BiggerPockets Money Podcast - 249: The #1 Reason Side Hustles Fail to Become Businesses

Episode Date: November 15, 2021

You’ve heard the old statistic “nine out of ten businesses fail”, but why is that? If there are so many people willing to risk their livelihood to pursue a great idea, why do so many end up broke and back at a job? Gabe Nelson, certified financial planner and business advisor, has an idea. Gabe advises many business owners and solopreneurs through building their businesses with maximum cash flow and minimum time commitment. A couple of decades ago, Gabe was in the position many entrepreneurs are in today. He was working seven days a week, almost living at the office, doing anything he could to build his business. Once his daughter was born, he knew he had to take a step back from the seven-day workweek. Then, his second and third daughter were born, forcing him to automate, delegate, and eliminate every unnecessary task on his plate.  Now, with a thriving firm, Gabe knows what does (and doesn’t) work for solopreneurs, and the systems they need to implement now to secure a happy life tomorrow.  In This Episode We Cover The #1 thing you should do before you start a business or side hustle  Keeping your relationships healthy while working long hours at your business Outsourcing when you’re ready and growing a self-operating team  Laying the groundwork of communication between you and your partner  Managing cash flow in your business and keeping a healthy safety reserve Trusting the “whispers” that your gut tells you about your business And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, show number 249, where we interview Gabe Nelson and talk about entrepreneurship. And it was the best thing in the world for my business because then I was actually forced to be more productive during the day. But it also allowed me to start to really get into being a parent because I was around a lot more. Hello, hello, hello. My name is Mindy Jensen. And from time to time, Scott's schedule is just too darned path. Rather than miss the week, I'm calling on some of my friends to fill in. Joining me today is Dion McNeely. You know him from episode 448 of the Bigger Pockets Real Estate Investing Podcasts,

where he shared the lazy person's guide to financial freedom in less than 10 years. Dion is also one of the owners of Commercial Driving School, a business he grew from six employees to 60 and one location to four. It's safe to say Dion knows a thing or two about running a business, which is why he was the perfect choice to step in for Scott. Dion, thank you for filling in today. Hi, Mindy. I'm such a fan of yours. I'm excited to be on the show. Thanks for having me. I'm a fan of yours, so this is going to be great. Deion and I are here to make financial independence less scary, less just for somebody else.

To introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting, or how lazy you are. I wish I had a Scott Trench impersonation voice, but whether you want to retire early and travel the world, go on to make big-time investments in assets like real estate, or start your own business, which is what you're we talk about today. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Today we're talking with Gabe Nelson, a CFP who specializes in helping entrepreneurs and solopreneurs run their company the best way they can. Deon, I'm super excited to talk to him today because we haven't really focused so much on entrepreneurship. And today, Gabe joins us to give us some advice on how to run your business. One of the things I really like about the episode that we have today, Mindy, and Gabe points us out towards the end is that if you go

to something like a convention or if you hang out at a mastermind and you actually talk to people, sometimes the time that we learn the most is when we're just having a conversation. And talking to Gabe today felt like we were just hanging out, having a conversation where I think both of us actually took notes on some of the things he was saying. So there's a lot to get out of this episode. There really is. Yeah. I feel a little bit seen in some of this episode.

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is a financial technology company, not a bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Foun. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leeners stronger for fitness, the anxious generation for parenting perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful

as its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. Here at Bigger Pockets Money, we believe that there are four main levers you can pull to generate wealth, spend less, earn more, invest intelligently in assets like real estate or the stock market, or create a business. Today, we're speaking with Gabe Nelson, a CFP

who specializes in entrepreneurs and solopreneurs and how to set up your business correctly from the beginning. Gabe Nelson, welcome to the Bigger Pockets Money podcast. Thanks, Mindy. I'm excited to be here. I'm so excited to talk to you. Okay, so Gabe, you're here to give us advice and information about starting a business. So, of course, the first step is to choose a name, build a website, and create an LLC, right? Almost. Actually, the next thing you need to do is you need to go buy either a Tesla or a brand new pickup. That's what you've got to do before you really get going. The- Well, that was easy. The answer's no, but go ahead. That was easy. Okay. So I just have to get a Tesla and then I'm going to be successful because I already have a website. So I ask that in jest because that's something

