Detailed Notes
Welcome back to our podcast as we embark on Season 21, episode 8, where we're shifting gears to focus more on mentorship and business discussions. In this episode, Rob Broadhead and Michael Meloche dive into the intricacies of bootstrapping a business. From minimizing costs to managing expenses, they offer insights and anecdotes from their own experiences as entrepreneurs.
Getting Started with Bootstrapping
Rob and Michael reflect on their early days of bootstrapping businesses and testing niches on a shoestring budget. They discuss the importance of minimizing startup costs and reaching the break-even point. Michael shares insights into balancing side hustles with full-time employment and the hidden costs of transitioning to self-employment.
Navigating Startup Costs
The conversation delves into the essential startup costs, from basic business tools to setting up a home office. They explore cost-effective strategies for acquiring the necessary equipment, including exploring pawn shops, yard sales, and online marketplaces. Rob emphasizes the significance of meticulous accounting in identifying the difference between business expenses and personal indulgences.
Managing Healthcare and Benefits
Addressing concerns about healthcare and benefits, Rob and Michael offer pragmatic solutions for self-employed individuals. They discuss options for affordable healthcare plans, including co-ops and catastrophic coverage. Rob highlights the importance of considering spousal insurance coverage and leveraging existing benefits until the business achieves sustainability.
Planning for Time Off and Holidays
The conversation extends to the nuances of time management, including holidays and vacation days in self-employment. Rob and Michael underscore the need to redefine traditional notions of time off and incorporate flexibility into entrepreneurial endeavors. They emphasize the importance of strategic planning to maintain work-life balance and avoid burnout.
Bootstrapping Bonus Content: The Video Perspective
Rob concludes the podcast with a teaser for additional content on the video side of their venture. He invites listeners to engage with feedback, questions, and topic suggestions, reaffirming their commitment to serving the audience.
As you embark on your entrepreneurial journey, remember to prioritize cost-effectiveness, strategic planning, and continuous learning. Tune in next time for more insights and practical advice from Rob and Michael. Have a great day, and we'll catch you in the next episode!
Additional Resources
Building a Business: All-in vs. Bootstrapping - https://develpreneur.com/building-a-business-all-in-vs-bootstrapping/
Strategies for a Successful Business Launch - https://develpreneur.com/strategies-for-a-successful-business-launch/
Launch Your Side Hustle – Amy Harrop Interview - https://develpreneur.com/launch-your-side-hustle-amy-harrop-interview/
Behind the Scenes Podcast Video - https://www.youtube.com/playlist?list=PLxXUHr7mZ-jF8Ip1xF8LUyY97Uzh5QWRq
Transcript Text
[Music] so uh yeah for those of you joining in uh obviously we're kicking off yet another episode series of episodes things like that we're going to talk about a couple things today um before we get into the the podcast thing uh really just to give you a little heads up we're going to talk business um building your business we're going to do a little bit about bootstrapping depending on the order of how these things go out but you're going to talk we're going this and the next couple episodes you're see something about uh bootstrapping and about sort of like setting uh financial goals so to figure out where you're going to break even and uh oh the other thing is a big one is Clarity and reality like realistic expectations in dealing with the customer in setting expectations and working on the the latest project so without further Ado we will just go ahead and Dive Right In on this side you got like not a whole lot of bonus there let's see what you get on the other end of this uh but we'll just go dive right into it hello and welcome back we are just cruising right along in our new season this is actually season 21 of the podcast and we are getting into sort of like a little bit of a shift gear if you haven't you know been around for a couple episodes we're focusing a little bit more on sort of like that Mentor Mastermind kind of stuff that we've done in the past quite a bit on the YouTube side now we're going to bring some of this forward into the podcast side and just discuss some of the business problems and and such that we've into as well as technical problems that we hit on any given you know day or week uh first go ahead and uh that's I guess I should introduce myself in case case we haven't met I'm Rob Broadhead and one of the founders of the de develop andur building better developers uh also a founder of RB Consulting and do a lot of of Consulting uh from a it point of view particularly doing it assessments and things of that nature my partner on the other end is Micha malash and I'll let you introduce yourself yeah thanks Rob so my name is Michael malash uh I am also a co-founder of developer ner and I also am a uh I have my side hustle is Envision QA where we do a lot of focus on the QA assessments QA audits for your software and also help you build the tools and testing uh cases you need to actually test your software so I want to get right into uh because we talked ear earlier when we were thinking about things to things we wanted to cover and you brought up bootstrapping in particular like bootstrapping your business so let's let's sort of focus on that this one is where did you want to where did you want to go in the bootstrapping discussion well we've had a lot of conversations on this over the years I mean there was one point what about 10 15 years ago where we were spinning up businesses and like to test niches to test ideas and different markets and we bootstrap things like to the nth degree right we were doing things for next to nothing open source all the way but the bootstrapping what I kind of want to talk about today or have our discussion with this is where do we go you know when you're starting out yes there's a certain level of bootstrapping you can do you know like how quickly can you get to market with the least amount of money to get up and running for your fixed cost and your startup costs because you know you're going to have some type of setup cost at the beginning get started but then you're going to have at least some type of residual fix cost at the beginning that you have to make sure you cover or at least have a way of funding and then the other thing that uh in the meeting I had last night we talked about taking it to the next level you know how when basically when do you define your break even point when you actually like get into the black when you actually start making money when you do you actually start having a profit and it brought up some questions that I never really thought about uh because we have bootstrapped some things for so long you just don't think about certain things or um like if you're running your own business or a side hustle you might not think about health insurance because you might be under your current employer's health insurance or your wife's health insurance or your husband's health