Speaker 1: Welcome to the Master of the NEC podcast, the ultimate
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a season electrician, an eager apprentice, or just someone who
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Speaker 2: Join your host, Paul.
Speaker 1: Abernavi, a true authority in the industry with over thirty
eight years of trade experience, as he electrifies your mind
with in depth discussions, expertips, and valuable ensights that.
Speaker 2: Will keep you ahead of the curve.
Speaker 1: Each episode, Paul will illuminate the complexities of the trade,
decode the national electrical code, and share the latest industry trends,
all while empowering you to take your electrical career to
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ready to supercharge your knowledge because with the Master of
the NEEZ podcast, the power is in your hands.
Speaker 2: Now get ready. Here is your host, Paul Abernavi. What Up,
What Up? What up? Everybody? Welcome to another episode of
Master the NEEC podcast, where we talk about all things electrical,
electrical topics, construction, electrical kind of electrical driven construction. Because again,
I don't want to go out of my area of expertise.
But that's what we're doing here on Master the NEC podcast. Today.
I've got a great episode for you we're going to
talk about in the title. You know, I thought about
the title for this episode, and I came to the
conclusion that this title is kind of a reality check
for many people. And you know, I'm positive about always
wanting people to strive in their business and take their
business to the next level and all those great things,
and that's all great, but sometimes and I get calls
from contractors all the time that are starting in business
and they're struggling and they're just not getting the clients
and and yen, the cost of doing business is expensive.
And then they start asking me things like well do
I get into those like Angie's lists and all those
other things, And I say, look, we need to do
a quick reality check. So that's what we're going to
kind of do today. So again, don't let this topic
run you off if you're in your business and you're
new into the business. Again, I am very positive about
businesses and running our business and pushing our business forward.
But today's title is when the Dream needs a day job,
turning a failed business into a side hustle. Now, I'm
sure many of you have probably heard the term side hustle,
and side hustle typically is when you have a business
or you do something on the side that supplements what
your day job is, which you're nine to five. And
there's a lot of people that their side hustle it
makes as much or more than what their day job does.
But that's the side hustle. That's just extra money that
adds together. So side hustles can be great for lots
of people out there who do something and say electrical
and they could do a little side stuff. Now, side
hustles can be all kinds of things to bring in
some extra money. It doesn't even need to be in
what you do. I mean, I know people my brother
for example, one of my brothers who who works for
sporting goods firm, but his side hustle is that he
does customs shirts t shirts for sporting events like softball games,
baseball games, you know, big tournaments that they have around
the country are well not country around Virginia. And he'll
go to these events, set up and sell shirts with
the logo on it from the event. So it's a
commemorative thing that the kids and their parents, and people
buy and take home to remember that event they went to. Right,
So that's a that's a great side hustle for him,
and that's what he does. It's it doesn't take the
place of his nine to five, but it's just it's
a great additional income. Now, a couple of things that
we need to do here is kind of some opening
questions that we need to you know, the elephant in
the room type of thing. Say so, number one, at
what point does a business stop being a startup phase
and start becoming financial self you know, and instead it
starts becoming a financial self destruction mechanism. Okay, at some
point we start a business, we push hard and we
keep going. And it's in that startup phase where you
hear other people and me have told you, and you'll
see other financial people that do this will say that
you need to probably have two to three times an
annual salary to start a business in order to be
able to sustain that business through the startup phase. But again,
at some point there has to be an end to
the startup phase, whether it's six months in it, three months,
send it, a year in whatever your finances allow. Okay,
number two, how do you know the difference between pushing
through hard times and simply just refusing to accept reality. Okay,
we're gonna talk a little bit about that today, because
again I can I can give you a real example
of somebody and I can even give you kind of
example of my son and in his business starting up
his business as pool business, not electrically related. But again
I can kind of tell you kind of how I'm
coaching him in this process, so it can help you
learn because I give him advice all the time on
business and how to do things, and so it may
be helpful to you. The next question is is it
possible that the smartest business decision you can actually make
when you're trying to start a business is to simply
get a full time job and put that business on
the burner, or move it from a business where you
really giving it your nine to five and we all
know electricians it's never a nine to five. But now
you move it more to a side hustle where it's
evenings and weekends, and you know, as you have available,
you know there is a point in time where you
have you're gonna have to make those decisions. Next Again,
some of the Again, the opening things to talk about
today is why do so many entrepreneurs treat the idea
of getting a job like its failure. I think that's
the number one thing that you know, even talking with
my son and talking with other people and other contractors
who I've talked to and helped mentor through the years,
somehow it seems like it's failure. Right if you didn't
get this business started, you didn't start making a bunch
of money or enough money to pay yourself a living wage,
and you feel like a like you've failed, and reality
it's it may not be failure. It just may be
a situation in the job, the outlook, the economy, what
you're doing, Maybe the demand in the area you're doing
is just not ready for what you're doing, or maybe
it's oversaturation, even though you may be the best in
the world, but people are fickle, right, And you know,
it may be just a casualty of where you're at
and what you're doing. The business that you're choosing to do, okay,
But when a business idea okay, getting a full time job,
and when the entrepreneur, you know, it feels like if
I get that job and I move this idea of
what I want to do for my life to a
side hustle. They feel like it's a failure. The business
didn't go away, right, it's just moved to the side,
and you still work it. You still put in the hours.
You're going to be you know, burning candles at the
both ends. But you're still there. You still have that dream, okay.
And of course is pride the biggest reason people don't
keep that. People keep pouring money into a dying business.
And this is a conversation that that, unfortunately, you have
to have with some people in business. I know people
that have gone for years and never made any money.