that I hear a lot of people spending an inordinate amount of time on is, oh, what am I going to call my company? And it doesn't really matter as much as other building blocks that you need to put in place. So Gabe, I want to start a business. What do I need to do? You know, the funny thing is, this comes up quite a bit with my clients. I work a lot with soul openers and entrepreneurs. and the thing that I tell everybody to do is get a paying client first. Do you have somebody who's going to pay you to do something? And if you do, now you have the basis of a business and you really have a business if you can actually repeat what you did so that you can start having revenues come in.

Because if you don't have revenues, you don't have a business. And so I tell everybody, go get clients. It doesn't matter if you're an LLC, an S corporation, a C corp or whatever. start to figure out, can you get clients that will actually pay you to do what you're trying to do? That's a really great piece of advice. Get some clients. So how does one get some clients? Well, I guess it depends upon what their industry is or what they're doing. I mean, a lot of people nowadays are starting businesses as a side hustle. And they might be a graphic designer working for an advertising firm who decides to go start doing some moonlighting, whether it's on Upwork or

Fiver or working for their friends, maybe start with the side hustle piece so that you can start getting things going and actually get some experience and learn what to do and what not to do. And then all those fun things start to come into play like processes and systems and bookkeeping. Bookkeeping is not fun. Bookkeeping kind of sucks, but you can delegate that. But basically, you start to realize, and really, frankly, you start to make mistakes so that you can start to figure out what not to do on the next client and start to build in your processes and your systems. Then those other things can start to fall into place. So that was going to be my question. When you're starting a business and you make mistakes in the beginning, an impact to your cash flow can really slow things down.

and if people started as a side hustle, while they still have their W-2, it's a lot easier to handle those mistakes. But I was going to back it up a step and say, to choose to be an entrepreneur, a lot of people don't realize the time commitment, even growing it as a side hustle, but running the business itself. One thing I've realized about myself is I am not an entrepreneur, I am an investor, because I like the idea of working 40 to 50 hours a week. A lot of people think, I want to be an entrepreneur, so I don't have a boss, so I won't

have to work 40 to 50 hours a week. You're actually going to work 80 to 90 hours a week. So starting that as a side hustle is one of the ways to get used to that extra time it's going to take and having that safety net of still having your job. Oh, tremendous. 100%. I agree with you. 100% Dion. I mean, that's one of those things that not everybody thinks how much work is going to get done. They start thinking about how much money I'm going to make and that vacation I'm going to take and that other things I'm going to do and they don't realize all the work that needs to come in. So that's a tremendous piece of advice is, yeah, you're working your 40 to 50 hours a week. Do you have the capacity to work another 20 or 30 or 40 hours in that week to get this side hustle going or get this business going?

That's something that, you know, each entrepreneur has to have that look inside of themselves, but also they need to have that conversation with their family. I mean, this is a side that doesn't get talked about very often until it becomes a problem. but there's a whole lot of divorced entrepreneurs out there. And there's a whole lot of crabby entrepreneurs because either their husband or their wife is mad at them because they're not home doing what they need to do. And so that's a whole other side that you need to have a conversation with your significant other, your husband, your wife, your whatever, so that you are all on the same page. So that when that time is spent away from your family or your significant others,

that it's actually respected and seen as a good thing rather than a bad thing. One of the things that's made it a little easier for me to invest is being single. I'm 100% on board with what I want to do. Are there ways that you know how people who have a spouse that maybe isn't on board or ways to bring them on board? Or how do you suggest people that want to start a business present it to their partner in a way that doesn't end in divorce, like you mentioned? That's a great question. I actually have a podcast. I'm not trying to give the promotion on the podcast, but I have a podcast.

but I have a podcast on that podcast. I brought on a client of mine who is a therapist who had actually an episode to discuss that. And her biggest piece was start with the communication and that laying the ground of the communication, the groundwork of the communication as to why we are doing this. We have a tendency. I'll use myself as an example, is I have a tendency to think that everything I'm doing I'm doing for my family.

