Let’s talk about income. If my family is really going to get out of debt then Increasing our income is the best way to do that. And frankly, I need a change from thinking about how I got into debt to thinking about how I’m going to get out of it.
Building the Right Side Hustle
Having a “side hustle” is all the rage right now. Every finance blog I have come across has a post somewhere talking about the importance of making extra money on the side. I’m no different. Increasing your income is the best way to get out of debt fast. Not to mention that you can budget to your heart’s content but much like a starvation diet if the budget is too strict you will fail and eat all the Oreos in the package. At once. With wine because you are classy like that.
However, not all side hustles are created equal. There are two ways to bring in extra money one: one or one: many. I’m sure there are better names for this principle but I haven’t found them yet.
Both my husband and I are self-employed. We no longer trade hours for dollars and have made more money than we would have otherwise. But our business still has a problem. It has a one: one ratio.
We make jewelry & accessories. (This reasoning plays out no matter what you make, or what services you provide.) When we make a piece of jewelry we can sell it once. Each order is a separate item we can only sell to one person. Retail, wholesale, it doesn’t matter. I can not sell that item to 2 people because it is only one item. This is a one: one ratio. A lawyer, a designer, an artist all primarily function the same way. Typically you get a client, agree on an assignment, complete work and get paid.
I have had a lot of side hustles over the years and they have all been one: one. Don’t get me wrong there is nothing inherently wrong with having a one: one business. They are a quicker way to get extra money in your life, but one: many are more profitable. Income generated from a one: many project allows you to make one item and sell it to many people. I can write a book, make stock photography, or create a class. These kinds of items are typically front-loaded with effort but have a long tail for sales to build over time.
Let’s say I wanted to build a business as a tutor. Tutoring is literally called one on one help. Finding a few people to tutor is easy, though you are limited in the amount of money you can make by the hours you can devote, and the price people are willing to pay. You can transform this one: one into a one: many by taking your experience tutoring and writing a book, guide, or self-paced class helping people through the areas your students are struggling with. You’ll be able to help a lot more people and increase your income because of it – even though your product is priced at less than what you would charge to do it yourself.
Creating My Own Passive Income
I am an artist and graphic designer. My first inclination to bring in more income was to put my portfolio up and start looking for clients. I have always wanted to pursue a career as an illustrator but in that model, I’d be making another one: one business. Yes, the work would be different, more creatively engaging and less stressful on the body than making jewelry but in the end, I can only sell each illustration one time. I have come up with a few plans to take the desire to illustrate that will fit my goals better.
- Licencing my art.All of the products you purchase with designs on them have been created by an artist. Sometimes in-house, though often by an independent artist who has sold the right to use their art. There is a huge market for this, even a trade show at the Javits Center in NYC every year for artists to show off and court businesses interested in working with them.Starting in 2019 I will be putting together a licensing portfolio and marketing my art to be licensed. While I’d love to participate in the NYC show, it is very expensive and my business would have to generate enough income to warrant that kind of expenditure before going. That or I’ll have to start a business saving and hit $10,000 to be sure I can cover all the costs and extras that come with a trade show like this.
- Create my own company to sell products with my designsI’m actually really excited about this one. Most of my experience is in selling retail so this business is easiest to imagine realistically. I am creating art that will be on my own finished products I’m going to start with some digital download designs (like coloring books) and easy to make on-demand items (like prints) that will allow me to make some income before I invest in stocking actual products. I will also get to know who my customers are and create products that will appeal to them instead before investing money and finding out I’ve guessed wrong and wasted my money. Who knows, if this goes well I might not pursue licensing because this could be more profitable, or at the very least being able to exert complete control over the finished products with my art is so comforting.
- Write books and guidesI have been making money as an artist for over a decade. I definitely have enough knowledge to write a book that can help other beginning artist entrepreneurs on their journey. I’m going to do some brainstorming to refine this idea down from the very general “make money as an artist” so something more specific that will help my books solve a specific problem.
- Make a Web ComicThis one isn’t so much a money maker as it is a side project that has the potential to make money if I connect with an audience.
- Affiliate IncomeI know some people go crazy on this and make tons of money. That’s not my style. However, I am not opposed to generating a small amount of income when I do mention products I use and love whether that be books via Amazon or referrals to YNAB.
Tell me, what is your favorite side hustle or passive income project?