insurance and just there were some things that we had a conversation about last night that's it's like well crap you know if you want to quit your day job and do your side hustle all the time there's some things you have to think about going forward that you might just not think about right now oh definitely there are uh had actually recent discussion with another friend of ours about side hustling and uh in particular he had a very you he would charge as a lower rate than he would normally do from a side hustle because he was like well I don't really have to like I don't have to put food on my table you know I don't have the expenses so I don't feel like I need to charge as much however even with a side hustle you should be you know you should still charge essentially a fair market rate which we've talked about in the past from a from a shifting from side hustle to day job you know real H real hustle or day job uh there is a lot that need that goes into that and it it's a little different now if you go back just a few years if you go preco there was a huge amount of stuff that people needed to think about because you weren't usually remote so if you were going to have an office that was going to be your side hustle if you need to go to an office you need to know what that cost was a lot of people if you needed to go purchase uh you know internet connectivity or a laptop or a desktop or things like that there's all this there's a huge amount of stuff that when we work for somebody else and particular when we work in an office we don't think about at all it's just it's just not something because it's just part of the job but then suddenly and this is what happened when Co hit a lot of people were working from home and what they were doing and for those you can't see I was air quoting that um they were doing this and they realized suddenly that I can't work they were actually doing work and they're like I can't work eight hours a day on my at my kitchen table that's like I've got too much stuff going on this doesn't work I I can't think I'm not comfortable all of those kinds of issues came up or they had like a you know an old 14 monitor that they had attached to a desktop that was a I don't know like a 386 or something was from decades back that they had to like hand crank at to start and they're trying to do work with that and they just it was fine maybe if all they were doing was you know browsing the internet briefly but when they suddenly have to go to do work with it they didn't have you know they didn't have what they needed and that's why you saw a big jump in like people buying desks for their home and people upgrading their internet connections and all of that stuff is the kinds of things you need to think of before you step into that you know take that leap of I'm going to go from full-time employee to employing myself yeah exactly and then you run into the other thing is when you go from that or even if you were physically in a brick and mortar still are you run into this situation of well what do I need to start up you know I have a home computer or do I have a home computer or do I have a tablet you know is there something you can repurpose without using work work equipment because you don't want to get yourself in trouble where you're doing your side hustle on your company laptop that's kind of a big no no stay away from that but the the like you said though you know people went out and they bought all this but some people don't some people are just starting out they they maybe have been through this and they're like oh okay I want to do something where would you begin so I would start simply by just listing the basics right you know are you writing software okay you know do you need a computer you know can you do everything you need on in a notepad you know notepads are cheaper than computers um if you do need a computer okay you're going to have to have some basic um business things right you got have a like we've talked about you know we have to go maybe get a logo uh figure out your company name uh you may have to pay for some basic startup cost at the beginning but then that's your startup right so like your domain name your email your website uh maybe a computer but that's fixed or that's not fixed but that's your startup that's a onetime kind of buy at the beginning and you don't need to renew it it it's not what I deem fixed fixed basically means you have to pay it every month regardless of what you're making right startup is just what you have to put in at the beginning so I know we've had some different um business models over the years so I've been a C Corp so proprietor I've been in LLC uh currently in LLC about to be escort so what are some of the things that you've run into when you've gone out of startup mode into fix mode now from a sole proprietorship I can tell you that you know there's things we can write off with your taxes you can set up a physical space for your home office things like that but that's taxes you know that's right off at the end as far as a business cost things that you have to consider would be like you know do you need to pay rent like you said you know do you need to go into an office but if you can carve out space within your home uh maybe you can charge yourself rent but then you have to take that deduction off like you can't use that deduction at the end of the year so it just kind of depends on the different business years so I'll let you speak to that for a moment oh uh there's a lot there so I think one of the F what I started way back um this was a long time is I this is back long enough that people had phones that you actually plugged into a wall and things like that so what I did when I first started out is I was looking at the idea of eventually working for myself and so what I would do is I go into the office and I'd look around I'd be like all right what do I have in the office that I don't have at home and this is before remote work so I I sort of had to like figure it out a little bit it wasn't like I was going to go work from home and go test it out now that that is the nice thing is now what you can do is you can actually you know go work from home if you can if your work allows it at all or if your side hustle allows it at all do a work from home day or a work from a work remote day and honestly if you're if your company doesn't allow it take a you know take a sick day take a day off or something like that and do just your side hustle for a day is just say all right I'm going to go work my side hustle for a day and I'm going to test it out I'm going to see how this works out and it may be you don't get far into your day before you realize oh I need a b c and d probably what's going to happen is you're going to realize that you can like you can limp along and then that's where you look at what are my what is it going to take me to upgrade to whatever I need to that's like my Baseline that I want and look at those costs and you can either figure out that's where you go through that decision of do I have the money do I want to spend the money to do that or am I going to just like suck it up and suffer for a while and that's going to be part of my goal which I've done that as well where I would adjust my side hustle stuff and basically be you know sort of going to