I've had businesses where I poured money into it trying
to get it off the ground, and it just would
not take. You know, I've been doing this for many
many years. I didn't just start, you know, in the
business of of what I do yesterday. Right. So I'm
just giving you some thoughts and how I mentor other
tradesmen and people they call me that are on my
mentor program. All right. So with that said, we do
have to think about those things, and those are the
elephants in the room. And in telling you you're not
a failure, side hustles. Still a business, still got account
for that income, still have to pay your taxes. It's
just moves from primary to a side because you need
to be pulling in that W two. It doesn't mean
you failed. It just means that the roadmap to success
is drawn out a little longer. But you're not draining
everybody you love and and everybody else that may be
helping use finances down while you're trying to strive for
this dream that's not yet achieving what you'd like it
to be. You can offset that loss by getting a
job somewhere in at least getting a W two so
you can contribute to this so that you're not just
a burden on somebody else. Okay, now there are some
reality check questions that we have to think about. So
if your business hasn't paid you in a year, it
is really a business? Is it really a business or
just an expensive hobby. That's something that I think people
are in love with saying they own a business. Now
I can tell you as owning a business that has
never been the highlight of me my career. Right, being
a master electrician, being a dreatmman, those are highlights. Owning
the business has never been a highlight. It's something to
strive for, but it's never because once you own the business,
now you're responsible for taxes and you're responsible for the
bookkeeping in receipts, in all this stuff that you have
to do as a business owner, and make sure you
meet certain deadlines. And there's no slap on the wrist.
I mean, if you don't meet certain deadlines. For example,
if you owe taxes that come if you're a corporation
to say, you know a March fifteenth, if you don't
typically if you're Chapter S or something like that or c.
You owe money, you owe it, even if you file
an extensions something like personal taxes. If April fifteen rolls
around and you were self employed, it's so proprior and
you owe tax money. Maybe you're a ten ninety nine
guy or gal and you owe money, you still owe it.
Even if you were to file an extension on your
taxes to October, you still owe the money to the irs.
You still owe it. If you don't pay it, you're
gonna get penalized. And again, I'm not a tax consultant.
I'm not giving tax advice. I'm just telling you the facts.
If you still owe the money. The deadline for individuals
is April fifteenth. You still owe it. You got to
pay it. You could still file an extension, but you
still got to pay the money. Okay, electronic transfer or
whatever put the money in there, you still got to
do it. Okay, So important things to realize. But at
some point, the reality is if you haven't paid yourself
and you're losing money and you're sucking money from family
members and other people, you're taking loans out on cards,
and you're just not making any money. You're not getting
clients and you're losing money. That's not why you win
in business, by the way, So if you're not making
any money, you have to set yourself a realistic timeline
based on what you can afford to risk. Because you know,
owning a business is a risk, but there's really there's
a lot of reward, but there's risk. Okay, so you
have to you have to understand that and you have
to remember that, right so if you get you know,
for me, I usually tell people six months if you
don't have a couple clients or you're not starting to
establish a full hold in six months, and you're very
aggressive and I'm not talking about paying for pay per
click ads like the Angie's Lists and all those kind
of that. That's garbage, right because everybody's getting those links
and you're all fighting for price. The only one that's
winning is the Angie's List and the other you know
whatever those other ones are that are making money off
those leads. They're the only one that's winning. So I
don't recommend doing that type of crap. I recommend you well,
I have a whole other episode on things that I
recommend you do as a business to get started, but
that is not what I recommend you using those services. Okay, So,
but at some point you're going to have to make
the realization is this really a business or is it
just a hobby? And as hard as that may seem
for some people to grab onto, sometimes hobbies are expensive
in businesses. You gotta let go. I'm just saying you
can keep it as a hobby and hope that someday
that side hustle hobby business turns into a full fledged
business down the road based on all the efforts you're
doing in the hobby. You get what I'm saying. Okay,
So that's a reality that people have to come to.
You have to set your realization and it's a tough
pill to swallow because you got an electrical contractor, let's
say he goes out in business six months into it.
Just money is leaking out like a sieve. It's just
you have to make that decision to say, you know what,
I'm not getting rid of the company. I'm just gonna
push it to a side hustle. I'll do weekends and
evenings and whenever I can get the time. But I
need to work for somebody else and make some money.
That's reality. That's where we are in the world. Now.
How many months of losses should someone realistically tolerate before
doing this reassessment of the business. My belief is six
to eight months. Write about six months if you do
it right and use marketing on Facebook and you're putting
your ads and you're running your ads, and you're doing
follow ups, and you're doing next door and you're doing
you get your Google listing, you get your Being listing,
you get your Yelp listing, you're doing all these type
of things and you're really working it that way, not
that pay for link crap. If you're really working that
if you're going out and beaten the streets. You're giving
out business cards, you're doing flyers, you're using uh, let's
say Google Earth. If you're pool business like my son
looking for pools in the area, using Google Maps, things
like that or Google Earth and kind of because they'll
give you addresses on that in honing in on where
to go, drop and make visits and really hustle. You
got to work a business that old say, and you
build it and they will come. That's bullshit. That's total bullshit.
And if people say, no, I've made it happen, No,
you didn't. What you did is you had somebody give
you a turn key or you had somebody says, look,
if you go into business, I'll give you the business.
That is not the same as starting a business from
scratch and having nothing. Okay, don't fool yourself. It's a
big difference. I'm not saying it's not nice to have
that bump, because it is nice. Yeah, I'd like to
always in business, you'd like to have that bump. But
let's be real. Now, if your spouse or family are
the ones that are financially supporting your business, the question
you really have to ask yourself, are you really running
a business again or is it just a hobby that
is sucking your family dry? And there's nothing worse than
destroying a family is financials. Again, we tell people all
the time, politics, religion, and financial discussions are the number
one things that ruin families. Okay, financial is the worst,
the worst. And so you know, you can't blame your
family if they cut you off. You can't blame if
people won't talk to you in your family because you
did it. They're not in business. You're in business. Hell,
at least you should be thankful they loved you enough
that they're going to contribute to the business in the
hopes that you succeed. But if you redo a reassessment
and it needs to be moved to a side hustle,
then you'll be taking less money from family, less money
from people that's financially supporting you, and you're able to
work and support your family. You get what I'm saying is,
don't be upset at the family or the spouse or
the other people, because you know what, it's normal. They
don't have the same dream as you, but they do
dream for your success, right, so it's important that you
evaluate that and understand it. If you have to move
something to a side hustle and go back. It's not
a shame, it's okay. It's fine. Your business didn't go anywhere.