And I feel that way. but when you're not around your family, it doesn't really look like you're doing everything, all this extra work, all this extra time for your family. And so I think what you've got to do is you got to start with that big overarching why, which is used so many places and so many times in the entrepreneurial world. But what is the why?

Why are you doing what you're doing? And you need to make sure that you get your spouse or significant other on that same page as to the why. and that Y might be an extra vacation. It might be paying off debt sooner. It might be a beach condo. I'm reminded of a story. And the story is part of my journey on that entrepreneurial piece. And this is going to help you understand the level of relationship that I have with my wife.

When I first started in this financial advisory industry, I came right out of college, got going in the business, and I was working literally seven days a week trying to build this business up. It was Saturday mornings, even Sunday nights, I was calling people to try to get meetings until a lady ripped me up and down for calling her on a Sunday night. I then, okay, I'm like, fine, I'm getting rid of Sundays. I'm now going to go to Monday through Saturday. And I was working all day, Monday through Friday, on the phones or in meetings on Monday through, you know,

Monday through Thursday nights, Friday nights I would reserve for family time. And then Saturday mornings, I was back in the office until probably 12 or 1 o'clock. Well, about five years later, my oldest daughter showed up. And so my first child and my wife looks at me and she says, you're not working every night. And so we had a compromise that I was going to work three nights a week. Weekends were going to be every now and then, but we went to three. I went to working three nights a week. Monday, Tuesdays, and Wednesdays.

Baby number two shows up. And she looks and says, uh-uh, you're not working three nights a week. I need you home. And so I went to two nights a week. And then when baby number three showed up, I have three daughters. They're 21, they're 18, and they're 15. And when my youngest, her name is Lydia, showed up, she looks and she goes, uh-uh, you're not working any more nights.

You need to figure this thing out. And it was the best thing in the world for my business because then I was actually forced to be more productive during. the day, but it also allowed me to start to really get into being a parent because I was around a lot more. And so, thank goodness my wife was basically telling me, no, no, no, I need you home. You can't be gone. And so therefore, if you can get that other half on board of what you're trying to do, it starts to make things easier. But then also, she gave me the guardrails to keep me from screwing it up in simple terms. Yeah, your wife needs to be applauded for her

communication, her very clear communication. I think this is a problem not just with entrepreneurs, but with people who are in relationships long term or short term, they don't say what they need. They don't say what they mean. And here's the thing, Gabe, if I want you to know something, I have to tell you because I'm guessing you are terrible at reading minds. What am I thinking right now. You have no idea. I have to tell you. I have to tell you I like your shirt. And I think the plant behind you is gorgeous. You don't know that. You have no idea my head is going off in that direction. It's the same thing with, you know, when you're starting to communicate about the job. In your book, you talk about how your wife said, I'm not going to raise the kids by

myself. That's really easy to do. Raising the kids by yourself because your entrepreneur spouse is trying to make it work at the business every day, all day, nights and weekends, all weekend long. I can't believe you had so many phone calls on a Sunday before somebody told you not to call them on a Sunday. And this is the Gabe Nelson's show or the Gabe Nelson episode of the Bigger Pockets Money podcast. So what is the name of the episode of your show with the therapist that talks about this? Oh, boy. Let me look here.

I'll look it up. It's actually like relationship tips from Megan Spahn is what I believe it was. But give me one second and I will look it up. But it was a fantastic episode on really what you just said. You repeated it perfectly is you need as that. other half need to come back and basically say, this is what I need. I need you to be here on these times. And it was very, very clear that I needed to be around. And frankly, I mean, I'll tell anybody, I'm a much better man because of Melissa. I would, I would just be, I'd be all over the place.