this like hey I'm going to go chase down a project or work for x amount of money and once I get to that point that's going into the business especially from a side hustle you're basically saying okay I'm loading that into the business's coffers and once I get to a certain point now I can go like buy a laptop or buy a desk or whatever it happens to be so it's true bootstrapping where you're going out and you're doing what you can to generate work generate income use that to then sort of like get you set up as a as more of a real business I guess as to opposed to a side hustle because it's easy with a side hustle to just take that money and just like you know just turn it into whatever your favorite little things is it's said it's a little bit like uh when Tim Ferris talks about dreamlining and stuff like that you're just like you go generate the money and now I'm going to go a Porsche this is different this is where like I'm generating this money to put it into the business and then I'm going to turn around and use that at some point to have a launching pad so that I can move from side hustle to real hustle and so those are and it you you go to brought up a good point is you may not need a desktop or a laptop or a phone there like depending on what you have already you may have some of the the things you need it may be as simple as maybe you've got like maybe you've got a phone that basically is all you need the problem is you don't want to be typing like that you don't want to have like thumb you know texting type stuff you need a keyboard so you can get full-size keyboards for your phone I mean there's things like that you can do so maybe you look at what is the device you need actually you can take that phone and you can also cast its display to a screen so you could use your phone as a a laptop essentially if you as a mobile device if you want so I would want look into that I mean we're like at the very startup portion of it like you said the startup cost is figure out what is it what really do you need to do your business and then figure out what do you what would you like to have to do your business because those things do you know vary what a good example and then I'll toss this back to you was several years ago I'd like I'd had a I'd had laptops that I'd used over the years and I was like all right I want to jump into something new but I really need a more modern laptop and so what I did was just basically said okay I priced out the laptop said this is what I want and then said all right once I can generate x amount of you know that amount of Revenue I'm going to turn around and buy that laptop and that's the kind of stuff that yeah you if it's a business if you've got it set up right then you you get to write some of that stuff off or that's a business expense depending on how all of that accounting stuff works disclaimer I'm not an accountant I'm not a tax person talk to your accountant talk to your tax attorney for whatever you want to deal with but those things are the kinds of things you're going to want to take advantage of as you're shifting gears and it's why you want whether it's a side hustle or real business you want it to be a standalone its own account everything so the monies don't cross between your personal stuff in your business because then it makes it much easier take that pile from your business and say all right I'm going to use that to invest in my business all right back to you thoughts on that one since I've otherwise it becomes basically an expensive Hobby right because if you don't take the time so so that's one thing I want to touch on with what you said and we really haven't hammered that home yet so one of the things with starting up even if you're bootstrapping make sure you keep accounting of everything you buy everything you need everything that you're going to need if you don't this is just a hobby you're basically going to spend money on things as you need it you're not going to be able to write things up and you're not going to really be able to claim yourself as a real business the other thing that was interesting in that because you brought up you know using your phone in that a lot of places that a lot of people don't consider these days because you know with the tech boom of covid with everyone running the Best Buy all the sales online Amazon you know we still have Habitat for Humanity we still have um uh the Salvation Army we still have uh whatever the other one is I just do a blank on it um but Goodwill they do have electronics and you can actually find some Bluetooth keyboards stuff like that small stuff that you don't have to spend 50 60 bucks for at a high inflated price right now just go to your local store buy a couple broken pieces the other place I found interesting that my neighbor turned me on to a couple months ago was don't forget about pawn shops you never know what the heck's in a pawn shop and they turn around and put most of that stuff on uh eBay so you could also look at eBay I would stay away from some of the other ones that are gimmicky where it's like oh you know Pennies on it out read the fine line on that one that one's a little shady you pay like a penny per bid or a dollar per bid for something like it's very misleading but there are things you can do though cheap also don't forget yard sales I mean if you happen to have the time go check out yard sales the other thing to think about too is what do you need to just get off the ground so like for us being electon companies we can quickly go spin up a website Amazon gives you one free year quote free uh they've tweaked a little bit but you can pretty much get a Year's worth of web hosting for maybe 15 bucks for the year and then you add a domain name on top of that for about 10 bucks a year so you're still under about 50 under 100 bucks just to get out there then throw an email you know there's things that stack up so as you see I'm building a list of things that come to mind as I'm walking through don't go out and just start buying things that you think you need take it a second take a step back now I know I'm going to segue a little bit but take a second and look at your target market look at your side hustle who are your customers who are you trying to reach where's the work coming from see if you can double down on that with marketing or just you know maybe do social media there's things you can kind of work in for free that take time but you can't discount your time you need to also account for your time and that was something else that was in the conversation yesterday uh you know with doing these side hustles you know it's like oh cool you know my expenses are like a 100 bucks a month so I can just go do a couple jobs a month you know all is good well you can't qu your day job for that right because your day job you're getting paid a salary you have to actually break that down into all right what are you really making an hour and then what I found out yesterday is oh if you're going to be your own employer what do you have to pay in Medicare taxes what do you have to pay in payroll taxes what do you have to pay in health insurance cost and it was like oh suddenly my hourly rate just went up uh little bit to see to kind of supplement that because you're not thinking that way at the end of the day yeah I think