This transcript was generated from the episode audio and may contain minor errors.
[Music]
Weekend workshop, money math made simple. Hey friends, what's up? Welcome back to the podcast. This new segment, something we're doing only for 2025, it's all about helping you learn the key steps to a new side hustle, one step or concept per week. It includes activities, examples, and more.
And of course it's all free. We're gonna use the book "Side Hustle" from idea to income in 27 days. That is our text, our curriculum. But if you don't have the book, that's okay. I'm gonna take you through the key steps along with listener stories and examples throughout the year.
And today's episode comes from day five, which is all about making smart and simple projections. Now we try to keep this really simple, okay? It's really helpful to know if you're starting a business, how much money is it going to make? And in some ways, of course, you don't know. That's why you have to experiment and try different stuff.
But there are some factors you can control that will help you make some smart projections and therefore might help you make the right decisions in the first place. Like you wanna choose the right business idea or side hustle idea. And part of that is choosing a profitable idea. So our learning objective, profit forecasting doesn't require an MBA. It doesn't require complex spreadsheets.
You can figure out if a side hustle will make money using basic math on the back of a napkin. And the key is understanding one simple equation, which is expected income minus expected expenses equals projected profit, okay? So there's a story in the book about Tashir. He's this guy who bought a bunch of cars, which sounds really complicated, but it's actually pretty simple. He leased and bought a whole fleet of cars that he rented out on the platform Turo, which is kind of like Uber except anybody can list their car up and people can rent it.
And so before he dove into this, he did some quick math. He was like, what is the average daily rental rate? How many days are rented per month? That then equals my monthly rental income. And for, you know, each car was like $1,000 approximately.
He realized his monthly expenses, which were insurance and maintenance were about $300. And so he's like $700 profit. And then he thought, because he was creative, that's cool that I did that for one car, but how can I do it for more? So he actually went out and bought a whole fleet of cars, which made for a cool story. We featured him very early on in the podcast.
So the math was so promising, you know, that he expanded to renting out 16 cars, but it all started with that simple calculation showing how his first car would be profitable, okay? That's why this back of the napkin, or it could be a spreadsheet, but it can be a really simple one, calculation is gonna help you. Let's take another example of a service. Like say there's a graphic designer who wants to teach logo design workshops. Well, they need to figure out what is the workshop fee?
Maybe it's $200 per student, let's say. What is the maximum class size? Let's say 10 students, okay? And let's imagine this is an in-person class with a room rental is $300, the materials are $20 per student. So they kind of run those numbers and they're like, "Okay, potential profit per workshop is $1,500." Is that good?
Well, if it's good, then you do it, you know, or at least you consider moving forward. If it's not good, then you change some of the variables, like you charge more or you reduce your expenses, or you try a different idea. In fact, that might be better. So these examples, the car rental thing, the graphic design workshop, they show how simple calculations can reveal if an idea is worth pursuing. So when we return, we're gonna take a quick break.
When we come back, how you can make smart projections that actually help you make those smart decisions about your next idea. 'Cause I want you to use your time most effectively, especially for our audience of busy people. I make this show every day for busy people. So let's take a quick, quick break and then smart projections. [Music]
All right, here's a trick to making smart projections.
Don't just make one of them. Create three scenarios to better understand the potential of your idea. Now this might sound like more work, but it's really not a ton more work and it's gonna help you a great deal. So basically what you wanna do is create a conservative estimate, a realistic estimate, and an optimistic estimate. So if you are teaching that class, for example, your conservative estimate is like a low number of students signing up.
The realistic is like what you most think is gonna happen and your optimistic is like, oh, everything goes right. It's gonna be amazing. What do those numbers look like? And this could apply to any particular idea. It could apply to the car rental thing.
It could apply to a baking side hustle or selling something on Etsy or really any kind of product or service or even a middleman/middlewoman business like we talked about last week, affiliate income. So again, conservative estimate, realistic estimate, optimistic estimate. Imagine a dog walking service. Conservative estimate would be three walks a day at $20 each. Okay, that's $60 a day in revenue.
Realistic, five walks a day, $25 each. So we're increasing both the customers or the users, I guess, dogs in this case, but really it's the owners of the dogs that are paying and also the average price. So five times 25, 125 a day, $125 a day. Or optimistic, we could say eight walks a day at $30 each, $240 a day. So you basically go through and kind of plug in the numbers based on whatever your idea is.
Again, conservative, realistic, optimistic. Now your action exercise, the notes page for every weekend workshop includes an action exercise. That is at sidehustleschool.com/workshop. Basically you take a napkin or a piece of paper, might be easier and create these quick projections for your side hustle idea. So start with your most basic offer, work through these steps, write down your planned price, list every expense you can think of, calculate your profit per sale, estimate how many sales you might make per week and then multiply that to find the monthly potential.
Okay, if it sounds like a lot, it's actually very logical and simple, full details in the book, more information at the website and there's also an image you can refer to there and there will be more resources to come. Now doing this kind of estimate can help you a lot, help you save time and as I said, choose the right side hustle idea. I think that's a big part of side hustle success is actually like choosing the right idea to start with rather than just choosing one idea and continuing to work on it and work on it when there might be a much better idea just waiting for you. So I always encourage you to put some time into the selection of ideas. And of course, remember that these are estimates, not guarantees.
The whole point is to understand if your idea has real profit potential before you invest significant time or money. That's it for today. Thank you for listening. Thanks for tuning in. I'm excited to get this year off and running.
This is episode 2,948, much more is coming up. It's always free. My name is Chris Guillebeau. You are listening to Side Hustle School. [Music]
From the Onward Project.