It's just you're not dedicated eating the same amount of
time to it because you need to work in a
regular job. Now here's the deal. When you start borrowing
money from family to keep a business alive, it already's
crossed the line. Now I'll give you example for my son. So,
my son's in a pool business. I'm financially supporting him
in his effort to build a pool business. Y'all know
the history there. I love him, I want to see
him succeed. I'll do everything I can to try to
help him succeed. But he's in an area where there's
just not a lot of pools. It's not like you're
in Texas anymore. And you're in Virginia, Central Virginia, so
it's feast or famine, and there's already some established pool
cleaning and servicing maintenance folks. So it's going to be
a tough haul for him, but I want him to succeed.
I've created all kinds of tools to help him succeed.
He's got to get out there and do the lea work,
lead work. But six months comes in middle pool season
come June July. If he doesn't have some established clientele
that he's doing weekly, then we're gonna have to have
a serious conversation. I'm not saying get rid of the business.
I'm just saying, now it becomes a side hustle and
you need to get a full time job somewhere and
don't give up on your dream. It's just it right now.
You can't keep taking from your family. You need to
be self sufficient for your family. Okay, because he's got
a child and a wife and what you get what
I'm saying. So these are real realities if anybody out
there that's listening that are dealing with that same situation.
You want to help somebody succeed, but there's only so much.
Pockets are only so deep, you get what I'm saying.
But at the point where you're taking money from family,
unless the family's the one that's funding your effort for
a while, then at that point do you really have
a business that type of scenario. Now, I guess the
other reality check question, and is there a point where
continuing a failing business venture becomes irresponsible to your family. Yes,
these are supposed to be people you love, right, So
if you take money from family yet you're losing it,
then you're losing and they're losing. And why should they
lose money? Why should they worked hard for that dollar
and you're just taking it in a failing venture. The
smartest thing you can do is step back and say,
you know what, Hey, this isn't working the way I
wanted it. I'm going to find a job. I'll do
anything to feed my family. Okay, I'll shovel crap if
that feeds my family. But I'm not giving up on
my dream. I'm just putting it on the side here
and working it at my available time. I need to
focus on making money. That doesn't mean I give up
on the dream that's so important. And I just don't
want people to take away from this giving up on
the dream because you're not. Okay, you're not. I guess
the next step that we logically have to talk about
is the ego thing very much driven in men than
it is women, this ego thing versus reality. I guess
the questions in the room are, why do entrepreneurs sometimes
confuse stubbornness with determination? There's a difference. Being determined to
do something and putting all of your efforts into it
are so much different than doing it when you know
it's a failed effort. The way you're doing it and
not admitting that it's time to shift gears, that's stubbornness.
That is not dedication. Big difference. Next, ego versus reality check.
Is quitting the wrong business actually a smart entrepreneurial move. Yes,
if you're trying to do a business and it's not successful,
then you cut it. I'll give you example. Many years ago,
many people know I owned a boarding kennel, grooming and
boarding facility. My wife ran it. I had the electrical
contracting and everything out of it, and engineering design assistance
and all this kind of stuff. And I traveled around
the country teaching for eaton cutler hammer and all this
kind of stuff. And we started a business out of
the kennel, and that business was spraying for fleas and
ticks in an area where there was a lot of
places and ticks. So we had all the equipment. We'd
go out, we'd fum a gate and fog a yard
and do follow up visits. And you know, it was
a big deal because you know, fleet fleas ticks, and
we were in an area in Virginia over in the valley,
over in the Shenandoah Valley that was very prone for this.
We thought it was a great idea. We did some homes,
they loved it, but as much as we advertised it,
it just didn't gener And we had a kennel, so
we had an everyday source of customers coming in business,
coming for the grooming and the boarding. You know, people
just they just didn't wouldn't do it, and so at
some point we had to say that's it. Cut that business,
that subsidiary. It would just cut it and just get
rid of it. Another example of that is I had
a business years ago. You can still google it online.
Radio pet I helped. I was one of the original
designs in part of the development of underground pet fences
and some features and technologies, and I had a partnership
with the company out of Ireland and we were doing
probably overall a couple million a year. Back then. It
was doing great. We had money in the bank. Everything
was going good. And it was not a side hustle.
It was a legitimate division of Canine Canine what was it,
Canine groom In Incorporated was our corporation, so it was
a division of that. It was doing amazingly well. Then
all of a sudden we had a disagreement. I couldn't
get access to components to fixed units. And they were
in Ireland, we were in the US. And at some
point I had committed to advertising nearly a million dollars
worth of advertising that I had committed to because I
thought we had a partnership, a handshake deal. Well, they
screwed me, and guess what I had to eat that
and I ended up paying nearly a million dollars to
buy off the contracts because they wouldn't let me out
of these contracts I signed where my partner said, please
go ahead and sign these. We're a partner, we handshake.
Never do a handshake, hey, just especially if it's any
significant amount of money. Get it on paper. Today it's
so easy to have a contract with CHET GTP or
anything like that. It's don't do it. The handshakes don't work.
It always come back to bite you in the ass.
But I was young and I did it, and anyway
it ruined it. So what was the smart move? Smart
move was to close that damn business. And that's what
I did. That was the smart move. I owned the trademarks.
I could have gone to China and had it made
and continued it in the US because I had rights
in the US and Canada. But I did the cost
analysis and looked at it and looked at the competition.