and we this is going to definitely be a a two-parter so I do want to sort of wrap touch that wrap that piece up and then I want we'll you know sort of step into or we'll set the table for the next episode um yeah typically you need to add about 20% on top of whatever your salary is and that's what you really it really costs you so if you're making $50,000 a year because this is easy math it costs the company basically $60,000 a year for you now that can vary based on benefits and things like that it but and that's not like that's not like a Cadillac healthc care plan or anything like that's like just basic stuff but having done this several times over the over the now decades uh there's some things that I think people are very scared about that they don't need to be because they there is there are solutions healthc care is one of them because yeah you have you know the taxes it's like death it's there it's except for you see it far more often if you you die once you get taxed a billion times but you know you have to do that you have to have Medicare you have social security you're GNA have to pay you yes you pay it right now but there's this thing called the employer share that when you employ yourself you get to pay that part too so you know don't you suddenly the the rich guy that's sticking it to you you're the guy and you're realizing that they're not really sticking it to you but with healthc care is one that a lot of people worry about I don't you know I need Healthcare I have to have Vision Care I have to have dental I have to have this and that and the other that stuff does exist you can go out there you can find places that whether they're a co-op there are uh burden sharing type situations and then you can also go get plans that are Solo plans it's not that bad there's also ways that you can deal with it especially now because of uh catastrophic you can have like catastrophic coverage which is basically if you're already pre-existing conditions that kind of stuff there are ways to deal with that and I'm talking like from specifics I've done it with a family of of multiple kids I've done it when I've done it I've had it dealt with it multiple times where you've got somebody that is a cancer survivor that is a you know automatically nixed from a lot of insurance coverage there's all sorts of things like that that you can look into you can look into you can even add like if you want to have a 401k if you want to have a Roth or IRA or all that kind ofu those things all can exist outside of a company you just have to figure out what you're willing to pay and realize that that you are going to pay it's now something that you don't have to worry about uh one last one and then we'll and then I'll toss it to you was just time one thing that and I think I W we'll kick this into the next episode but is the idea of like holidays and vacation days those become very different when you go into working for yourself so I want to let you sort of get the last word on this one so I'm GNA go back to your previous one real quick with the insurance the other thing too with you starting out with the side hustle going into business for yourself whatever if you have a spouse that is employed and you can get health insurance through them until you have to actually hire employees or you're make enough that you can basically supplement and your wife can or spouse can retire piggy back off of that look at ways where you don't have to add on additional costs see what you can shortcut there'll be bonuses because we're going to wrap the podcast up but I'm going to talk a little bit more on the video side of this on the YouTube side so a little bonus content there uh as far as podcast is concerned though we're going to wrap this one up I want to thank you again for listening to us and for as always just an email at info developer.com let us know if you have any questions comments suggestions topics you'd like us to cover questions those kinds of things because that's what do we we solve this for each other but we also are more than for you guys for our customers and whoever else is out there that being said we'll let you get back to your day so go out there and have yourself a great day a great week and we will talk to you next time the rest of you are still here so next time is right now I want to talk about the last thing you said and I just forgot it it was about oh spouse and stuff this is where it gets again I'm not an insurance expert but there is a lot of stuff that you can do there one and I've known a lot of people that have their side hustle they have been basically they're covered by their spouse so they don't have to worry about insurance and that takes suddenly that takes a lot off of your plate also depending on what your insurance plan is depending on where your company is and stuff like that sometimes you get like and I've learned this is that sometimes you can get people essentially covered for free because you can get a family plan that has the same cost whether you have one two three four kids and it all counts the same as opposed and so you sort of Get It Free for those extra kids but also sometimes you get a bonus of which is I had when I one of my the first employee I hired that wasn't myself was my son that was already covered under my insurance so I didn't have to I could like bring them in I didn't have to deal with insurance for him at all it's like hey you already get insurance so it allowed me to work the cost for his salary and stuff like that now again once he aged out you know once you're 26 you you can't ride that anymore uh which happened to be the same time he had cancer so he was going to be kicked off anyways but it's one of those that then it just turned around and so I did um you know I just had like a stien for him so that he could go do it so I didn't have to build out for my you know my company was small enough I didn't have to go build out like a real insurance plan and instead could bring somebody in and just say hey I'm going to give you a you know basically a stipend or a pum or stuff like that which again is something just the last of the bonus stuff here is if you go outside hustle don't be afraid to look into contractors because you know you can do that as well and so you can maybe get some people to contract up help you out on the hours so that you can still do your day job even to the level I I interviewed a guy a while back and I think we even talked about it on the podcast I don't think it was in the after stuff is it he had a uh testing company QA company he was effectively he was a CEO of his company but he had a real he had like a day job as well he had hired a COO the COO took care of basically everything and so the company just ran itself and he went off and got another job so there's things like that that you can do that um you know feel free and we'll try to get Show links in the show notes back to those things but there's a lot you can do sort of uh essentially double dipping you have a you can have your day job and have a company that's generating money for you as well which is the best of both worlds and that's interesting that you mentioned that so the double dipping part is kind of interesting as well because one of the things we have both run into over the years is we do one thing at work we