And so she keeps me grounded, keeps me in the right place where I need to be. And that actually right out of my book was a true story. She's like, I'm not raising kids by myself. So you better figure out a career that is going to allow you to be around. I'm like, all right, I'll figure it out. I just really wanted to be with her. And at 22 and 23 years of age, I mean, that was good. So I'm not seeing it right now. I apologize on the episode.

Maybe we can put that in the show notes. We will put that in the show notes, which can be found at biggerpockets.com slash money show 249. One of the things I really like is investing or growing a business and at its core comes down to math. You know, buying cash flowing assets to replace your income, to reach financial freedom. We can all kind of understand that. But really, it's hard to identify until somebody brings forth a story. How you related to your spouse, how you got them on board. I'm kind of a Mindy Jensen fan, and I'm impressed that she does the live in flip where she live in, yeah, so she lives at a house

that's kind of a construction zone for months and got her husband on board with that by finding out what is his why, what would make, you know, how would he be able to retire early? How would he, what what would it mean to him? So finding out your why is our job, but figuring out your spouse's why seems to be just as important to get them on board. There's a book I really like, 15 conversations with real estate millionaires. And I like it because it's literally 15 conversations with people who reached real, you know, financial freedom. And so I can pick it up and look at a story from a person's perspective. I haven't caught it in this episode. Can you tell me the name of your book? Yeah, the name of my book is the Solopreneurs Money Manifesto.

It's how to master your finances and create the life you want. And it's written for Solopreneurs and Entrepreneurs. And it's 26 years of my experience in this industry and stories. It's a ton of stories on client stories of what we've done and how we've gone through their lives and impacted their lives and made changes for the better, for the most part. Yeah, for me, that's what I'm looking forward to. So I'm actually going to pick up your book. Those stories are how I relate to it. One of the reasons I became a, it's probably a better way to put this, but a bigger pocket addict is because people like you come in and share their stories.

Any one of us can pick up an Excel spreadsheet and figure out, okay, this is the math to make it work. But hearing how somebody else who has similar challenges, you know, with kids, I've got kids, mine are pretty close to the same age as years, maybe a little bit older, but still not only able to reach financial freedom or to grow up business, but to teach other people how to do it too. So it's commendable that you're doing that because one of the reasons why I'm super excited to be on a show like this is I can only reach financial freedom once, right? I went from a bad position to a great position.

But every time that we help somebody else do the same thing, I get the same emotional dopamine hit from watching them succeed. So if you're helping people growing these businesses, you're getting to do that over and over and over. So that being my motivation, what motivates you to do this? You know, that's a great question. I actually am in the middle of what I call a meeting surge right now. And I take two times a year. I block out two months in my calendar.

I meet with all my clients. And it's four or five meetings throughout the day. They're usually an hour apiece. And they're nine o'clock, 10, 30, 12 o'clock, 1, 3. 33, just jam-packed. And the stories that come about, to dovetail on your story, the stories that come about of helping my clients go from point A to point B over time, it's like you said, when you've achieved financial freedom,

but you can then help other people do it. It just makes you feel great and keeps you motivated. I am just jazzed at the beginning, at the end of each day, from meeting with all of my clients because we're going through their stories. We started some of my clients I've had now for, I started this firm in 2008 and started all the the way in the industry 26 years ago, as I saw a little bit ago, but made some little hops around, went into management and realized I'm a terrible manager of people and basically worked my way into starting my own advisory practice in 2008.

