Don’t Start a Business

In this video, I’ll talk about why you should keep your day job.

If you spend more than 5 seconds on social media, it seems like everyone has found a way to quit their job and travel the world, all while making a six figure salary. And sure, many people have been able to do this – I have done it – but I want to pull back the curtain a bit on this lifestyle and talk about some of the downsides people don’t really talk about and some of the good things that come with a day job.

I actually really enjoyed my last day job – I eventually went full-time here on YouTube when the company had to pivot, and I was laid off. But having consistent and reliable income while focusing on just one role at the company was pretty nice.

Obviously, day jobs vary drastically, and if you are completely miserable working yours, then by all means, you should look to see how you could find a position doing something that won’t make you completely dread your job.

And before people get in the comments saying something like “you just want people to keep their jobs so you have less competition on YouTube” – on the contrary – I welcome competition because it forces me to be better -- and I feel confident enough in myself to adapt when needed.

So let’s talk about why you may not want to be a full-time freelancer or creator or whatever you want to call it.

Income Uncertainty

Probably the biggest issue freelancers face is not always knowing when your next paycheck will come in. Some work may be seasonal, some gigs may follow trends and then disappear, some clients may just not come back as repeat customers. In 2015 we had a client for whom we did monthly photo work for over a year, and then, they eventually hired an agency who then replaced us. So if we were relying completely on this one client and they left without warning, we’d be pretty screwed.

Because you don’t want to be overly reliant on one source of income, you have to make sure you have a diverse selection of clients or streams of revenue. If you were relying on a YouTube channel’s AdSense to pay your bills and people stopped watching your videos, again, you’d be in a rough place.

And even when you have lots of clients and contracts, you may still find yourself waiting on invoices to be paid and not sure how you’ll cover your expenses while you wait for those checks to come in.

And then there’s the added pressure of deriving all of your income from your full-time business. I know some stock traders that have talked about the negative aspect of relying 100% on your trading to make a living. You may find something that you enjoy doing on the side was more enjoyable when it was on the side. The pressure of making money can ruin good things if you’re not careful.

So on the contrary, with a day job, it’s likely you have a reliable paycheck that shows up every two weeks no matter what. If you're in commission-based sales or something like that, that would be the exception, but generally speaking, you know you’re getting paid as long as you don’t get fired.

This makes it easy to plan, to budget, to have some peace of mind.

Business Complexities

I think one of the bigger challenges of being an entrepreneur is managing all of the complexities involved with running a business. Here in the US, there are hoops to jump through federally, with the state, and even on a city level – and it can be really tricky to figure out everything you’re supposed to do in order to ensure your business is compliant with everything it’s supposed to be compliant with.

Taxes become a lot more challenging as well. Usually, with a W2 job, you see the taxes taken out with each paycheck and you file your taxes somewhat simply at the end of the year. But it gets more complicated when you’re running your own business. There are different tax structures to choose between which come with different implications.

Because it’s more complex, we hire CPAs to handle it for us, which of course, comes at an additional cost.

Then, you have to figure out when to hire people, if you can afford to hire people, how to fire people, how to structure your business so it isn’t 100% reliant on you working 24/7 to bring in income, and so on.

Getting a Mortgage

One thing that is certainly more difficult when you aren’t a W2 employee is getting a home mortgage. Usually, underwriters want to see two years of your business’s tax returns along with a myriad of other documentation showing you have reliable income. And if you pay yourself monthly based off of your needs and the cashflow of your business, it’s possible you don’t qualify for as much as you may have thought of.

So if you were looking to buy a home in the next couple of years and are also considering leaving your job to do your own thing, this is something to keep in mind. I incorporated our business 5 months after we started our YouTube channel, because revenue was starting to come in, and I wanted to have it setup correctly as soon as possible.

Also when we were buying our home out of state, we had to explain to the underwriters why our business’s revenue wouldn’t take a hit from relocating.