come up with an idea and that idea can translate into other jobs we can go after for side hustles and spin up that idea and it either becomes an application it becomes a tool or something that we turn around and sell uh so there are ways you can maybe double dip as far as uh ideas and content uh just make sure you don't steal you know company Secrets but I if you're working on like testing all the time and you have a better way of doing testing go do it you know build a better mous strap and I think we're g we'll talk about that but I think I'm going to use that as a cliffhanger for those of you guys and gals that are sitting here watching us um yeah definitely we're going to wrap this one up let's wrap this episode up we may have gone a little bit long I think so I think we did okay on this uh thank you again for watching as always we appreciate you we love you guys coming out here whatever you can do feel free to subscribe tell all your friends your family even people on the street let's you know bring as many people as you want we love to help people out we don't have to do it does not have to be a technical business if it's somebody that's just in a simple startup sometimes that's the best time for them to get some of the kinds of advice that we we have here and we can always uh you we can direct them as needed along the site and all of our various content streams that being said you guys go out there and enjoy the rest of your day and we'll check you out here next time [Music] around
Transcript Segments
[Music]
so uh yeah for those of you joining in
uh obviously we're kicking off yet
another episode series of episodes
things like that we're going to talk
about a couple things today um before we
get into the the podcast thing uh really
just to give you a little heads up we're
going to talk business um building your
business we're going to do a little bit
about
bootstrapping depending on the order of
how these things go out but you're going
to talk we're going this and the next
couple episodes you're see something
about uh bootstrapping and about sort of
like setting uh financial goals so to
figure out where you're going to break
even and uh oh the other thing is a big
one is Clarity and reality like
realistic expectations in dealing with
the customer in setting expectations and
working on the the latest project so
without further Ado we will just go
ahead and Dive Right In on this side you
got like not a whole lot of bonus there
let's see what you get on the other end
of this uh but we'll just go dive right
into it hello and welcome back we are
just cruising right along in our new
season this is actually season 21 of the
podcast and we are getting into sort of
like a little bit of a shift gear if you
haven't you know been around for a
couple episodes we're focusing a little
bit more on sort of like that Mentor
Mastermind kind of stuff that we've done
in the past quite a bit on the YouTube
side now we're going to bring some of
this forward into the podcast side and
just discuss some of the business
problems and and such that we've into as
well as technical problems that we hit
on any given you know day or week uh
first go ahead and uh that's I guess I
should introduce myself in case case we
haven't met I'm Rob Broadhead and one of
the founders of the de develop andur
building better developers uh also a
founder of RB Consulting and do a lot of
of Consulting uh from a it point of view
particularly doing it assessments and
things of that nature my partner on the
other end is Micha malash and I'll let
you introduce yourself yeah thanks Rob
so my name is Michael malash uh I am
also a co-founder of developer ner and I
also am a uh I have my side hustle is
Envision QA where we do a lot of focus
on the QA assessments QA audits for your
software and also help you build the
tools and testing uh cases you need to
actually test your software so I want to
get right into uh because we talked ear
earlier when we were thinking about
things to things we wanted to cover and
you brought up bootstrapping in
particular like bootstrapping your
business so let's let's sort of focus on
that this one is where did you want to
where did you want to go in the
bootstrapping
discussion well we've had a lot of
conversations on this over the years I
mean there was one point what about 10
15 years ago where we were spinning up
businesses and like to test niches to
test ideas and different markets and we
bootstrap things like to the nth degree
right we were doing things for next to
nothing open source all the way but the
bootstrapping what I kind of want to
talk about today or have our discussion
with this is where do we go you know
when you're starting out yes there's a
certain level of bootstrapping you can
do you know like how quickly can you get
to market with the least amount of money
to get up and running for your fixed
cost and your startup costs because you
know you're going to have some type of
setup cost at the beginning get started
but then you're going to have at least
some type of residual fix cost at the
beginning that you have to make sure you
cover or at least have a way of funding
and then the other thing that uh in the
meeting I had last night we talked about
taking it to the next level you know how
when basically when do you define your
break even point when you actually like
get into the black when you actually
start making money when you do you
actually start having a profit and it
brought up some questions that I never
really thought about uh because we have
bootstrapped some things for so long you
just don't think about certain things or
um like if you're running your own
business or a side hustle you might not
think about health insurance because you
might be under your current employer's
health insurance or your wife's health
insurance or your husband's health
insurance and just there were some
things that we had a conversation about
last night that's it's like well crap
you know if you want to quit your day
job and do your side hustle all the time
there's some things you have to think
about going forward that you might just
not think about right now oh definitely
there are uh had actually recent
discussion with another friend of ours
about side hustling and uh in particular
he had a very you he would charge as a
lower rate than he would normally do
from a side hustle because he was like
well I don't really have to like I don't
have to put food on my table you know I
don't have the expenses so I don't feel
like I need to charge as much
however even with a side hustle you
should be you know you should still
charge essentially a fair market rate
which we've talked about in the past
from a from a shifting from side hustle
to day job you know real H real hustle
or day job uh there is a lot that need
that goes into that and it it's a little
different now if you go back just a few
years if you go preco there was a huge
amount of stuff that people needed to
think about because you weren't usually
remote so if you were going to have an
office that was going to be your side
hustle if you need to go to an office
you need to know what that cost was a
lot of people if you needed to go
purchase uh you know internet
connectivity or a laptop or a desktop or
things like that there's all this
there's a huge amount of stuff that when
we work for somebody else and particular
