The One With The Source Of Profit
TL;DR
In the latest edition of The Accounting Podcast, host Blake Oliver quotes author Ron Baker and reminded us that profit derives from risk (min 33:45).
Slow down and say that outloud. Profit derives from risk.
Sometimes I think us bookkeeping folk can be so stuck in our bank reconciliations that we forget that everything is governed by fundamental laws of economics. The basics of capitalism rely on the idea of the Risk vs Reward tradeoff. Profit is synonymous with reward in this instance.
How do you make risk calculations in your life and your business?
Have you ever taken big risks with your career path? Have you had the significant loss that can come with high risk activity? Have you had the exciting payoff?
I'll just share a little of my story about how this fundamental principle has played out in my business.
Here are some risky steps I've taken as I’ve sought high reward (a.k.a dolla dolla bills and personal satisfaction) as an entrepreneur.
About 5 years ago, I spent about $700 on a bookkeeping course* with the goal of making just about $10,000 a year (about 3 clients at $300 per month sounded nice to me). Y’all know I make more than that now, but even if I had only made $10,000 a year on a $700 investment, that would have been an incredible ROI.
I decided to exclusively niche in FreshBooks about 2 years ago. That was a huge gamble on my part. Many days it still feels like a gamble for many reasons, honestly. The “reward” from this risky decision is further reduced by the loneliness of being the only one I know that is doing this. I have no peers to really talk about the nerdy nitty gritty, like we have in the QuickBooks and Xero bookkeeping world. But I’m still at the table placing my bet on the big payoff one day from my FreshBooks niche decision.
I created my unique “FreshBooks Office Hours” service because I wanted to find a way to make money in a “One-to-Many” fashion. Lots of members, same amount of work. That’s not a normal business model for bookkeeping businesses. The normal way of operating is serving clients one at a time, right? But normal is not risky and doesn’t usually lead to outsized payoffs. Turns out, at least for me, this non-traditional service is definitely NOT raking in that reward (a.k.a profit 💲) like I thought I would. But you know what, I love doing it and love supporting those few members. So, perhaps my total reward payoff (including personal satisfaction) is commensurate with the risk, for me.
What are some of the mitigations that I’ve put in place to reduce my risk:
I drove for Lyft in the evenings when my husband got home to watch the babies to make myself earn all the money to buy that bookkeeping course because I know that academic research says that behaviors change when you have skin in the game. I could have asked my husband if we could spend $700 of our dollars to buy that course. He would have given me the thumbs up. But do I think that I took the course material more seriously because I actually went and earned the money before I made the purchase? Absolutely! I wanted to reduce my risk of being that sad case of buying a course and doing nothing with it.
I named my business Heritage Business Services because I really had a lot of mental hang ups about the word “bookkeeping”. To me, “bookkeeping” conjured up images of little old ladies who were really more like secretaries who made low wages. That word was “risky” to me because there would have been a lot of personal cost to me if I shook someone’s hand and said my business was Heritage Bookkeeping Services. A lot has changed over my business journey, and I’m becoming more comfortable with the word “bookkeeping” and realize that the word can be used in a powerful way when bookkeeping is really what a prospective client needs. Perhaps for you, embracing the word “bookkeeping” could bring the killer payoff, though. It definitely will for some folks who use it well.
What about my Freshbooks niche decision? Well that risk was mitigated by the fact that I could always go just get another QuickBooks Online client. That is a proven model. And I'm still hedging my bets because I've still kept up my requirements for my Advanced QBO ProAdvisor certification each year. Does that make me a little bit chicken? Maybe. Will I take my ProAdvisor Recertification test when it's required again this June? Probably. But it is less because it provides me security and now it's more because I want to be able to still speak knowledgeably about that software when people ask me the differences between the two. However, every moment of non-risky time I spend doing QBO ProAdvisor exams reduces my overall payoff because I can’t be doing profitable FreshBooks work when I’m prepping for the QBO ProAdvisor exams (lower risk means lower reward, remember).