At the time, you had competition was you had pet stop,
dog watch, pet fence, no tech, invisible fence. God, there
was just those of them. And I was like, dude,
is I'm competing against companies like Radio Systems Corporation that
were mega giants, right, So it's just what was the
What would be the point? I would just be hemorrhaging
money at this point. So I shut it down, very lucrative,
shut it down, great margins in that business. Sometimes you
have to make those decisions. Does that mean I'm a failure,
Absolutely not. It just means I'm smart. I took the
right decision. I made what I made. I lost what
I lost. I licked to my wounds, and I kept
going because as a subsidiary, I did not want it
to affect the main corporation. So I had to sever
it where necessary in order to keep my main corporation,
which had the Kennel had the building, the property, the land,
everything else, the electrical all was wrapped up into one.
I had to do that to keep it from hemorrhagy. Okay, Now,
how much of an entrepreneurship is about knowing when to
pivot or pause. Some of the best entrepreneurs in the world,
and not just because they start a business, but they
understand when to paul something, move it to a side hustle,
or pivot from it into something else. Okay, there's so
many people out there that are listening to this podcast
that work for somebody who think they know what they're
talking about. Those Facebook group folks that'll say I know
what I'm talking about. You don't know shit. You really don't.
So you can't wear the same shoes at somebody like
me who's had three corporations, built businesses, sold businesses, transitioned businesses,
moved businesses from one state to another. You can't relate
to that. But you business owners out there can relate
to it. Not some whack job out there on social
media who wants to talk about what they would do
if they had a business, or what they do on
the side. That's not a business to them. Okay, they
work nine to five for somebody else. Stop calling yourself
a business. Now. If you have a side hustle and
it was a business that you transitioned and all you
did was micro size it, you steal a business. That's
not the same as me working for some nine to
five and then somebody calls me and asks me to
come wire their basement. That's not a business. Yes, it's
a side hustle, but that's not a business that you
put on the side. I'm hoping you can under stand
the difference in the two. For all those haters out
there who will say something smart ass about it, you're
not in business. You have no idea. If you've never
paid taxes, okay, if you've never paid payroll, you've never
done any of that, then you've never been in business.
So don't don't try to lie to yourself. Okay, don't
fool yourself. The best entrepreneurs in the world know how
to pivot or pause or transition. Now do social media
success stories make people feel like they must grind forward
even when it's not working. So that's another big thing
that I see all the time is it's kind of
like Facebook and people you went to school with, right
how many times have you seen something on social media
from somebody you know and their life just looks so perfect? Right?
Every post they post is them with their kids or
their family, and it's like you look, you go, I
wish I wish I had that life, right, you know,
you look at it and go, oh, oh that's what
I want. But see, you don't see the behind the
scenes they only post. Nobody wants to post the negative
side of life on social media. It's always the positive side,
and that's fine. Reality is, everybody's got demons, everybody's got troubles,
everybody's got issues. They just don't want them to be
the forefront. And then there's some of us who share
our shit twenty four to seven. It doesn't matter. The
reality is you can't believe a damn thing you read
on social media. You can't believe anything that's said there
because it's it's combed through, it's cultured. It's not reality, right,
So people that go on there. I saw a social
media pick with a guy goes I got sixteen million
views on this video. We went viral and I made
this this this, and I'll show you how. And then
you go look at his profile and he's got five followers.
He's got five. Really, that's the reality you're in. He's
full of shit, and he was just doing it for
clicks because that's what they do. That's how they make
their money. Okay, and that says influencer shit. Did y'all
know how I feel about it? Okay? But but but
let's go beyond that. We're talking about your business. So
I've seen businesses that post on the social media's Facebook, Instagram,
all of them like they're just killing it, dude, They're
doing so much business. But in reality, they're they're they're
they're leaking, like a rusted out World War two ship
sitting at Pearl Harbor. Okay, is it's not it's it's
what the face they put is not the reality. You
get what I'm saying. Okay, So now let's talk about
the positives. What can I offer you? Okay? I took
all this time, like twenty nine minutes to get to
what we can talk about. So let's talk about side
hustle strategies and answer some questions. First, why is running
a struggling business. Turning a struggling business into a side
hustle often the smartest move? Well, because you get to
focus on the time that's dedicated to that side hustle
as a business. In other words, if I have Mondays,
and if I have Sundays and Saturdays available in evenings,
then I get to perfectly tailor my schedule to things
that I might get from you know, small jobs here
there into this side hustle mentality, and it allows me
to be more focused because my Monday through Friday nine
to five grind is where I have to come in
and punch the clock. But that side hustle is more manageable, Okay,
rather than having one or two jobs in a week
and you're barely making it. You got an income coming
in in a w two, but you got one or
two jobs that you're doing as a side hustle becomes
in addition to your weekly pay. That's a beautiful thing.
That's exactly what a side hustle is all about. Now,
if it blows up and you like, dude, I can't
handle it. I'm getting fifteen twenty thirty job forty, then
you can transition back to being at your full time job.
Nothing says you can't go back to doing it full time.
I think that's where people they feel like reducing it
to a side hustle is a failure. Next, what are
the advantages of building a business while working at a
stable job. Because you're making money, you're not leeching off
of other people, You're able to start paying your bills,
be up on time. But your side hustle has advantages, folks,
because it's still a business. Guess what, You still get
to write off things. Yeah, yeah, you still get to
write off the gas, anything you might buy. For that
side hustle. You still are gathering expenses. So's there's business advantages.
Okay to having that side hustle. There are advantages, and
you're spending less time in it, and so time is money,
money is labor, and it all translates to being much
more efficient for that business. That still doesn't mean you
can't take ten minutes to send emails. It doesn't take
ten minutes to send out email flyers to a newsletter.
When you're in a neighborhood, you're doing a business, and
you're on lunch break, you can start handing out some
cards in the neighborhood. You get what I'm saying. It
just causes you to focus a little better. You didn't
get rid of the business. You're just refocusing. Now, how
does having steady income actually help a business grow smarter?