when we work in an office we don't think
about at all it's just it's just not
something because it's just part of the
job but then suddenly and this is what
happened when Co hit a lot of people
were working from home and what they
were doing and for those you can't see I
was air quoting that um they were doing
this and they realized suddenly that I
can't work they were actually doing work
and they're like I can't work eight
hours a day on my at my kitchen table
that's like I've got too much stuff
going on this doesn't work I I can't
think I'm not comfortable all of those
kinds of issues came up or they had like
a you know an old 14 monitor that they
had attached to a desktop that was a I
don't know like a 386 or something was
from decades back that they had to like
hand crank at to start and they're
trying to do work with that and they
just it was fine maybe if all they were
doing was you know browsing the internet
briefly but when they suddenly have to
go to do work with it they didn't have
you know they didn't have what they
needed and that's why you saw a big jump
in like people buying desks for their
home and people upgrading their internet
connections and all of that stuff is the
kinds of things you need to think of
before you step
into that you know take that leap of I'm
going to go from full-time employee to
employing
myself yeah exactly and then you run
into the other thing is when you go from
that or even if you were physically in a
brick and mortar still
are you run into this situation of well
what do I need to start up you know I
have a home computer or do I have a home
computer or do I have a tablet you know
is there something you can
repurpose without using work work
equipment because you don't want to get
yourself in trouble where you're doing
your side hustle on your company laptop
that's kind of a big no no stay away
from that but the the like you said
though you know people went out and they
bought all this but some people don't
some people are just starting out they
they maybe have been through this and
they're like oh okay I want to do
something where would you begin so I
would start simply by just listing the
basics right you know are you writing
software okay you know do you need a
computer you know can you do everything
you need on in a notepad you know
notepads are cheaper than computers um
if you do need a computer okay you're
going to have to have some basic um
business things right you got have a
like we've talked about you know we have
to go maybe get a logo uh figure out
your company name uh you may have to pay
for some basic startup cost at the
beginning but then that's your startup
right so like your domain name your
email your website uh maybe a computer
but that's fixed or that's not fixed but
that's your startup that's a onetime
kind of buy at the beginning and you
don't need to renew it it it's not what
I deem fixed fixed basically means you
have to pay it every month regardless of
what you're making right startup is just
what you have to put in at the beginning
so
I know we've had some different um
business models over the years so I've
been a C Corp so proprietor I've been in
LLC uh currently in LLC about to be
escort so what are some of the things
that you've run into when you've gone
out of startup mode into fix mode now
from a sole proprietorship I can tell
you that you know there's things we can
write off with your taxes you can set up
a physical space for your home office
things like that but that's taxes you
know that's right off at the end as far
as a business cost things that you have
to consider would be like you know do
you need to pay rent like you said you
know do you need to go into an office
but if you can carve out space within
your home uh maybe you can charge
yourself rent but then you have to take
that deduction off like you can't use
that deduction at the end of the year so
it just kind of depends on the different
business years so I'll let you speak to
that for a
moment oh uh there's a lot there so I
think one of the F what I started way
back um this was a long time is I this
is back long enough that people had
phones that you actually plugged into a
wall and things like that so what I did
when I first started out is I was
looking at the idea of eventually
working for myself and so what I would
do is I go into the office and I'd look
around I'd be like all right what do I
have in the office that I don't have at
home and this is before remote work so I
I sort of had to like figure it out a
little bit it wasn't like I was going to
go work from home and go test it out now
that that is the nice thing is now what
you can do is you can actually you know
go work from home if you can if your
work allows it at all or if your side
hustle allows it at all do a work from
home day or a work from a work remote
day and honestly if you're if your
company doesn't allow it take a you know
take a sick day take a day off or
something like that and do just your
side hustle for a day is just say all
right I'm going to go work my side
hustle for a day and I'm going to test
it out I'm going to see how this works
out and it may be you don't get far into
your day before you realize oh I need a
b c and d probably what's going to
happen is you're going to realize that
you can like you can limp along and then
that's where you look at what are my
what is it going to take me to upgrade
to whatever I need to that's like my
Baseline that I want and look at those
costs and you can either figure out
that's where you go through that
decision of do I have the money do I
want to spend the money to do that or am
I going to just like suck it up and
suffer for a while and that's going to
be part of my goal which I've done that
as well where I would adjust my side
hustle stuff and basically be you know
sort of going to this like hey I'm going
to go chase down a project or work for x
amount of money and once I get to that
point that's going into the business
especially from a side hustle you're
basically saying okay I'm loading that
into the business's coffers and once I
get to a certain point now I can go like
buy a laptop or buy a desk or whatever
it happens to be so it's true
bootstrapping where you're going out and
you're doing what you can to generate
work generate
income use that to then sort of like get
you set up as a as more of a real
business I guess as to opposed to a side
hustle because it's easy with a side
hustle to just take that money and just
like you know just turn it into whatever
your favorite little things is it's said
it's a little bit like uh when Tim
Ferris talks about dreamlining and stuff
like that you're just like you go
generate the money and now I'm going to
go a Porsche this is different this is
where like I'm generating this money to
put it into the business and then I'm
going to turn around and use that at
some point to have a launching pad so
that I can move from side hustle to real
hustle and so those are and it you you
go to brought up a good point is you may
not need a desktop or a laptop or a
phone there like depending on what you
have already you may have some of the
the things you need it may be as simple
as maybe you've got like
maybe you've got a phone that basically
is all you need the problem is you don't
want to be typing like that you don't
