27 Part Journey to Starting a Side Hustle — Day Five
The Profit Equation
Expected Income — Expected Expenses = Projected Profic
This first part on this chapter talks about the basic principle of how to make a profit. It all boils up to one simple equation. Don’t spend more than what comes on in. Kinda sounds like a strategy for losing weight. The majority of the chapter utilizes an example about renting cars via Turo. So, since the math examples really wont work out for me, let’s analyze what my expenses and potential profits will be for each equation. Since I want to start low, and I’m really just trying to start with “fun” money, I’m going to be very conservative with my estimates. I don’t want to get too excited and over reach and then when things go sideways, I get let down with the actuals. So, in order to minimize the let down, let’s just go with real numbers that I can expect.
Cyber Consulting
My professor at Wash U made 15,000 a week doing pen testing for companies. While that’s an excellent goal, It’s not realistic what I should expect coming into this new. I’m not really sure how to price out this service. I can go an hourly rate route where I charge say 50 dollars and hour for a service. I realistically would only have about 20 hours a week to spend any of my side hustles. So, basic math would tell me. 1000 dollars a week would be feasible. My challenge here would be getting that initial first customer but I guess that’s a worry for later and I’m hoping it get addressed at a later chapter. Given the math above, I could also just charge 1000 an engagement and if it take less than 20 hours, well then that’s even better. As far as expenses would go, I think the largest expense would have to be insurance. I’ll estimate that I would like to pay no more than 15% of my monthly revenue on insurance. The rest of the expenses will be trivial as I already own computers, software, tools to actually do the job. I’m already trained and certified so I don’t have to worry about those expenses either. So far, I like the numbers I’m seeing. As I get better, I can either up the hourly rate say, 100, 150, 200 and up to 250. I can then also dedicate more hours depending on how things go.
STEM U
I don’t really have an expectation of what I can make here. I want my service to be accessible to as many students as possible, so it needs to be as cheap as possible. Heck, I imagine that a good portion of my service needs to be free just to even have a chance. With that said, I’ve thought of ways to monetize and still offer free services. My initial thought is that I would build a portal where people come to learn. The first lesson or course would be free similar to other learning sites. If you want more, then I would charge a monthly price similar to ABC Mouse. Looks like ABC mouse is 10 dollars a month, so let’s assume 5 dollars a month for my service. I also want to have an educators only section that goes beyond the activity. I’ve meth with a lot of educators over the years and while they are super excited to introduce STEM to their classrooms, the “troubleshooting” content and support that they need isn’t necessarily there. This is where my service would be more unique. I think I can do 10 dollars a month for that since it would take significant more resources and I would have to address a wider array of unknowns. Okay. So basic math . . 5 dollars a month, let’s just start off with 30 students and 10 dollars a month and start off with 30 educators. Additionally, I’d put ads and what not to generate additional revenue. So that leaves me with: 150 dollars a month from students, 300 a month from educators and lets say 50 dollars a month from ads. That’s 500 dollars a month. Now, this is significantly less than cyber idea. . . BUT the main difference is the cyber idea is an active income. I have to go out there and do work every day to get that money. This would be a portal of education. I do all the work up front, and then reap in 500 dollars a month every month without me having to do anything else. Also, this model is allows for exponential growth with little effort on my end. I’m assuming 30 students/educators per month. Those numbers start to look a lot more intriguing once you get to the 300, 3000, 30000 range. Expenses will be web hosting which is minimal. Everything else, I already have.
DIY
This is perhaps the hardest of the three to price out. Everything will be dependent on market value and determining that value may not be as straight forward as the items I plan to make will be more unique to the market place. For now, I’ll keep things simple. I’ll plan on selling items that cost no more than 50 dollars with my sweet spot being somewhere around 30 dollars per item. My ultimate expenses are materials. I can start with sourcing materials I already have, but I’ll have to keep those expenses as limited as possible in order to turn the largest profit. If I can sell 30 items and 30 dollars, then that’s 900 dollars of revenue. I’d like to spend no more than 50% on materials so, I could be spending as much as 450 dollars and making 450 dollars. Comparable to the STEM income, but again, this is more active income. I could create things in bulk and hope that they sell which would then make things passive, but I’ll have to actually try this out before I can make that call. I doubt my wife will want all these things in the house.
Looks like that’s it for today and for this “week” in the chapter. The next chapter start focusing on actions so expect to see a lot more hands on and trial and error results. Thanks for reading and thanks for your support. Can’t wait to share all the details with you!!
