700: Tips for Managing Inconsistent Income As An Entrepreneur

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1:15So happy shopping. It is really hard to be creative. If you do not have safety and security from a financial standpoint, it's impossible to think I'm just going to experiment or try this new idea or spend time learning this new thing. If you are in a place where you are just focused on making ends meet. Hey, my name is Jenna Kutcher and I am obsessed with all things business, marketing, numbers, and helping you to navigate both the messy and the magical seasons of this thing called life. I'm a small town mama who took a$300 camera, grew a successful photo biz, and now I work from home and run a seven figure online business.

1:51I teach you the tried and true secrets to building a career you adore. Shy away from the real talk? No way. Money, hardship, growth, loss, and marketing are all topics we discuss here. Think of this as your one-stop shop for happy hour with a gal pal mixed with business school. Pull up a seat, make sure you're cozy and get ready to be challenged and encouraged while you learn. This is the Gold Digger Podcast. Today, we're diving into a topic that many of us can relate to, which is managing inconsistent income. If the fear of not having a consistent paycheck has held you back or made you nervous to make the leap, or if you've navigated the tumultuous waters as an entrepreneur or a side hustler and recognize that there are different seasons when it comes to your finances, you are not alone.

2:36Whether you're a freelancer, a creative professional, a small business owner, or a side hustler with big dreams, we all face this reality at some point. And more often than not, we face this reality on a year by year basis. But worry not, today we're going to dive into some practical tips and strategies to help you navigate the waters of inconsistent income while also keeping your sanity intact. Let's real quick take a moment to acknowledge the emotional roller coaster that entrepreneurship can be. One day you're popping champagne and celebrating a record-breaking month, and the next you find yourself rationing ramen noodles while waiting for your next big break.

3:12It is enough to make anyone's head spin. But here's the thing. I firmly believe that with the right mindset, a dash of resourcefulness, and a sprinkle of financial wizardry, we can tame this wild beast called inconsistent income. So grab your favorite beverage, find a cozy spot to kick back, and let's dive on into some actionable tips that will help you build resilience, maintain stability, and keep your creative spirit thriving even in the face of uncertainty. Let's do this. Recently, my team went down to a four-day work week so we can spend more time in the sun and less time in front of screens.

3:47In order for us to be able to do that, we have to work smarter and not harder. That's why we're so excited about HubSpot's integrated AI tech. It's helping teams like ours automate the more tedious parts of running a business like doing research, summarizing information, writing copy, and more. Recent research shows that marketers are already slicing time spent on admin tasks in a half thanks to AI from five hours to two and a half hours per day. Just imagine with all that extra time, you could be joining us with a four-day work week too. Start saving time in your business with the help of the AI power tools built right into HubSpot CRM.

4:25Learn more and get started today at HubSpot.com. This episode is sponsored by BiOptimizers. They have so many incredible products to optimize your digestion, brain, and gut health, but my favorite is Magnesium Breakthrough, which contains all seven forms of magnesium designed to help calm your mind and stay asleep. Get yours today for 10 % off at magbreakthrough.com slash gold digger. Let me first just say, I know just as well as you do that inconsistent income is one of the scariest parts of being an entrepreneur. Before I left my steady paycheck and my 401k and my corporate gig behind and started working from home to be a full-time wedding photographer, I spent months preparing my budget so that I could ensure that every single bill was paid on time, even without having a steady and dependable paycheck.

5:16I wanted to first give you kind of a peek into what my own process looked like over a decade ago when I initially made that leap out of the corporate world and into full-time entrepreneurship and kind of share the lens that I'm going to be giving this advice from because now hindsight is 2020. And I feel like I have been able to pivot and navigate inconsistent income so well over the last decade that I have a few really key takeaways. But I think context is key here. So first, let me share this. When I first made the decision that the corporate job was no longer for me, and I wanted to figure out a different way, and I landed on wedding photography as that vehicle out of the nine to five, I gave myself an entire year to make that transition.

6:02I believe, and I've met both sides of the camps of this thought that there are two types of people. They're the people who are the jump in the net will appear type people who are like, hey, I'm out. I want to figure this out. I'm just going to go for it. And then there are the people who like me want to have that safety and security before they make the leap. They are the people that are knitting their little net very patiently and thoughtfully before they make the leap. That was me. So that year of time where I was working my corporate job, working 50 plus hours a week, and then on nights and weekends working on starting and growing my business, that was a crazy year.

