Why Money is Relative in Your Small Business

freelance
Written By Lexi Wright

When you decide to start a side hustle or start your business, chances are the content that shows up for you on social media will start to have some themes. The algorithms on Facebook and Instagram and TikTok are really, really smart. So if your feeds are suddenly flooded with small business coaches and people talking about how much money they make doing their side hustle, then congratulations, you might be an entrepreneur. 😉

Some of the content that might start showing up for you are things like:

  • “How I made 300k in 6 months and quit my full time job”

  • “How this easy side hustle replaced my income”

  • “My business got to 10k months in just 90 days”

  • “How you can make good money working just 2 hours per day”

Sounds pretty sexy, right?

I’ll definitely agree with that. Content like this is meant to speak to the opportunistic “find a quick fix” part of our brains. And some of these side hustles and business ideas are actually pretty cool.

But here’s what you need to know about them.

  1. Non-specific statements about income are relative

    If someone is stating an amount of money, like the “10k months” for example, they aren’t giving you enough information to know what this actually means. Are they profiting $10,000 per month? Are they doing $10,000 a month in sales? $10,000 in revenue? It’s just not enough information to know what this actually says about their business. Some people will claim to be doing 10k months, but that actually includes other types of income as well.

  2. Everyone’s financial norms are different

    If a content creator is telling you they “replaced their main income” or their “full-time income” or saying that they “make a living” from their business or side hustle, this can mean a lot of different things. Replacing their full-time income might mean they made $30,000. “Making a living” could literally mean anything. Everyone has different amounts of debt, income levels from their spouse, monthly expenses depending on where they live or how many kids they have, etc. So what is “good money” to someone else, might be a drop in the bucket for you. We can’t assume to know what someone else’s financial standards are.

  3. There’s a lot of behind the scenes they aren’t sharing

    Every business has expenses of some kind. And as your business makes more money, as a general rule, expenses also increase. This is why net profit or net income is a much more meaningful number than sales revenue or gross profit. If a person is making $300,000 in their business, but their expenses are $250,000, all of a sudden that number is a whole lot less attractive. Expenses like employees, software, shipping, product inventory, rent, marketing, and HOW they started their business matter. For example, if they are claiming to have made a large amount of money just by posting in their Facebook group or going live on Instagram, or sending an email to their email list, chances are they already had YEARS of work going into building those audiences. They didn’t just wake up and do that after a month of work. I absolutely believe there are good, easy, low-maintenance ways to make money out there, but it’s important to recognize if it seems too good to be true, it most likely is.

  4. Are they trying to sell you something?

    You’ve probably seen some kind of blog on Pinterest or a post on Instagram of a business coach telling you they can teach you how to make gobs of money if you buy their course and learn all their secrets. That kinds of thing seems to literally be everywhere these days. And that’s not a knock on courses. You can learn a lot from courses - heck I’m trying to produce a course myself, and I will be totally transparent with you in that. But it’s also important to know the person’s experience and expertise that you are buying a course from. Are they successful because they know how to sell courses? Are they making all their money from coaching other people about how to become business owners? Or do they actually have relevant experience doing what you want to learn to do?

Look at Starting a Business like a Triathlon

When you are starting your business, it’s important to move quickly to take advantage of your momentum in the building phase. It’s easy to be distracted by things and let self-doubt creep in when you are in this phase and that’s what kills more small businesses than anything else. If you can get through the sprint of the business starting phase, then the rest gets a lot easier. Looking at this like a triathalon, the business starting phase is the first leg of the race. You have to be fast to even have a hope of being in the race in the next leg. Falling behind or stopping during the first leg puts you out of the race.

When you get past that first leg, you can stop sprinting (or swimming if we’re being technically correct.) You can then settle into a pace that is more sustainable. When you’re in the first leg and sprinting, you’re spending every spare minute devoted to building your business. When you get to the next leg, it’s all about finding things that work for you long term, that you can maintain in your regular life. If you try to keep sprinting in leg two, you will likely encounter burn out and again, have no chance of getting to the third leg of the race. Finding the things that come easy and naturally to you in the second leg is what helps your business grow. Allowing yourself to find a steady pace - you’re still running, you’re not stopping - but that allows you to easily maintain alongside the other important things in your life is what keeps your business growing here. And then in leg 3, you’re going to get to the phase of business that when you started the race, you couldn’t even imagine. We’ll talk more about that another day!

Eliminating Distractions

So if you are struggling to keep pushing forward building your business because you get distracted by other ideas or are feeling self-doubt, I would encourage you to audit the messages you are allowing to speak into your life. We are all easily impressionable creatures. If the voices you are listening to are causing you to lose focus on your business or to doubt it’s the right direction, then those voices need to be removed.

Unfollow people.

Change the podcasts you listen to and books you read.

Stop letting friends give you business advice.

Keeping the faith and staying the course early in your business is what allows you to reach those next levels and experience the benefits of being a business owner who gets to call the shots about how your time is spent. If you catch yourself comparing your business income to other people online - or offline - remember that you don’t know their situation. It’s a much better use of time to get clear about what your money situation is and what your own income goals are than listening to the incomplete stories of other people.

Ready to get your next freelance client?

You can find support, resources, and guidance in our Facebook group Purposeful Scaling Freelancers as well! This is a free community of people committed to starting or growing their freelance business to support their ideal lifestyle, bring them purpose, and provide an income.

Lexi Wright
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