This transcript was generated from the episode audio and may contain minor errors.
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Yesterday we heard from someone who was trying to figure out how to price their service based on value, not just an hourly rate. Today we're gonna hear from someone who is also doing well and just thinking about the right adjustment to make. They are making a good amount of money, actually more than their corporate salary, they say. But the problem is that the money is uneven, like the income is not coming in the same rate every month. It's a seasonal business effectively, they'll describe it more.
So what do you do in this situation? Your whole goal is not just to replace your salary, it is to replace predictability in some ways. Lots of businesses can work with fluctuating income, but you do need to plan for it a bit. I'm gonna give this guy a couple of concrete signals that might be like, okay, now it really is the time to quit the job. And then also maybe some tactics to even out the cash flow once you no longer have the safety net of the regular paycheck.
Side hustlers, friends, community, I'm so glad you're out there. Stay tuned for this question and my answer. [Music]
Hi there, I'm Jasper from Boise. My weekend gig, hand turned hardwood pens, now averages $4,500 a month, which actually tops my corporate salary. Sounds like I should quit, right?
But the thing is, one month I clear $8,000. The next I barely hit $1,000 when wedding gift season slows. Health insurance and mortgage deadlines don't really work with my revenue roller coaster. At what point savings cushion, consistent average, sign wholesale contract, does it make sense to hand in my notice? And how do people smooth out that income dip so the leap doesn't become a free fall?
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It's always fun to come to this dilemma when somebody's like, hey, I'm making enough money that maybe it's time to quit, but also I worry and this factor and that factor and so on. I think you can think of the decision in two parts, proof that the business can carry you now and maybe some tools that will smooth the income later on. For the first part, proof that the business can carry you. You start with your personal budget, list every fixed bill, like what are the expenses that I need to have covered, perhaps a little bit of a buffer as well. And if my side hustle is gonna cover that and I feel pretty confident that even in its worst month, it's gonna cover that, then that is a great sign.
Like the best month is easy, but what about the worst month? Okay, that's great. Add in a little bit of runway, et cetera. Now you're looking at a time in which it's perhaps worth quitting your job, if that's what you want to do, okay? If not, I think you need to increase income first.
And then second, the second part is like, how do we keep the income steady? How can we smooth out those fluctuations? Well, some businesses are just seasonal, that's pretty normal, but there's some things you can do. You can take deposits upfront, make sure you're getting deposits. And if you're only taking a small deposit, take a larger one.
Just start, you know, saying I need a 50% deposit. Deposits turn future work into immediate cash. Perhaps there is a way to have subscriptions or a profit hold or a part-time bridge. There are various tools we can use to basically smooth out those fluctuations. A good accountant should be able to help you with that as well, or a bookkeeper even.
So if possible, maybe step down to four days a week at your job, or maybe pick up some consulting projects for the first six months you are mostly self-employed. Just kind of softens the transition and allows you to keep your health insurance and so on. But in short, don't quit because the average looks good. Quit when the worst month pays your bills. When you have banked, let's say, three to six months worth of living costs.
And you feel pretty confident that your income will at least continue, even if fluctuating seasonally, into the foreseeable future. Good luck cheering you on. As always, listeners, cheering you on. I hope that you'll take one step today, one small step to get closer to something that's important to you. And of course, the podcast will continue to be out every day, seven days a week.
Subscribe, follow wherever you like to listen. My name is Chris Guillebeau. This is Side Hustle School. [Music]
From the Onward Project.