Because you're not taking from other people, You're meeting your expenses,
you're working a nine to five, you're getting a W two.
That money goes in your savings account. That's the money
that you use to help build your business. And if
you buy something for your business, you're still going to
get to write it off. Do you get what I'm saying,
don't give up on the dream, just reshift your thought process. Now,
why do many successful businesses start as a side hustle
rather than the full time venture. I'm gonna tell you
how this works. I know many contractors who work for
somebody else but started a side hustle, made some connections,
started doing a lot of work on the side, and
the next thing you know, they're so overwhelmed that they
had to make it their full time job because they
couldn't meet the demands of a side hustle. And in fact,
your daytime job Monday through Friday, started getting in the
way of your side hustle, and your side hustle starts
making you more money than your day job. It's time
to shift. Does that mean that you never go back
to a day job working for somebody. No, it's always
on the table. Hey, is this no shame in my game?
I'll go back to it. I'll do whatever it takes
to feed my family. Dude. If y'all haven't figured that
out by now, that I'm always creating stuff that I'm
very entrepreneurial. I'll do what I got to do to
feed my family. If that means I got to go
to work for somebody and dig ditches or shovel dog shit,
I'm gonna do it. If I've got to put food
on my plate to feed my family, I'm not so
you know, I can be humble that very easily. Okay.
If you have a misconception about me, you need to
get over it because I do what I need to
do to feed my family. Okay, remember that, all right?
What else here? Okay? Next? Is it better to grow
slowly with stability rather than focus growth with debt? Absolutely.
Building it as a side hustle business allows you to
put less money in it and be more focused on
what I call gorilla marketing techniques to grow your business
while you're still pulling a paycheck and putting money in
the bank and paying your obligations and bills doesn't do
you any good to start a business, and the next
thing you know, your personal finances go to shit, or
your family relationships or people that invest or help you,
the relationships go to shit. I had one time somebody
I lent them five hundred dollars for something. They bug
the shit out of me. The people were ignoring as hell.
They weren't family with somebody I know, A friend of
mine bug the shit out of me for five hundred dollars,
so so much so that I was so tired to
see his number pop up on the phone. Finally I
gave him that five hundred dollars. I said, well, okay,
well I expect you to pay me back in two weeks.
I never have heard from that friend again. Now you
might say, well, I'm gonna go out and try to
get that five hundred dollars back, but I'm gonna be
honest with you. It's the best day of five hundred
dollars I've ever spent because that wasn't a friend. That
was a moocher. And if it cost me five hundred
dollars to make that bastard go away, guess what I
came out ahead, because now I don't see him popping
up on my phone. He's not texting me because he's
running from me because he don't have the five hundred dollars.
Do you get what I'm saying. I'm laying down some
reality for you. Hopefully you get it all right. Now,
let's talk about financial responsibility here as a business. Now
what financial signals tell you? It's time to stop treating
something like it's a full time business when you can't.
When you're taking money from family and you're not more
is going out than's coming in, and your bills are
still there and you're not able to pay them without
reaching your hand out for somebody else to help you
because you've got no savings. Unless you're doing a situation
where somebody's helping you for six months and then they say,
after six months, if you haven't established this thing, then
I can't help you. Right then, it's time to realize
the reality. This is not a business. You keep it
as a side hustle, but you get a job. Job,
that's the word of the day. Job. Next, should every
entrepreneur set up a financial kill switch before starting a business?
You know what that means, and you've heard me talk
about this. The financial kill switch is what is the
situation When you're in business. You track everything, your mileage,
your expenses, whatever, there's a number. Now, if you have
somebody that's helping you, they're going to set that number
for you. I've set this number for my son. He
has almost he's getting close to reaching it, but he
hasn't got to it yet. When you get to that
point and you don't have a business and you don't
have what I call a business, don't have clients that
are regularly under contract in his case for pools, and
it could be electrical, it could be whatever. You don't
have a reoccurring contract or something with somebody getting business
coming in, then you get that financial kill switch. Now,
in the past, I say just cut the cord and
just go back to work somewhere. But you know, in
the vein of the side hustle mentality, and I don't
want people to give up on a dream. That's you
got to determine financially when your savings are depleted or
when you have enough money, Like I put twenty thousand
the side to this business, and I've depleted it all
and I don't have anything to show for it. That's
your kill switch. Do you just shut the business down? Well,
I wouldn't. I would just move it to a side
hustle and kind of put it on cruise control while
I'm working a full time job. And then that way,
if somebody happens to read out reach out to you
and say hey, I want you to wire this house
or this basement or whatever, you can say, good, I
got it on weekends. They don't care when you do
it at your side hustle. But it's still a business
as far as they're concerned, they're paying you. It's a business.
They didn't matter what you call it. I just don't
want the word side hustle to be a negative because
it's not. Dude, I've done a lot of side hustles
in my career, and they've all, you know, I've been
happy with most of them. I can say, I can
say all of them, but most of them. Next, should
every entrepreneur know? Should how much savings should someone realistically
have before they try a full time with a startup.
I typically say, if you're going to do it on
your own, that you need to have what you expect
your salary to be. Let's say twenty five thousand years respectable,
and people say I can't live on that, then you
need to reevaluate your means. I'm just saying if you
work somewhere and you're making six figures or whatnot, and
you're saying, I'm going into business. I can't make twenty
five I got to make one hundred and fifty thousand dollars,
then dude, you need to stay where the hell you're at.
Because if you're going to live at that lifestyle and
you want to start a business, I don't want to
discourage you, but I'm going to tell you you need
to have two to three times your annual salary for
that business. So if you're currently making one hundred and
fifty thousand dollars a year, you need to have three
hundred thousand dollars in savings to start your business venture
because you got nothing coming in now. The good thing
about a side hustle is you keep your job and
you can start that side hustle and you don't have
that same amount of full startup expense. You start what
I call gririlla marketing and you move slowly into contracting.
