Welcome to the first-ever income report! I’ve thought about the idea of being transparent with what I do. How I’m able to run a side hustle and how much I make and spend in great detail.
As far as I know, there isn’t anyone in our industry doing this. I fear that it would show my vulnerable side, but whatever. Maybe my clients will even come across this. But this is really a learning experience for me and for others who may want to follow the same path.
But I’ve been running this side hustle through my own experiences with the advice of some well-trusted individuals.
Putting On Business Pants
This year I really had to increase my business knowledge. That means learning about finance, taxes, and maintaining the business. This is all while I’m the primary person doing the technical work.
A few books helped put me in the right mindset, specifically:
- Company of One by Paul Jarvis
- The Million-Dollar, One-Person Business by Elaine Pofeldt
- Profit First by Mike Michalowicz
Living in the Bay Area, one may drink the kool-aid and obtain a mindset of high growth. Grow the company, add people, spend more money to make money.
That’s the opposite of what I’m trying to do. I’d like to keep my business small and work on projects that are worthwhile.
When it comes to finance, I hired a CPA to help me get things in order. I learned a lot about what I need to do, where my gaps are, and where I can improve. Spending is definitely one of those areas that need to be watched carefully. When you’re not in the books every single day you tend to lose sight of where the money goes. This is especially true if you don’t have a budget! So the first thing for 2020 is sticking to a business budget so I can ensure I can pay myself.
The software I use is Quickbooks Online. A lot of accountants are familiar with Quickbooks and it provides me with everything from tracking expenses, invoicing clients, creating reports, and more.
All-In for Podcasting
I want to put in a small section here about podcasting. I co-host the Clear To Send podcast with my friend François. Our goal is to publish a new episode every week. That’s a challenge for us since we’re very busy. But we see tremendous value in the podcast.
Clear To Send has been a nice marketing platform for both of our businesses. We published 48 episodes in 2019! We missed only 4 episodes. That’s a success in my books.
But the key takeaway here is to provide immense value to the listener. We don’t pitch ourselves heavily on the show. We try to keep the discussions on a highly technical level. But sometimes we do acquire clients through the podcast which is a lot more profitable than selling sponsored episodes or ad spots.
Being transparent, I work a full-time job as a network engineer in Higher Education. If you’re curious, finding which university I work at is not trivial. My side-hustle is Packet6, a Wi-Fi consulting business.
My intention is to publish a quarterly report on how my business is doing. The purpose is to share with others who may want to start their own business. I’ll document my process, failures, and successes along with the tools I’ve used. This is my first time doing an income report but it will improve from this point forward.
When I started Packet6, I didn’t want to resell hardware. I started with professional services only. Later, I became a Cisco, Meraki, and Mist partner.
The line item for hardware sales grew 181% from 2018. The majority of those sales being Meraki hardware and licensing. When I sell hardware, it’s only to my current clients who use my professional services. I don’t have an e-commerce site to resell hardware and neither do I advertise I sell equipment.
This year I experimented with providing structured cabling by subcontracting it to a company I know. It’s important for me to provide the best level of service and when it comes to partnering with other companies, they also need to have that same caliber of service.
While I learned a lot about structured cabling, it’s important to review the services and think about how that impacts the business. In 2020, I will continue to provide structured cabling for projects that make sense to have it.
The core service of my business is professional services. It’s where I differentiate myself from my competition. This service grew by 80% from 2018. When I look at how I was able to grow 80% it comes down to the relationships I’ve created and the word of mouth from the quality of service I provided to my existing clients.
In total, revenue grew 336% compared to 2018. Revenue is not the only indicator of business success. To me, success is based upon the net income the business retains along with my mental and physical health.
With the increase in work and revenue, my expenses increased by 223%. An insane amount. It’s going to be a top goal for 2020 to decrease that number. And by decreasing expenses, profit will increase.
But all things considering, net income increased 768%. When I think back to how I was able to grow this much in 2020, again it comes back to the building and nurturing of relationships, genuinely helping others, giving back, providing the highest level of service, and delivering on client expectations.
Important Lessons Learned
Health is important. With a side hustle, I avoided exercise and ate unhealthy foods. When traveling, I ate excessively. I’m a foodie so I like to try different things but it later caught up to me at the end of this year. I flew a total of 39,932 miles. 28 domestic flights and 5 international. What that really means is I didn’t prepare for this amount of travel. And my body hated me for it.
Learning finance is critical. When you start a business, you better learn how to maintain the books. You can outsource that later on. It’s highly beneficial to learn how money comes in, where it goes, and how you maintain a profit.
Watch your expenses. This is where forecasting comes in handy. I need to do better in understanding how much money I have and how much is available for spending. You can’t forget to pay yourself! First and foremost.
Learn how to communicate effectively. That begins with listening. Always listen to your client. Do not interrupt them with silly solutions assuming you knew exactly what they meant. Communicate as much as you can to avoid any unexpected situations.
Don’t like sales? Get used to it because we’re always selling. When you run a business, you’re selling yourself and your expertise. This part is more of an art because when it comes to sales we always think about the sleazy salesperson. This is not what I mean. If this side-hustle was my full-time career I would rely 110% on sales in order to survive. I honestly haven’t really improved in this area but I’m looking for books that can help me in this area.
I’m happy with the results of 2019. I just need to maintain the level of success without burning out. And remember, it’s a side-hustle. I have a family, a full-time job, my kids’ extracurricular activities, and more.
Be better than yesterday.