And I've had clients since before 2008 that were with the priorities. firm and actually just got done meeting with a couple of them today. And long story short, she had a crazy cancer diagnosis that came about and thought she was going to lose her arm. She's in the medical profession and thought she was going to lose her arm. She was not going to be able to continue to practice medicine the way that she was able to practice medicine. And so part of that story with her is making sure the family was taking care of if she did not make it. Now, thankfully, you know, great ending of the story. She had another checkup here just last week, fully cancer-free. Everything is great and doing fantastic. But it's the stories that have come

about from helping them build up their finances, making sure that they were prepared and protected in the event that something happened to either of them, of which we had the scare. and I actually refer to it in my podcast. I tell that story. It was a Friday 5 o'clock phone call from the husband telling me that there was a diagnosis and it wasn't good. It was a gut punch. And then we went to work of, all right, you're going to be okay.

If something happens to her, you're still going to be fine. But let's focus on getting her through this. And the neat thing is, is this is her character. And this is what motivates me to keep doing this is the stories that keep developing her character was, I'm going to lose my arm. Okay, fine. I'm going to figure out what I'm going to do next. I'm either going to teach. I'm going to go into management. I'm going to do whatever. Now, we had everything all taken care of. The financial plan was solid. The protections were in place. There was a fantastic disability, income and policy in place.

Everything was in place to make sure that she could have the peace of mind to go, if I lose my arm, I am still going to create myself in another way and continue to go on. That's what motivates me is those stories, they just keep coming up. And it's just so much fun. There is a quote that is actually not true that I use all the time. I've got a point, I promise. I'm sure you've heard this before. 90% of all small businesses fail within the first two years.

And the number isn't quite 90%, but it's pretty high. I mean, I continue to use the quote just because it's an enormous amount of people who try to start a business and it doesn't go right. I think there's a lot of misunderstanding over what goes into starting a business. Like you said, you have to work your 40-hour week, but then that's just the job that you are doing. And then there's the, you know, 20, 30, 40 hours additionally of running the business that you need to be doing as well. what are you seeing people doing wrong that are leading to these big problems that are leading them to the 90% or whatever the actual number is? And what can they be doing to get to that 10% of successful businesses?

Because I have a feeling that, I mean, there are some businesses that are just not good ideas. And there's other businesses that could be a really great idea. It's just not executed correctly. The biggest thing that I see is not. properly managing their cash flow. People start businesses. They start bringing money in and then they spend it all. That happens. That's one of the reasons a lot of small businesses fail is money comes in and they don't really know what to do with the money and where to go. So I jokingly said you go get the

Tesla and the new pickup truck at the beginning of the show. People do that. It's crazy, but people well, I've started a business, I got to have a new truck. Why do you need a new truck? The one you have is fine. It's the management of the cash flow, making sure that they're managing their money, because people generally, if they have a good idea or they have a good product, and they can actually get clients and they can start to repeat that process, that starts to form the business. And then if you can't manage the money when it's coming in, or you're spending it all, or you're not setting money aside for taxes and you're not making those boring decisions to protect yourself, then you have a tendency to run out of money.

And then what do people do? They go to their credit cards, they go to the retirement accounts, they go and they start to drain their funds or they go into debt. And then and only then do they finally either, A, seek help to help them come out of that or they go out of business. And then when they do that, they've now ruined their financial situation, which I see happen, you know, every now and then. And so the biggest thing is, is the management of the cash flow. Once you get it, you have to then run a budget, which budgeting is boring.

It's no fun to do budgeting, but it actually helps protect your business. So you got to get a budget. You got to have money set aside for taxes. You got to have money set aside for a rainy day. And the other thing is we have to remember that you may not make a lot of money in the beginning. So that's the beauty of having the, beauty of having the side hustle is to allow you to be able to start to get the cash flow going so that when you do make that jump, you are on a path to success rather than failure. So two things. I think I've been a part of the 90% that Mindy was talking about and it feels like 90%.

And one of my issues was managing cash flow with one of those times where the business that I started didn't make it. With everything that's going on now in today's climate, Gabe, if you were going to start a business today, you know, you didn't have the ones you have now, which were going to start one, what kind of resources are out there for somebody who wants to start a business that they can go and look into?