6:40You know, it's interesting because these days there is a lot of feelings and emotion around this idea of hustle culture. And while I do not subscribe to hustle culture, I do believe that hustle is required at different seasons of your entrepreneurial journey. The problem I have with hustle culture is when it doesn't end, when the hustle is just innate and you are always striving for more. But when I look at my own journey, there were absolute seasons where hustle was a requirement. It was your ticket for admission into the life that you wanted. And so when I look at that first year of working my corporate job, showing up, not groveling, doing my best in the office and then going home and building my business behind the scenes.

7:21It was a busy year, but it was entirely worth it. I knew that if I could match my salary, I would have the confidence to hand in my two weeks notice, the confidence to tell my parents, Hey, you know, that job that I thought was my dream job. It's actually not. I would have the ability to float through an entire year and figure out what was next. And that gave me the confidence to finally submit my two weeks notice letter and leave that job behind. Now, I want to just give you one thing that was so life-changing for me before we dive into the nitty gritty, because there is so much fear around entrepreneurship and making the leap or pivoting or changing your brand or changing your business model.

8:01And one thing that has been a tool for me that I have used time and time again is getting really honest about what is my worst fear here In this scenario, my worst fear was, is that I would leave behind a great job and a five-year plan and start a business and that business would fail. And so what I did even over a decade ago is I wrote down my worst fears. And then I wrote down an action plan of what I would do if those worst fears came true. For me, in the instance of being afraid of my business failing, I wrote down, I would update my resume. I would apply for new positions. I would reach out to contacts.

8:41All of a sudden, that fear wasn't as scary. I had knowledge and experience and resources and humans in my life that would support me if that happened. And that fear kind of lost its grip on me when I actually created an action plan. And so if you are someone who is really, truly afraid of diving into entrepreneurship because of the inconsistent income piece, I think it is a really powerful practice to write down exactly what your worst fears are. And then write down what would you do if they happened to you? And the best part is, is that most of the time they don't happen to you. Now, while I'm talking about fear, I do have to say that the benefits outweigh the risks.

9:24When I look back over the last 12 years as an entrepreneur, not a day goes by without me relishing in the fact that I get to make my own schedule, that I have freedom and flexibility, that my family gets to do life together, that my husband was able to retire and become a stay-at-home dad and be with our children all day, that I am in control of how much or how hard I work, that I have been able to pivot into different areas and different work over the last decade. There are so many benefits to this that to me personally outweigh the risks. And so let's dive in and talk about how we can navigate the sometimes tumultuous waters of inconsistent income as an entrepreneur.

10:05If you are ready to take control of your finances and gain peace of mind and stay organized in the face of uncertainty, keep listening. So tip number one is this, create a budget. So before I graduated from college, I actually had to take a personal finance class. I wish that this course was a requirement for ever human on planet earth. Because inside of this course, I had to write down every single possible number. I had to be honest about how much was I going to earn? What taxes were taken out? What was I contributing to my 401k? What were my student loans? What was my monthly rent? What were my expenses?

10:47All of these things. I had to literally go through my bank statements and write down everything that I was anticipating spending money on, everything I had been spending money on, and account for every single penny. It's really funny because my mom recently retired and she had to hand back her work laptop. And she found the file of my personal budget that for some reason I decided to send her even though I was 22 years old. And she sent it to me. And I just was like really proud of that version of myself who was looking at life through this lens of earning$50 ,000 a year out of college, which was such a blessing, and paying off my student loans as quickly as I could, and funding a wedding, and all of these different things that I had on my plate during that season of life.

11:35But it was really cool to see how I had thought through everything. I even had a budget for going to the movie theater, which is kind of laughable because I can't remember the last time I've been to a movie theater now as an adult. But I literally itemized every single thing. And so creating a budget can be a really great way to just get really open and honest and candid about your numbers, your expenses, where you're at, how much work you need to do in order to feel safe and secure. And so you want to first start with your essential expenses. So essential expenses include housing, utilities, food, gas, healthcare, debt, insurance, education.

12:12Let me tell you with every financial expert that we've had on this podcast, every single one of them has talked about how people even just have a fear of diving into the numbers. And I can tell you, there is so much freedom when you get really honest about where you're at financially. So starting with your essential expenses, these are just things that cost money that you are going to have to be able to pay for on a month to month basis. Now on top of your essential expenses, you want to allocate funds for irregular expenses and emergencies. Irregular expenses include car maintenance, home repairs, medical expenses, vet bills.

