out to the customer, you have the documents and the contract to go to court. That is the kind of thing that you will get if you actually are watching us on YouTube is bonus material like that. Ageless wisdom from Michael that comes after we stop recording the audio side and we go strictly back to the video side. So if you're on the podcast, go jump out to develop a nerd channel on YouTube right now and you can catch whatever great bonus material comes after this episode. We probably don't actually mention that often enough. We do often mention, shoot us an email at info at developer, nerd.com. Let us know what you think. If you think that I cut Michael off too much, I will cut you off too, but no, I won't actually, we will change our stuff up because that's what we do. Let us know what you like, what you don't like. What are some of the topics we've covered? What are the things we haven't covered that you would love us to do or perspectives maybe that we haven't taken yet or we haven't dove into that you would love to hear from us. You can leave us a review anywhere you hear this, whether it's out on YouTube, whether it's out on any of the podcasting, various sites and stuff like that X we are at developer, nor you can go to the developer page on Facebook and developer.com. You can leave us stuff all over the place there. Even the contact us form so we can hear from you and you can help us build a better podcast to build better developers such as yourself. You're giving back to the community when you do so. I don't want to put too much pressure on you, but there you go. The community needs you. So give us some feedback and we will be more than glad to sing your praises moving forward because of that. That being said, we're going to go on to our bonus round after this. So those of you that are on YouTube, you get it, the rest of you come on over, check it out. The water's fine. Jump on in. You got there and have yourself a great day, a great week, and we will talk to you next time. Thank you for listening to building better developers to develop a new podcast. You can subscribe on Apple Podcasts, Stitcher, Amazon, anywhere that you can find podcasts. We are there. And remember, just a little bit of effort every day ends up adding into great momentum and great success.