Business insurance general liability is not expensive. Business licenses are
not expensive. Some counties don't even require business licenses. Louisa
County for example. In Virginia, they don't have a business license.
You work out of your home, you got to get
a permit for that. But if you work out your truck,
little gray area there, right, So you know, and again
I'm not giving legal advice. I'm not giving tax advice.
I gotta make it clear because there's be some smart
ass that'll say that, but I'm not. I'm just talking reality, folks. Reality.
So yeah, so that's just things that you have to
think about, Okay. In business, so I typically say two
times your salary is what you should have as your startup. Okay,
it's taking money from family to support a feeling business
ever justified? Yes, you got to remember it takes two
to tengos. So if the family agrees to help, that's
on the concept that they want you to succeed, but
they you should. It is in your best interest as
as it's your loved one at your family to also
create a kill switch, say, look, if you're gonna invest me,
I'm willing to. I want to give this, I'm gonna
give this everything, but for you and me, I'm not
guaranteeing you it's a success. I want it to be
a success, but here's a number, and we'll keep track
of it when I get to this. If it's not
successful by this point, I'm going to move it to
a side hustle. I'm not taking any more of your money.
I will get a full time job. I will do
my own savings and fund it from here. But you're
going to help me get started. Well, that takes two
to tango if somebody's willing to do that. Like for me,
I'm willing to invest in my son's success up to
a certain point. But I'm also in business, and I'm like,
I know when to do my kill switch. And I'll
be like, yeah, you can do it as a side hustle,
but you need to have a full time job because
I'm not here to take care of you. You're you're
a twenty eight, twenty nine year old man. You've got
a damn baby and a wife. You got a man up. Okay,
tough decisions, you get me, all right? So what's the
long term damage to a relationship. When businesses collapse after
family investments, they families get tore up. That's why I
always say, if you're going to take money from family,
you need to sit down with them and be business like. Say, look,
I'm going to borrow from you. This is the timeline.
This is agreement between us. I put it on paper.
Here's the agreement. This is the kill switch. If I
have not made this work after this amount that you're
willing to give and I'm willing to work with and
if we haven't made it by then I'm going to
get a full time job. And that doesn't mean I
still don't continue to look for a full time job,
but I'm going to start putting my efforts into starting
this business. You get to that limit, you stop taking
from family. Now will the family be upset because you
lost money their money? They may, But if you go
into it with a understanding that it could lose. But
I wanted to succeed so badly. We got to remember that.
I can't say nothing to my son if I didn't.
I'm using my son as an example. I can't say
nothing if I did I wasn't a participant in the process.
You get what I'm saying. I mean I actively give money,
then I am invested into the process. It's not the same.
And if he loses it and he loses his business.
He's devastated. But I understand it's like the stock market. Dude.
I put one hundred thousand dollars in a stock market.
That shit's lost twenty five thousand dollars in less than
two months. I suck at stock market, but I had
to try it, and I'll never do it again. You know.
Everybody says, well, you just got to have the right
stock guy, and Vince Delacrows put me onto a good
stock guy. But I before I jumped knee deep into
stocks and all this kind of crap, I wanted to
try it out myself, using Schwabs themes and let them
pick it and set it up and see how it went.
And they're the experts, and let it see. And I
looked at their returns and percentages each year, and I'm like, okay,
you know, ten percent return here, fifteen percent return here.
I went heavy into the things like the big big
business and big data and all this kind of shit.
So I'm thinking, you know, that's like the Cokes and
the Pepsis and the Walmart. Hey, that can't fail, right, sucks.
So even when the stock market's up, my shit seems
to be down. So anyway, what the point is. I
went into this knowingly. So some people say, well, pull
out while your losses, at least you salvage to seventy
five thousand, and I forget that shit. I went in
at one hundred. I'm gonna let her ride. If it
goes to zero, fuck it. Sorry for my language, but
it you know what it is what it is. But
I can tell you I do have a plan if
I can't handle stock market volatility, not talking about my
four oh one k's and I just don't touch that shit,
you know what I'm saying. Hold on here, so uh,
I don't. I can't touch that stuff. So in reality
is I'm just gonna once it. If it ever gets
back to the one hundred thousand, I'm just gonna pull
it out. You know, I'm just gonna pull it out.
You know, it is what it is because I don't
like stock markets anything. I mean anyway, I digress. But
remember if a family member gives you money and they're
willing to help, then they're openly willing to help. Then
they have to be understand that that's a risk involved
in the loss, you get me, So they got to
understand that so let's talk a few things about some
hard truths, things that people don't want to hear. Is
it possible that some ideas are just not a viable business. Absolutely,
There's some businesses that I've seen out there that I'm like,
how the hell did that succeed? Yet they succeeded. You know,
you watch Shark Tank. You'll look at some of that
shit and go, how could that succeed? How could that
make it? But yet it does. And then you can
have some ideas that seems so obvious and they fail.
You know. So, yeah, some ideas are just not viable business, okay,
And sometimes it's just saturated. Right next, how do you
know when your market is spoken for? Well, you got
to do the research, you know, you got to start
looking at the area and see what possible, you know,
opportunities are there in that market. That's what I did
with the kennel and the grooming over in Harrisonburg, Virginia,
when I opened that up back in holy crap, probably
two thousand, maybe two thousand and one, yeah, something like that.
When I opened that business way back then, I went
over there and went through the dog food aisles at
the major grocery stores, and just sat there with a clipboard,
and as customers would come in buying dog food, I
would just ask them questions, do you use a boarding kennel?
Do you have one in the area you like? What
do you like and dislike about it? Do you get
your dogs groomed? Would you pay for grooming if it
was affordable in the area and done by professionals? And
I did my research. Then I started looking at the
saturation of the market. I started looking at how many groomers,
how many homes are in this area. Chances are most
homes have pets. How many in the area, you know.