You know another way my risk is mitigated. I'm married to a wonderful man with a stable job and health insurance. He will retire from the Navy in about 3 years. But being married to someone with a W-2 and health insurance is a huge risk-reducer for an entrepreneur. This is a little bit uncomfortable to write because I know this is not everyone's situation but it is a fact of my life. I don’t take this blessing for granted. And the better your marriage relationship, you get the reduced risk without the typical corresponding reduction in reward. A happy home life is a reward that can’t be quantified in dollars, but is very real.
Sometimes you might not be in a season of life where you can take big risks. And that is totally fine. No shame in that. Knowing your own risk tolerance is a sign of wisdom. But every time we make a decision between alternative paths (choosing between a hard client and an easy client, choosing between a job vs starting a business, choosing between hiring vs solo-preneurship, etc), you are making a Risk vs Reward calculation. Remember your Economics 101 class!
Maybe you dream of starting your own business, but think bookkeeping entrepreneurship is too risky because you know you will get stuck at some point (newsflash, you WILL get stuck at some point, so plan accordingly). Well, check out the offer from Gentle Frog. You get the entire QBO course library for as long as you need it and a free hour of one-on-one training each month and can cancel at any time.
Talk about a low cost way to reduce your risk! 👇
Deals Deals Deals
💰 TB4A is offering the BSH community 10% off purchases*. Use code HUSTLE* to grab some funny and sarcastic accounting swag.
Please always send me any news of deals that you hear of that others might benefit from.
Be There or Be Square
📅 Mondays in January: Co-working Hour. Join me each Monday morning to kick-off your week. RSVP - Jan 22 & Jan 29
📅 Jan 22-26: If you are an experienced bookkeeper and are ready to your business - the Ambitious Bookkeeper can help! Join the Bookkeeping Biz Workshops* next week for $27!
📅 Jan 22 - 26 from 10:00-12:00 PST. Mariette Martinez from Master Your Books is hosting a Business Planning Essentials workshop*. This program is geared toward helping you Plan On Purpose in 2024. I’m bummed that I might be too late on announcing this to you. Technically this link takes you to the replay purchase, but if you contact Mariette, maybe an exception can be made because the live sessions haven’t started yet. Otherwise, the replays would still be valuable.
📅 Jan 23: Is This NEW Bookkeeping Certification For You? Learn about the NEW Associate Digital Bookkeeper Certification. More details about this cert on page 12 of this course syllabus.* RSVP in FaceBook so you don’t miss it!
📅 Jan 30: Year-end Cleanup in QBO. Royalwise is ready to help you close out your year and equip you with a toolkit of skills that are indispensable. From reclassifying those rogue expenses to reconciling your bank accounts, if the year end makes you nervous, check out this course.*
📅 Feb 28: Kathy Grosskurth is hosting a webinar: Maximize Your Use of the Banking Center in QuickBooks Online. She has invited our community.
Featured Posts
🌶️ Jill W. shared her troubles with losing her ProAdvisor profile while she worked abroad. Cautionary tale, for sure. Gotta use work-arounds.
🌶️ When you are stumped with your work, what do you do? Leah P. asked this question, and yall shared some great strategies.
🌶️ There were 2 posts asking about personal budgeting apps. What do you use to keep YOUR budget on track? You can also sell personal bookkeeping services to clients. Join the conversation HERE and HERE.
Help You Hustle
💪 So, do you want to know how I work from inside my car. I share my tech set up for my mobile office. But also…should any of us really be working from our cars in the first place? Please knock my argument.
💪 Have you heard of the Accountants Law Lab*? If you’ve ever thought about working with law firms, this is the place to get support. Law firm accounting is not the kind of bookkeeping you can do without specialized training (hello, trust accounts!). These legal experts had me on their Accountants Law Pod podcast recently though my episode is not about legal accounting at all, but about marketing. This is a must-subscribe podcast if you are going to serve law firms.
For Fun
😹 If you liked the sarcastic accounting swag and clothing* from TB4A, you should check out their instagram account.
My Family Circus
New section of this newsletter for 2024. Completely non-bookkeeping related. It will be a short blurb about topics related to how we manage our family/marriage/house/LIFE! My self-imposed goal is to keep it under 200 words.
🎪 Practice Public Praise
I’m about to write something in the next section that might seem critical of my husband, so before I do, I want to share a marriage/life tip that I strongly believe in.