want to have like thumb you know texting
type stuff you need a keyboard so you
can get full-size keyboards for your
phone I mean there's things like that
you can do so maybe you look at what is
the device you need actually you can
take that phone and you can also cast
its display to a screen so you could use
your phone as a a laptop essentially if
you as a mobile device if you want so I
would want look into that I mean we're
like at the very startup portion of it
like you said the startup cost is figure
out what is it what really do you need
to do your business and then figure out
what do you what would you like to have
to do your business because those things
do you know vary what a good example and
then I'll toss this back to you was
several years ago I'd like I'd had a I'd
had laptops that I'd used over the years
and I was like all right I want to jump
into something new but I really need a
more modern laptop and so what I did was
just basically said okay I priced out
the laptop said this is what I want and
then said all right once I can generate
x amount of you know that amount of
Revenue I'm going to turn around and buy
that laptop and that's the kind of stuff
that yeah you if it's a business if
you've got it set up right then you you
get to write some of that stuff off or
that's a business expense depending on
how all of that accounting stuff works
disclaimer I'm not an accountant I'm not
a tax person talk to your accountant
talk to your tax attorney for whatever
you want to deal with but those things
are the kinds of things you're going to
want to take advantage of as you're
shifting gears and it's why you want
whether it's a side hustle or real
business you want it to be a standalone
its own account everything so the monies
don't cross between your personal stuff
in your business because then it makes
it much easier take that pile from your
business and say all right I'm going to
use that to invest in my
business all right back to you thoughts
on that one since I've otherwise it
becomes basically an expensive Hobby
right because if you don't take the
time so so that's one thing I want to
touch on with what you said and we
really haven't hammered that home yet so
one of the things with starting up even
if you're bootstrapping make sure you
keep accounting of everything you buy
everything you need everything that
you're going to need if you don't this
is just a hobby you're basically going
to spend money on things as you need it
you're not going to be able to write
things up and you're not going to really
be able to claim yourself as a real
business the other thing that was
interesting in that because you brought
up you know using your phone in that a
lot of places that a lot of people don't
consider these days because you know
with the tech boom of covid with
everyone running the Best Buy all the
sales online Amazon you know we still
have Habitat for Humanity we still have
um uh the Salvation Army we still have
uh whatever the other one is I just do a
blank on it um but Goodwill they do have
electronics and you can actually find
some Bluetooth keyboards stuff like that
small stuff that you don't have to spend
50 60 bucks for at a high inflated price
right now just go to your local store
buy a couple broken pieces the other
place I found interesting that my
neighbor turned me on to a couple months
ago was don't forget about pawn shops
you never know what the heck's in a pawn
shop and they turn around and put most
of that stuff on uh eBay so you could
also look at eBay I would stay away from
some of the other ones that are gimmicky
where it's like oh you know Pennies on
it out read the fine line on that one
that one's a little shady you pay like a
penny per bid or a dollar per bid for
something like it's very misleading but
there are things you can do though cheap
also don't forget yard sales I mean if
you happen to have the time go check out
yard sales the other thing to think
about too is what do you need to just
get off the ground so like for us being
electon companies we can quickly go spin
up a website Amazon gives you one free
year quote free uh they've tweaked a
little bit but you can pretty much get a
Year's worth of web hosting for maybe 15
bucks for the year and then you add a
domain name on top of that for about 10
bucks a year so you're still under about
50 under 100 bucks just to get out there
then throw an email you know there's
things that stack up so as you see I'm
building a list of things that come to
mind as I'm walking through
don't go out and just start buying
things that you think you need take it a
second take a step back now I know I'm
going to segue a little bit but take a
second and look at your target market
look at your side hustle who are your
customers who are you trying to reach
where's the work coming from see if you
can double down on that with marketing
or just you know maybe do social media
there's things you can kind of work in
for free that take time but you can't
discount your time you need to also
account for your time and that was
something else that was in the
conversation yesterday uh you know with
doing these side hustles you know it's
like oh cool you know my expenses are
like a 100 bucks a month so I can just
go do a couple jobs a month you know all
is good well you can't qu your day job
for that right because your day job
you're getting paid a salary you have to
actually break that down into all right
what are you really making an
hour and then what I found out yesterday
is oh if you're going to be your own
employer what do you have to pay in
Medicare taxes what do you have to pay
in payroll taxes what do you have to pay
in health insurance cost and it was like
oh suddenly my hourly rate just went up
uh little bit to see to kind of
supplement that because you're not
thinking that way at the end of the
day yeah I think and we this is going to
definitely be a a two-parter so I do
want to sort of wrap touch that wrap
that piece up and then I want we'll you
know sort of step into or we'll set the
table for the next episode um yeah
typically you need to add about 20% on
top of whatever your salary is and
that's what you really it really costs
you so if you're making $50,000 a year
because this is easy math it costs the
company basically $60,000 a year for you
now that can vary based on benefits and
things like that it but and that's not
like that's not like a Cadillac healthc
care plan or anything like that's like
just basic stuff
but having done this several times over
the over the now decades uh there's some
things that I think people are very
scared about that they don't need to be
because they there is there are
solutions healthc care is one of them
because yeah you have you know the taxes
it's like death it's there it's except
for you see it far more often if you you
die once you get taxed a billion times
but you know you have to do that you
have to have Medicare you have social
security you're GNA have to pay you yes
you pay it right now but there's this
thing called the employer share that
when you employ yourself you get to pay
that part too so you know don't you
suddenly the the rich guy that's
sticking it to you you're the guy and
you're realizing that they're not really
sticking it to you but with healthc care
is one that a lot of people worry about
I don't you know I need Healthcare I
