Mar 18, 2011

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Posted Under: Tips & Tricks!

One of the biggest challenges in escaping from a 9-5 jail is the time requirement to start a new business and make it profitable enough to pay the bills. The side hustle is the usual answer but many of these side hustles never make it to be a ‘business’. Most of these hard working side hustlers, trying to make both a job and a business work side by side, work countless hours, lose sleep, and end up running the business down. They wish they had more hours in the day or if they could simply clone themselves. We all know the first one is not very easy and not to say that the later one is doable or easier, but that’s what we’ll discuss in this post.

I wish I got a penny every time an aspiring entrepreneur told me how s/he is going to go full time in his/ her business once the business starts making at least as much as s/he is making at the day job. I believe this thought process is based on a [false] belief versus being based on logic. I mean, how many part time jobs pay as much as a fulltime job? It is very simple; rewards are proportionate to efforts put in and risks taken. If you put 2-3 hours of evenings and weekends, how do you expect it to become a business with stable cash flow that generates fulltime income? And yes this applies to web based startups too.

So, going back to cloning, most of the side-gig startups, when they see some growth and the workload seems to go out of control, the Founder faces a dilemma – go full time on the new business or self clone: hire someone to manage & run the business.

Hiring someone to run their business looks like a great idea to many aspiring entrepreneurs and here’s the ideal arrangement they hope for – “I need someone who can run my business as effectively as I do, make it profitable and pretty much do anything & everything as I do. This person’s compensation would be either based on performance (sales – I mean there’s no limit to money you can make, you bring money in, and I’ve no problem sharing it) OR steeply lower than what I make at my day job”.

Now as good as it sounds and logical it seems, it’s NOT. It could be a good idea in some models, for instance if you open a sandwich store, you can hire some college kids to make and sell the sandwiches, or if you open a retail store, you can hire a store manager and a couple of sales reps and not be involved in day-to-day operations yourself however, for most other businesses like a web or tech startup, a service based business etc it is not as good as it sounds.

First of all, why would someone who is as qualified as you, can work as effectively as you, and can sell as well as you do, pretty much be your clone and replace you, work at a fraction of your current salary or only commission? Would you take it if someone offered you a similar arrangement?

Second, when you yourself do not have enough confidence in your business that it will make money (the fact that you’re sticking with your day job at this point clearly shows you’ve zero confidence in your business, don’t lie to yourself) then how do you expect someone else to have passion and confidence in your idea?

Third problem with this situation would be – employees are not as driven as the business owners; they don’t have a direct investment in the business and therefore they do not have the sense of urgency and motivation that business owners have. Essentially, you would be leaving your business to someone who has no direct investment in what you have created with your own time, money & effort. They may very well run it into the ground. Is the reward worth the risk?

Having said all that, I believe the goal of any side hustle should be to prove the idea, test the market, develop a prototype, create a working model, hopefully get some initial clients and help the Founder cut the cord confidently. A side hustle should FREE the founder from his/ her 9-5 jail FIRST. If Founder’s escape from 9-5 jail isn’t one of the goals, then that side hustle barely stands a chance to turn into a business.

The founder should be the first fulltime player in the team. Period. Startups scale and become businesses on ideas, effective implementation efforts, and driven individuals. The founder brings ideas to the table based on his/ her vision and feedback from others, the founder helps effective and timely execution of those ideas and finally the founder has to be the cheerleader to keep everyone motivated and productive.

I would love to hear your experiences. So, if you are working on a startup on the side, or have made the transition from side hustle to a business, or failed to make a successful transition… What were your challenges, lessons learned in the process, and what do you suggest to your peers in the same shoes as you once were? Please share it via comments below.