When you spend a lot of time with someone, you see all their flaws. It can be easy to criticize them when you get into a bash session with negative people. But if you make yourself compliment your loved ones in public, it is a lot harder to stay mad them. It is harder for your brain to focus on the negative if you tell your friends things like
“Man, my wife is awesome and way smarter than me. Guess what she just did at work/home/school/job” (who cares if she isn’t as smart as you at everything).
“I’ve gotta pass on drinks tonight because my son is cooking us a great meal tonight” (who cares if it is spaghetti sauce from a jar, which is what I serve my family).
“I don’t know why you are gushing about Ryan Reynolds at QB Connect. My husband’s butt is way cuter than his” (who cares if it is saggier than it used to be).
The point is the practice of public praise out loud. The particular topic is irrelevant. It’s hard to stay mad at someone when you’ve just told others something nice about them.
Kate Builds In Public
🎢 So, we had a holiday Monday, a “snow day” on Tuesday, and I had at least 1 child home sick on Wed, Thurs, and Fri. In case you were wondering, only the Monday holiday was anticipated in my calendar.
I’m really having to mentally choose to look on the bright side of this week. My pipes didn’t burst. My kids are on the mend. I’m still intellectually capable of helping them with their missed elementary school math and grammar lessons.
But golly, that bitterness is banging at my door. Because, I run a serious, big girl company, right? I make important financial contributions to my family. I have clients that count on me. I’m important and what I do is important and everyone better recognize it! Ya hear that! 📢📢📢
But guess which of the two of us parents gets to shoulder this burden…the cute little SAHM with the cute little WFH hobby business, says the bitter voice in my head.
My husband is wonderful, and such a hard worker, and would do anything I asked of him. He certainly does not make me feel like my business is a hobby. But when the family schedule gets derailed, who gets to shoulder the calls from the school and handle the doctor appointments? Yours truly. The one who does not have the 9-5 and answers to their employer.
In my mind, I know it makes sense. One of us has to do it, and the logical choice is me. I’m ultimately the one in control my emotions. I can tell that nasty bitterness it is unwelcome in my head and home because bitterness only hurts me.
But it sure is an internal fight.
🎢 New Business since last update
3 new FreshBooks Office Hours Members
3 clean ups ($5,336, $4,065, and $1,289)
More hourly training clients on FreshBooks than I can count. Holy moly, the business world needs us right now! Remember to always keep your January’s clear for work opportunities, y’all.
🎢 I published a “Year End Checklist For FreshBooks” downloadable resource to capture prospective client email addresses. I’m proud of getting the email capture and download automation set up. That resource helped boost me to over 300 emails.
🎢 Remember when I told you my new tax friend Drew and his Hype Man Vinny? Well, I got to have lunch with Drew as a part of my goal to have 52 lunches in 2024. Golly, I didn’t want the conversation to end. To sit across the table from someone who “speaks accounting” and “speaks entrepreneurship” and “speaks I-don’t-have-it-all-figured-out-either” is…well, the adjective escapes me. But I highly recommend asking someone to lunch. There are 30k, people in our Facebook group, y’all. Surely someone lives near you.
Also, who in your life have you hyped up this week? Have you been a Vinny to a Drew in your life?
From The Vault
⚡ If one of your goals for the new year is to get your own clients - check out this video about getting clients on Upwork. Two industry experts share their experiences using Upwork to build their businesses (one of them is Serena Shoup - who is hosting The Bookkeeping Business Workshops*) and tips on using Upwork.
Letters To The Editor
✉️ Jessica A. shared this in Facebook:
I get a lot of newsletters in my email, and this is the only one I read consistently from salutation to closing! The transparency and value you offer is unmatched. This week’s topic about the feelings and emotions that come along with entrepreneurship was so on point! Thanks for the vulnerability of sharing the lows with the highs - it’s so nice to know when you aren’t alone!
Classifieds (Clickable)
Want to have an ad in the Bookkeeping Side Hustle Pub? Click HERE for more info.
Keep hustling!
Kate
-Chief Hustler-
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I am down right rabid about transparency and full disclosure. If a link has a * beside it, it means it is either an affiliate link where I might receive compensation if you make a purchase, at no additional charge to you. Or it could be a tracking link that another business provided me to see how many readers click on that link.