This transcript was generated from the episode audio and may contain minor errors.
[Music]
I'm really glad you're tuning in today. This is Chris Guillebeau for Side Hustle School. Today we've got an episode that kind of speaks to the heart of a core side hustling issue, especially if you're doing a service business. If you're selling e-commerce, it's a little bit different because people just go and buy something on your website, they make payment right away. Often though in performing a service, you invoice or you somehow get paid after providing the service.
It's actually better if you can do it beforehand, but I might mention that in my answer. First though, the question, it comes from Tim in Dallas. He has been tutoring math for two years and has never sent out an invoice, never sent out an invoice in two years. Now just to be clear, he has been getting paid, at least most of the time, but that's just happening with cash and Venmo, like right after the service. And in a lot of ways it's better to have an invoicing system.
So this isn't just about Tim's lack of an invoicing system. I think there's a deeper layer here, which is the mental block many of us face when it comes to formalizing aspects of our business that we're not familiar with or that we've been running informally for a long time, might actually scare us a little bit. It's easy to procrastinate and just say, I'll get to it eventually, but then of course that never happens. And I have 100% been there. In fact, I think in some areas of my business, I'm probably in that space right now.
I mean, I know how to do invoices, but there's lots of other stuff that I get stuck on. So let's talk about both how to deal with the financial management process and at least in a simplified way and also about what to do with these psychological barriers. So a lot to do here, but I'll try to be concise, wanna respect your time and give you something helpful. Tim's detailed question coming right up. [Music]
Hey there, I'm Tim from Dallas and I've been tutoring students in math for the last two years.
To be honest, I have never sent out an invoice. I've just been taking payments in cash or through Venmo. Am I setting myself up for some serious financial issues? I know this isn't the best way to manage finances, but I've just never gotten around to changing it. [Music]
All right, Tim, I know a lot of other listeners have probably dealt with this or will deal with this at some point if they're still getting started with things.
So as mentioned, there are two interconnected issues here, the practical matter of actually sending an invoice or setting up an invoicing system and whatever the psychological hurdle is that is keeping you from implementing one. And maybe it is just a practical thing, but I think for a lot of people, like they procrastinate because there's some sort of avoidance to it that is psychological. So taking money, cash, Venmo, nothing wrong with that, just to be clear. But I think it's going to be better to have an invoicing system, some record keeping for taxes, client management and so on, especially if you're gonna build at some point or start a new side hustle. So on the practical side, just choose something simple.
There are lots of tools. FreshBooks is great, QuickBooks is great. There are others. There are many different invoicing systems. They are all very low cost, well worth it.
I would just say pick one. Several have been sponsors of the podcast, so I don't recommend one over the others, but they all do really good things, okay? Start small, just ease into the transition, go ahead and sign up for the free trial or whatever the lowest priced plan is and tell your clients, hey, tell one of your trusted long-term clients, hey, I'm trying to actually professionalize better here. So I'm moving to this new system. It's really simple, we're just gonna send you an email after the session, you can pay right away, you know, that kind of thing.
Oh, and by the way, actually, I think you can use invoices in advance. If you're doing, you know, four sessions next month, you can send out that invoice before the session start. You don't have to wait till they're completed. This is a common misunderstanding that you actually have to perform all the work before billing for it. In some industries, that's the norm, but in others, there's a lot of flexibility for it.
So I actually think it's better, if possible, to get paid before you provide the service. So that's a side note there. And on the other side, I just want you to think about, like why you're having this side hustle in the first place. It is often for so many people about increasing their confidence and their belief in themselves. And part of that is going to just be further increased or improved by some aspects of professionalization.
Doesn't mean you need to add layers of bureaucracy and paperwork, but just a little bit of professionalization can help you feel better about this business that you're building. So I encourage you to take the step, at least, as I said, sign up for a tool, get the lowest cost plan, and see how it feels to go through that invoicing system. And I bet it's actually going to help once you kind of go to the other side of it. So Tim, and anybody else out there, remember I'm cheering you on. I think it's just so admirable, people starting lots of different projects, making investments in themselves.
And so I want to be as helpful as possible. Let me know how I can do that. Of course, you can tune in every day, seven days a week. It's always free. My name's Chris Guillebeau.
This is "Side Hustle School." [Music]
From the Onward Project.