I looked at the area. I said, okay, this can
this market sustain if there's already a couple of grooming,
boarding kennels or And then I went and looked at
the boarding kennels. I got a tour of the boarding kennels.
They don't need to know why I was getting a tour.
I just acted like I was going to board my
dog there, and I wanted to see what it was
like before I bought my dog. Because I had worked
for some kennels prior to this, so I had already
a history of that. And so anyway, the point was
I did my research. So you have to understand whether
the market is already spoken for it. There's an opportunity. Now,
what is the difference between this needs more time or
this will never work. I think when you get to
your kill switch period and you really can look back
and see, look, I've only had one job or two job,
of three jobs. How did that go? Did the people
love it? Did they give me Google reviews, Yelp reviews,
did they give me five stars? How did that go?
It's sometime you get to that kill and you have
to make those harsh decisions. But you can alleviate this
by saying, Okay, let me just move this to a
side hustle and find a job and still continue to
work your side hustle, but you need to focus on
the nine to five, paying your bills and feeding your family.
That that's the key. Family's got to come first. That's
also why I love people in business tax consultants. There's
such a trip. So I know a guy called me
about business and he said that his tax guy. He
was new in business. He's just starting out and making money.
He's electrical contractor. And he says, hey, Paul, my tax
guy said, I always have to pay myself first before
I pay everybody else. I said, you need to find
yourself a new tax person. He said why, he said, well,
he told me you should always pay yourself first. I'm like, well,
what the hell are you paying yourself with? If you're
not making any money, you have to pay your burdens first.
You make sure that everybody else gets paid before you
pay yourself. Otherwise you're gonna go in debt, You're gonna
get behind, You're never gonna be able to catch up.
It's so easy for a tax advisor to say, well,
always pay yourself first. What the shit am I gonna
pay myself with? If my business is not making money.
Think about that logic and go online and see how
many tax professionals say that. Well in business. And my
dad used to say this, in business, you should always
pay yourself first with what with? What? I If I
did a job and I made just enough, you know
where I can pay a bill, You pay the bill.
If I pay myself first, I don't pay the bill,
and then I do another job and I pay myself
and at the end of the month, I gotta pay
my bill my credit card or whatever it is, and
I can't pay it off. Now, I've got reoccurring debt
that's got interest, and I'm never gonna get ahead. You
pay your debt first. I have no problem with people
starting their business on a credit card, as long as
they have the business mentality that that card gets paid
off every month. You do not carry a balance on
a credit card ever. Ever, if you can't afford it,
you don't buy it. Okay, now what is the difference now?
So next it says, why is it sometimes smarter to
pause a business than destroy your financial trying to save it?
Because if you go in debt, you end up chapter eleven,
Chapter nine, You ever end up having fiul bankruptcy. You'll
never recover. Some people say, well I've recovered yet, you
know what? Yep. And everybody that smokes crack doesn't always die,
but some do. Don't be that one. You get what
I'm saying. It's like online where people say, well, I've
never paid income tax. Okay, I've never paid income tax,
I've never done this, I've never done that, and I'm
not paying my taxes and I look at them and go,
you stupid, SOB. I don't like taxes like anybody else,
but I pay. In fact, I pay more than my share.
If they want to give me some fact, that's fine.
But I do not leave anything questionable. If I think
I owe them something, I pay it. Not because I'm
scared of the irs. I just do what I'm supposed
to do. That's the way our system works. Like it
or hate it, change it. Whatever. People say, well, I'm
not paying my taxes. Well, first of all, you idiot,
if you work for somebody, the taxes are already taken
out of your pay, they're already taken out, they're withheld.
So you're stupid. So at the end of the day,
you got to pay your taxes. Well, there's no word
in a constitution that says I have to pay taxes.
Shut up. We have tax laws. Things have been passed
way after the constitution. Okay, that says that you owe
income tax. So shut up. Stop listening to those people.
They're just gonna take you down the road. Secondly, I'm
going to tell you something right now that's gonna save
yourself a world of hurt in the future. And I'm
not a tax guy and I'm not giving tax advice.
All of you out there that are working under the table,
that you're taking care, or you're taking money, or you're
getting Apple pays or Google pays or Venmos from an employer,
stop it because that's income. You got to pay taxes
on it. If he ten ninety nine is you make
sure you're actually a ten ninety nine employee and you
cannot be. If any bill, and if any employer out
there tells you that you're ten ninety nine and they
just pay you and say you're responsible for taxes, you
need to pause for a second because unless you have
a business business account, checking account, unless you're a business
and you do work for other people, if you only
will do work for that one person, and they tell
you where to be, what to do, what the what
tools you have, where to go, they tell you, like
they would an employee, you are not a ten ninety nine.
Do not fall for it, because ultimately you're responsible for
the taxes. Now, when you get a W two, it
comes out of your pay. You're responsible for your half,
the employer responsible for their half. If they tell you
you're ten ninety nine and they take nothing out of
your taxes and you get and you get that ten
ninety nine, you owe that as income. You're gonna pay
one hundred percent of the taxes on that, and a
sole proprietor is gonna pay like fifteen point three or
whatever it is percent taxes on it. If you didn't
plan for that, that's gonna bite you in the ass.
Now if you say, well, nobody knows what they don't know,
trust me, there's a trail somewhere. So look, I advise
you do not do work under the table. Make them
if they're going to ten ninety nine, you do it.
But make sure you pull out your taxes and put
it away so you don't get any surprises. Just because
you may be getting a thousand dollars and if you
pull the taxes out, you may only be getting eight hundred.
That's fine. Put that two hundred in the savings account
or separate account or an interest account for when it's
time to pay your taxes, because it'll come back to
bite you in the ass. I'm I'm just telling you
because I've had to consult with contractors. This is bitting
them in the ass. Now, if you work for somebody
and you're working and they're paying you under the table,
you either demand that you become a W two employee.