12:50And then you can also think about things like gifts, celebrations, vacations, taxes, milestones, different things that are going to be in your life. When we were young, we dreamed of castles and fairy tales. And as we grow up, those dreams might shift into building something real, like starting a business. You need a website, payment systems, a logo, and a way to reach customers. It can all be overwhelming and confusing, but thankfully that's where today's sponsor Shopify comes in. Shopify powers millions of businesses around the world and 10 % of all U.S. e-commerce from big brands to folks just getting started.

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15:07This is important here because a lot of times what happens when we do a budget is we're just looking at our month to month, but we're not thinking outside of the box of where other expenses can crop up. Whether your dog has to go to the emergency vet or you get a flat tire and all of a sudden you've got to replace all four of them. These are all things that have happened to me in my life. And so having some sort of fund to set aside for irregular expenses and emergencies can be a game changer. Now, the next thing that I highly encourage you doing today, if you haven't done this already, is to create a separate business account for managing income and expenses.

15:43Trust me when I say this, you will thank yourself for doing this when tax time rolls around because it will be clear exactly what your business brought in, as well as exactly what your business expenses were. So many times when we are starting our business or we're starting a side hustle, we mix everything together. And let me tell you at tax time, you are going to be berating yourself because it is so frustrating. It is so unclear. You're not totally sure what your business did. You're not totally sure what the expenses were. I will never forget one year. I forgot to total up my mileage as a wedding photographer.

16:16And so I was literally going through my blog and remembering, okay, this person's wedding was at the Milwaukee Art Museum. That was 60 miles from my house, 60 times 2, 120. Calculating mileage like that, I was so mad at myself. I'm like, there are easier ways to do this. And so having a separate bank account is something that takes maybe an hour to set up, but it's something that will save you so much time. And it will give you the insight and data that you need to run your business with confidence. This is like a CEO move, even if you don't feel like a CEO yet. Go make a separate business bank account today and start having that as your landing pad for all things business.

16:57Another thing when it comes to budgeting is there are so many tools and apps to simplify your tracking. So like I said, when I was tracking my mileage, guess what? There is an app for that now. There are so many different resources that can help you track everything as a small business owner. Even if it might feel insignificant, it is so important to track everything because this is going to give you that foundation to understand, is this business viable? Am I bringing in what I think I am? Is there opportunity to cut down on expenses? So here are some things that you should be tracking as an entrepreneur.

17:31Operational expenses. So looking at if you have an office, rent or mortgage payments for your office, utilities, office supplies, software. We recently had to buy a new printer. That is a business expense. I am printing off things for my business. If you have employees, it is so important to track expenses related to their compensation, their benefits, salaries, training, anything that goes into anyone that is working for you. If you are advertising or doing any sort of marketing campaigns, having all of your ad expenses and ad costs, looking at things like business taxes, income taxes, sales taxes, payroll taxes, you get the point.

18:07There are so many different taxes. So again, Again, having a separate account is so important. And then making sure that you are using the tools that might help simplify the tracking of all of the different expenses. There are so many different tool recommendations. We use QuickBooks in my own business, but there are other places that you can utilize to help you get started. There's an app called Capital, which is with a Q. I know my sister uses this one. It's a great app for budgeting and looking at things like your net worth. There is Rocketbook, Acorns, Every Dollar Good Budget. A very simple search will guide you to figure out what sort of app or resource or software can help support you when it comes to budgeting.

18:48But if you have not created a budget or you do not have awareness around how much money are you making? How much money are you spending? That is absolutely step one. Literally go to a Google search bar, type in how do I create a personal budget? And you can also create a professional budget. this is something that I think is a really good place to start. Tip number two is so important. Diversifying your income. I recently saw this meme on Instagram where I was just saying, if you have only one revenue stream, you are far too close to having none. And I feel like that hit deep because so many incredible entrepreneurs that I know, they have a business that sells one thing, whether it's a product, a service, or an offer.

19:33And if something were to go wrong, like say a world pandemic, that could totally change their livelihood, impact their legacy, impact everything. And so it is so important that we start to think about how we can diversify our income. This is not going to be your first step as an entrepreneur, but I want for you to walk into your entrepreneurial journey with your eyes wide open, already thinking about other opportunities that you can utilize to have a more diversified income and more income sources. There was a really big wake-up call moment in my life and business where I found myself promising myself that I was going to figure out different ways to make money.

