Everyday Hustling…

If you have been reading my pieces consistently, you know that I am a huge fan of building a side hustle. In fact, I have mentioned it multiple times in past Three Action Thursday pieces:

• Check out the “Personal Finance” section of Our Lives Change When Our Habits Change.
• Additionally, read the piece Build Yourself an Off-Ramp to discover why I think it is so important.

In my piece My Story, I detail how I am living proof that a side hustle can change your life. Recently I had a discussion with a friend and past client who is considering starting a side hustle. The talk centered on the difference between providing a service versus building a product, and how to choose wisely for the future you want.

Service-based businesses center around trading one’s time directly for a fee. The typical service business provides intangible products, such as accounting, banking, consulting, cleaning, landscaping, education, insurance, treatment, and transportation services.

Service Business Pros

• Low setup costs
• Variety of work and clients
• Known business model
• Typically caters to an existing market

Service Business Cons

• Client management is often labor intensive
• Cash flow peaks and troughs
• Time-based billing and typically expensive to scale
• Must focus on pleasing the client

Conversely, product-based businesses (as the name suggests) create products that are on demand in the marketplace and do not necessarily stipulate trading one’s time directly for a fee.

Product Business Pros

• Ability to scale
• Typically more predictable revenue forecasts
• Possible lower overheads
• You’re building your own vision
• People are more mission driven to disrupt and create something new

Product Business Cons

• Challenging to think of an idea
• Often requires upfront investment
• Customer support can be a burden
• Unknown demand at first
• Hard to pivot once product is established
• At some point it’s all about optimizing

While I have built two service-based businesses in True North Realty and Leverage Information Technologies, I also have some product-based business envy. I think if you have the ability to take your niche skill and productize it, you should do that versus providing a service, especially if time with your family and friends is of utmost importance to you. Service businesses are so heavily based around your client/customer’s schedule and not your own. At the same time, though, I really enjoy the service-based business model because direct interactions with clients and customers fuel my extrovertness and give me a huge boost of happiness and satisfaction.

Case Study Example:

A stay-at-home mom wants to help people declutter and organize their homes.

Service Business Model: Go to a client’s home and assist them directly for an hourly fee to declutter their home until the job is done.
Product Business Model: Sell a step-by-step guide to decluttering their home.
Hybrid Business Model: Visit someone’s home for a two-hour consultation and then supply them with a tailored plan just for their situation.

**Action:

1. Decide on your side hustle. If you don’t have any ideas, you can find some on Nick Loper’s Side Hustle Blog. He gives 99 Side Hustle examples.
2. Think long and hard about which business model is best for you, your family, and your natural skills. Is it service-based, product-based, or a hybrid?
3. Shoot me an email with questions or just to share your ideas with me.**