Different Hats

I mentioned some of the aspects you have to handle as a business owner earlier, but let’s go a little deeper into the different hats you have to wear.

Hat #1: Creating – Whatever the core of your business is, this hat is doing just that. So for instance, if you make YouTube videos for a living, it’s scripting, filming, editing, and uploading a video.

Hat #2: Marketing – Doing outreach to find your ideal customer, engage them, and convert them is no easy feat. Whether that’s creating videos with viral potential, creating pay per click advertising campaigns, mailing out flyers, whatever – it’s time consuming and difficult to do well.

Hat #3: Innovation – If you’re in a creative field, you need to stay on top of trends and gear and what clients are needing. If you’re selling products, you may need to add SKUs to your product line, implement customer feedback, and stay one step ahead of your competition. If you own a restaurant, you need to adapt your menu over time as tastes and wants change.

Hat #4: Customer Support – Just about whenever you have customers, it’s inevitable that some will need more assistance than others or just be a complete pain in the butt. Some have unrealistic expectations of you, your service, or your product. Some just want to complain. It’s just the nature of the beast.

Hat #5: Employee Support – if you run a small business with employees, you have to handle personnel issues and decisions. Hiring, firing, raises, setting clear expectations, and holding employees accountable.

Hat #6: Bookkeeping – Even if you hire an accountant and maybe even a bookkeeper, you need to understand the numbers of your business. What is your profit margin on a video shoot for a real estate agent? What is your best selling loaf of bread, and which one should you cut from the menu? If you don’t know your numbers, you don’t know your business. So you need to be able to understand a profit and loss, know where the majority of your revenue is derived from, and what expenses may be holding your business back.

The Struggle

So in a similar vein, I want to cover the three personalities that make up a business owner. These come from the book The E-Myth by Michael Gerber – which is a great book if you are a business owner or want to become one. And these are bigger picture ones that encapsulate the things I just mentioned.

Personality #1: The Technician – the technician is the hat you wear when you do the work to make, sell, and deliver whatever it is your business does. So if you sell bread at a farmer’s market, this would be buying the ingredients, baking it, packaging it, and actually selling it at the market.

Personality #2: The Manager – the manager is the hat you wear when you implement people and systems to achieve results. So it may be renting out space in a commercial kitchen once a week, hiring an employee to help you bake, and figuring out how to increase profit margins.

Personality #3: The Entrepreneur – the entrepreneur develops the vision for the business and then focuses on taking it from where it is to where they want it to be. This is a more strategic, big picture hat you’ll wear that has a grander plan for the future. Maybe this is growing from the farmer’s market to a brick-and-mortar bakery… or having your baked goods available to buy at Starbucks.

The problem with most business owners is that they are stuck as technicians, since generally, technicians start businesses. If you are a baker, you open a bakery. If you are a mechanic, you open an auto repair shop. But many people become trapped working in their business instead of working on their business. They are too busy baking bread and fixing cars to focus on the big picture aspects to grow and optimize their business to run more efficiently.

For a personal example, I used to edit all of my YouTube videos, because I was a video editor. I did this for 5 years until finally deciding to hire a full-time editor. It was hard letting go of that control over the edit and increasing our business’s expenses, but this freed up an enormous amount of my time so I can focus on bigger projects I want to do for my channels and dabble in other business ideas as well.

Final Thoughts

I wanted to make this video because I feel like social media has made people feel bad about having a 9 to 5 or that they need to turn their hobby into a side hustle and their side hustle into their full-time job, and that’s just not the case. Running a business is a lot of work, and not everyone wants to worry about everything I just mentioned. Just like most entrepreneurs would be miserable in a 9 to 5 day job, many people would be miserable running a business.

And if you have that entrepreneurial drive, a video like this won’t deter you… because if you get deterred that easily, you probably aren’t an entrepreneur.

But I just wanted to cover some of the less glamorous side of running a business. It’s not all working on your laptop from the beach, raking in cash hand over fist.

Thanks for watching, I’ll see you in the next one.