Now you cannot be a ten ninety nine unless you
meet all of the thresholds to be a ten ninety
nine and if you're in the middle of that right now,
I'm not an expert, I'm not a tax consultant. But
if you want to reach out to me and you
have an employer that's doing that and they're treating you wrong,
I don't have a problem telling you the different forms
that you should fill out with the IRS and SS
eight in eighty nine eighteen or in eighty nine nineteen
form to establish a misclassification with the IRS. I don't
mind giving you that, because that's not tax advice. I'm
just telling you the forms are available. You need to
fight it, but that's on you, Okay. I went off
a little bit of a tangent. You might think the
money's nice now, but taxes are a necessary evil. They
are what they are. They also establish your retirement, what
you're going to get in a retirement pay as you
get older, all those type of things. So you can
rob Peter, but they're going to pay Paul later. I'm
just saying, all right, enough of that tangent. Now I'm
gonna give you some encouraging things moving forward. A business
to a side hustle means dream is over. No mean
dream is still there. You're just not focusing on it
as much as you would earning a living. And that's
the nine to five. The dream is still there. It's
still a business. You still get all the benefits of
a business. You still get the right off things you
buy for your business and your side hustle. It's different.
It's not the same as somebody that works for Johnny
and just gets a wiring a basement on a weekend.
That's not that's a side hustle, but that's not a
business side hustle. I'm just saying be careful now, ken
getting a steady job or stable job actually accelerate your
future success. Absolutely it can, because now it means you're
meeting all your obligations, you're putting money in the bank,
and you get money that you can inject into that
side hustle to someday become a full time business for
you and you lose the stress. Because money is stressful,
not having it is worse. And now they say when
somebody it was a millionaire, that that they if you
know that when they become a millionaire, you get a
bunch of money, Your life is miserable. They're full of shit.
That is not you don't believe what you see online. Okay,
just trust me. When you get a couple a couple
of million dollars and you're considered a millionaire, life is
the same as it is when you were before you
had money. If you're miserable ast shit, doesn't matter how
much money you have, you're gonna be miserable as shit.
If you're an asshole, you're an asshole. It doesn't matter
that you got money in your wallet. If you were
a great person before you got money, then you're probably
gonna be a great person after you get money. It's
just a reality of it. Money does not turn somebody
into a dick. They were born that way. Now let
me take that back, probably not born that way, but
uh but yeah, because yeah, anyway, I'll get some snack
snacky comments of that, I say, Paul, So the truth
is you've always been a dick? Yeah? Possibly? All right?
Next is the real? Uh? Well okay? Why is patience
often often the missing ingredient in entrepreneurship Because everybody wants
to hit a home run out the park right away.
Everybody wants to think their ideas the best things since
sliced bread, and they win right out the box. They're
not all going to be that way. Doesn't mean you
have to give up on the dream. You just move
it and it takes a little longer. You keep it
as a side still do everything. It's like a business.
You get your licenses if you need to, you get
your insurance if you need to. You do everything like
a business. It's just that it's a side hustle. Business
didn't go away. You still get to write off that
material for that job. On the weekend or Saturday or
Sunday or in the evening or whatever. You still get
to do the right off. You still get it all.
It's just that during the day you're making money at
a full w two job. Nothing wrong with that. Very noble. Now,
is it real entrepreneurial skill knowing when to adapt instead
of when to to grind harder. Yes, you can call
yourself an entrepreneur when you can understand and the signs
of evolution and transition, when you understand it's time to
shift from this to that, when it's time to move
something to a side hustle and focus on a full
time job as a man or a provider for your
family and stop mooching on other people. If that's what
you're doing, unless the people are voluntarily helping you, that's
fine too. But there comes a point when you get
to that kill switch where you got to say, dude,
I got to go to job. I gotta work. I
can still fund this dream, but I gotta work. Now.
You've heard me repeat that over and over again, because
that's called ballistic training. Means that I'm trying to beat
in your head by being repetitious these things, and it's
just my style. If somebody says, well, Paul, I listen
to that. You repeat yourself all the time. You go
to hell. This this is how I do it. I
encourage you to not listen to my podcast because you're
a hater, and I don't care about haters. All right now,
let me give you this is the goal, to prove
you're an entrepreneur or to actually build something sustainable. I
don't give a shit if somebody calls me an entrepreneur.
That's a self imposed title based on my effort. What
I want is to build a business that people look
at and say that it is sustainable and it is
a valid business. An entrepreneur don't mean shit. If every
business he starts ends, they were just hobbies he started
or she started. In order to build a business and
be sustainable. You're an entrepreneur to have the drive and
desire to grow it. You're a sustainable business when it
gets to the point where it's stable and it's surviving,
and it's paying itself, it's paying you, it's meeting is expenses.
You ain't got to get rich. As long as you're
paying a good salary, you're paying your bills. That's sustainable.
Think about it now. A real entrepreneur isn't someone who
refuses to quit. A real entrepreneur is someone who refuses
to destroy their future chasing something that isn't ready just
yet to succeed. That's a quote. K wind this back
and take that quote. Put it on a piece of paper,
put it in your wallet, and look at it every
now and then you get me. All right, folks, that's
all I got for this episode. Hopefully you took something
away from it. If I offended anybody, I don't give
a shit. If you learn something from it, you're welcome again.
Many things to take away from this podcast in business,
but just because of business venture or startup doesn't succeed
in your eyes doesn't mean that it's a total failure.
It just means that you have to shift your momentum.
And there is nothing wrong working for somebody else and
getting his solid weekly check while you're still hustling your
butt off on weekends and making that nice side money.
You get me, all right? Till next time, folks, Stay safe,
God bless we'll catch you on the next episode of
Master the EAC podcasts. And in advance, sorry for all
the dirty language in there. Again, I'm trying to clean
that up, all right, peace.
Speaker 1: Thanks for tuning into another electrifying episode of the Master
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