20:15I don't want to go too deep into this story, but I was about five years into my wedding photography journey. We had already experienced one pregnancy loss and I was experiencing my second pregnancy loss. And I got the news that our pregnancy was no longer viable. And the next day I had to go shoot a wedding. And I remember this just God awful feeling of like, my body is betraying me. I want to be in the fetal position. And yet I need to like show up and be incredibly happy and joyful for this incredible couple while my internal world is falling apart. And in that moment, it hit me that I had built this business that only made money when I was operating.

21:00If I didn't show up, I didn't get paid. And it really hit me then that this isn't a business. This is a job. I've created a job for myself. And in that moment, I recognized this deep need to figure out different ways to do things, but also figure out ways to diversify my income, ways to make money while I could step away and have a human moment. Because in that moment, I felt so trapped by what I had built, which was an incredibly successful business. But I knew that I had to figure out a different way. You might have heard this statistic before, but the average millionaire has seven revenue streams.

21:38And when I learned that on top of my own personal experience of navigating pregnancy loss in the midst of a busy, busy work season, I wanted to figure out. I said, if the average millionaire is seven, I'm going to make eight because I am an overachiever at the core. According to TrilliumFinancial.com, as a goal, small business owners should try to diversify your business to the point that no single customer or offer is responsible for more than 15 % of your revenue. That way, if something happens and you lose that customer or that product or offer, you have other things to fall back on. I will gander to bet that the vast majority of listeners do not have other opportunities that are earning them income.

22:23So let me first share ways that we've brought in income in the last decade and how I diversified from being just a wedding photographer. I tell this story in my book, How Are You Really, about how I started watercolor painting as an aversion during a burnout season of my life. That turned into a print shop, which eventually ended up paying our mortgage. I also started taking on influencer work, so sponsored content on different platforms. I got really serious about affiliate income and leveraging selling other people's product services or offers in order to bring in additional revenue. I became an Airbnb owner and we have a few different properties that we now rent out.

23:07We have investments that are earning us money while we sleep and we are not managing them. I have podcast sponsorships. I have online courses. I've done one-on-one coaching. I've done a mastermind. I wrote a book. I am always trying to explore different ways that I can diversify my income. Not only does it give you more earning potential, but it also takes away the risk or feeling of uncertainty. And it also eliminates that feeling of feeling stuck, right? As a wedding photographer who's now trapped, I didn't have anywhere to turn. If I had diversified my revenue sources, I could have stepped away from that portion of my business and still had stability and security.

23:45So if you are someone who is listening to this and you're finding yourself not loving what you're currently doing and wanting to try something new or move in a new direction, my one piece of advice is this. Do not abandon what is currently working for you. If you have a way that you are bringing in money, income, revenue, do not abandon it. I think in this culture, we are so quick to be like, I changed my mind. I'm out. I don't want to do this anymore. Use what is working for you. Figure out your bare minimum, what I call your enough point of what you need to earn to have that safety and stability, and then focus on freeing up your time in order to explore what's next.

24:23I have an entire chapter about this in my book. If you want to go to jennacutcher.com book, I talk about your enough point and the importance of that. But what happens here is if you're finding yourself where you're like, I can't imagine doing this five years from now, 10 years from now, I need to move in a new direction. Use what is currently working for you. Make sure you have your safety and stability covered with the income you're bringing in through that. But focus on freeing up your time because there's no way for you to explore what's new, what's next without having the time and energy to do that.

24:54And so focus on time being your currency so that you can start investing your precious time into whatever your next move is. You can't dig your biggest goals without a little hard work, which is why I bet you'll love listening to the Hustle Daily Show brought to you by the HubSpot Podcast Network. Hosted by Zachary Crockett, Jacob Cohen, Rob Litterst, and Juliet Bennett, the Hustle Daily Show brings you a healthy dose of irreverent, offbeat, and informative takes on business and tech news. With short 10 to 15 minute episodes released every day, you're bound to learn something new this week from updates about meta and AI to how Domino's is flipping traditional pizza delivery on its head.

25:35Listen to the hustle daily show, wherever you get your podcast to stay up to date on what's going on in business and tech. Did you know that there is one phase of sleep that almost everyone fails to get enough of. And this one phase of sleep is responsible for most of your body's daily rejuvenation, repair, controlling hunger and weight loss hormones, boosting energy, and so much more. I'm talking about deep sleep. Why don't most people get enough of this one most important phase of sleep? A big reason is magnesium deficiency. Get this, over 80 % of the population is deficient in magnesium. And magnesium increases GABA, which encourages relaxation on a cellular level, which is critical for sleep.