have to have Vision Care I have to have
dental I have to have this and that and
the other that stuff does exist you can
go out there you can find places that
whether they're a co-op there are uh
burden sharing type situations and then
you can also go get plans that are Solo
plans it's not that bad there's also
ways that you can deal with it
especially now because of uh
catastrophic you can have like
catastrophic coverage which is basically
if you're already pre-existing
conditions that kind of stuff there are
ways to deal with that and I'm talking
like from specifics I've done it with a
family of of multiple kids I've done it
when I've done it I've had it dealt with
it multiple times where you've got
somebody that is a cancer survivor that
is a you know automatically nixed from a
lot of insurance coverage there's all
sorts of things like that that you can
look into you can look into you can even
add like if you want to have a 401k if
you want to have a Roth or IRA or all
that kind ofu those things all can exist
outside of a company you just have to
figure out what you're willing to pay
and realize that that you are going to
pay it's now something that you don't
have to worry
about uh one last one and then we'll and
then I'll toss it to you was just time
one thing that and I think I W we'll
kick this into the next episode but is
the idea of like holidays and vacation
days those become very different when
you go into working for yourself so I
want to let you sort of get the last
word on this one so I'm GNA go back to
your previous one real quick with the
insurance the other thing too with you
starting out with the side hustle going
into business for yourself whatever if
you have a spouse that is employed and
you can get health insurance through
them until you have to actually hire
employees or you're make enough that you
can basically supplement and your wife
can or spouse can
retire piggy back off of that look at
ways where you don't have to add on
additional costs see what you can
shortcut there'll be bonuses because
we're going to wrap the podcast up but
I'm going to talk a little bit more on
the video side of this on the YouTube
side so a little bonus content there uh
as far as podcast is concerned though
we're going to wrap this one up I want
to thank you again for listening to us
and for as always just an email at info
developer.com let us know if you have
any questions comments suggestions
topics you'd like us to cover questions
those kinds of things because that's
what do we we solve this for each other
but we also are more than for you guys
for our customers and whoever else is
out there that being said we'll let you
get back to your day so go out there and
have yourself a great day a great week
and we will talk to you next time the
rest of you are still here so next time
is right now I want to talk about the
last thing you said and I just forgot it
it was about oh spouse and
stuff this is where it
gets again I'm not an insurance expert
but there is a lot of stuff that you can
do there one and I've known a lot of
people that have their side hustle they
have been basically they're covered by
their spouse so they don't have to worry
about insurance and that takes suddenly
that takes a lot off of your plate also
depending on what your insurance plan is
depending on where your company is and
stuff like that sometimes you get like
and I've learned this is that sometimes
you can get people essentially covered
for free because you can get a family
plan that has the same cost whether you
have one two three four kids and it all
counts the same as opposed and so you
sort of Get It Free for those extra kids
but also sometimes you get a bonus of
which is I had when I one of my the
first employee I hired that wasn't
myself was my son that was already
covered under my insurance so I didn't
have to I could like bring them in I
didn't have to deal with insurance for
him at all it's like hey you already get
insurance so it allowed me to work the
cost for his salary and stuff like that
now again once he aged out you know once
you're 26 you you can't ride that
anymore uh which happened to be the same
time he had cancer so he was going to be
kicked off anyways but it's one of those
that then it just turned around and so I
did um you know I just had like a stien
for him so that he could go do it so I
didn't have to build out for my you know
my company was small enough I didn't
have to go build out like a real
insurance plan and instead could bring
somebody in and just say hey I'm going
to give you a you know basically a
stipend or a pum or stuff like that
which again is something just the last
of the bonus stuff here is
if you go outside hustle don't be afraid
to look into contractors because you
know you can do that as well and so you
can maybe get some people to contract up
help you out on the hours so that you
can still do your day job even to the
level I I interviewed a guy a while back
and I think we even talked about it on
the podcast I don't think it was in the
after stuff is it he had a uh testing
company QA
company he was effectively he was a CEO
of his company but he had a real he had
like a day job as well he had hired a
COO the COO took care of basically
everything and so the company just ran
itself and he went off and got another
job so there's things like that that you
can do that um you know feel free and
we'll try to get Show links in the show
notes back to those things but there's a
lot you can do sort of uh essentially
double dipping you have a you can have
your day job and have a company that's
generating money for you as well which
is the best of both
worlds and that's interesting that you
mentioned that so the double dipping
part is kind of interesting as well
because one of the things we have both
run into over the years is we do one
thing at work we come up with an idea
and that idea can translate into other
jobs we can go after for side hustles
and spin up that idea and it either
becomes an application it becomes a tool
or something that we turn around and
sell uh so there are ways you can maybe
double dip as far as uh ideas and
content uh just make sure you don't
steal you know company Secrets but I if
you're working on like testing all the
time and you have a better way of doing
testing go do it you know build a better
mous
strap and I think we're g we'll talk
about that but I think I'm going to use
that as a cliffhanger for those of you
guys and gals that are sitting here
watching us um yeah definitely we're
going to wrap this one up let's wrap
this episode up we may have gone a
little bit long I think so I think we
did okay on this uh thank you again for
watching as always we appreciate you we
love you guys coming out here whatever
you can do feel free to subscribe tell
all your friends your family even people
on the street let's you know bring as
many people as you want we love to help
people out we don't have to do it does
not have to be a technical business if
it's somebody that's just in a simple
startup sometimes that's the best time
for them to get some of the kinds of
advice that we we have here and we can
always uh you we can direct them as
needed along the site and all of our
various content streams that being said
you guys go out there and enjoy the rest
of your day
and we'll check you out here next time
[Music]
around