Well, first of all, the greatest piece of educational tools ever invented is called Google now. I mean, frankly, Google and YouTube. I mean, oh, my gosh, it's amazing. My three daughters, they can learn absolutely anything faster than I've ever thought about learning. it with Google and YouTube. I mean, there's people like you guys. There's people like me putting

out podcasts on how to do things. There's a million and one YouTube channels and podcasts on how to do everything. So that's the first place that anybody that wants to start something is just start listening, just start watching. There's the old service core of retired engineers and retired business executives that you can go to your SBA. But the reality of the situation is is the fastest and most convenient way for someone to start finding those resources to get the knowledge is in their phone. It's right here. I mean, all they've got to do is fire up a YouTube channel or a podcast and start learning.

There's books. I know I'm not telling you guys anything you don't know, but that's the simple place to start. Then find a mentor. Find someone who was one years, two years, three years ahead of where you want to be, and ask them to coffee, ask them on a Zoom call, whatever you've got to do, start picking their brain. Like, what did you do to help get you there?

So, and what mistakes can I avoid in my path to get there? Now, when we're talking about money, if that's what we're talking about, the resources of money, well, that can be a, do you have equity in your home? I always had equity as my home as an absolute last ditch option. when I started my business, I started August 1st of 2008. 45 days later, layman went bankrupt, stock market drop like crazy.

My business plan was built with revenues of X. My revenues were actually X divided by two. It was like, uh-oh, I got to figure out a way to make this with two staff people come in to help me start my business. And so I had some savings built up. So the big thing I would tell everybody is try to get yourself to six to 12 months of savings set aside to allow you to make that change. Now, if you don't have that, well, then you got to start to get resourceful.

Do you have a family member that's willing to kind of help you, which is a bit scary in itself? Do you go to your credit cards? There's tons of success stories of people who've started their businesses and run them on credit cards. But there's also way more failures that have happened that people have ended up in debt. Some people will go to their retirement accounts and start draining part of their old retirement accounts, which does happen. And frankly, I have no problem telling you, I had to go to my 401k to help my family maintain survival as well as keep my business afloat. And I knew I was not going to fail. I knew that was going to be okay, but it took a while to climb back out of that. And so that's the

crazy thing. You look at a financial advisor who started a business, there's a good share of us that have used our retirement accounts to keep those babies afloat when we tell our clients not to do it, but the reality is so sometimes that's the only place you have. I'm seeing a lot of parallels between starting a business and running a real estate investing endeavor. And this is, you know, this is bigger pockets money, but we are from bigger pockets, which is all about real estate investing. And I'm telling people over and over again when you're going to start hosting people, when

you're going to start owning rental properties and giving, providing people a place to live, you need to have a reserve fund because something's going to start. happen. And the cost of that thing is inversely proportionate to how much is in your reserve fund. If you've got a very well-funded reserve fund, something's going to break. It's going to be like a light switch or something. But if you don't have any money, guess what? Now you need a new roof, a new furnace in the middle of winter, a new air conditioner in the middle of summer in like Florida, where you're required to provide this. So I think this is very interesting. These same ideas that you're sharing are the same things. I mean, running a real estate investing endeavor.

is a business. And I think a lot of people don't necessarily treat it like a business or like the business that it should be. Six to 12 months for a reserve fund before you jump into your entrepreneurship endeavor, I think is, I really think that I would like to say that's a must, not a nice to have, you know, especially if you're choosing to do it where you chose to leave your job and start a company, as opposed to losing your job and starting a company, you know, in that regard. So I think that if you're starting a company, if you're choosing to do this, absolutely agree that the side hustle is the greatest because you might discover that you hate what you're doing

and you just left your job and you put all, you jumped in with both feet and now you're like, ooh, now I got to do this for a while, I bet I don't like it at all. Or you could discover that nobody wants what you're selling. It could be a really, really great time to be a typewriter repair man, or it could be 2021 where nobody uses typewriters anymore, and there's maybe not such a big market for your product. So I love this. I love this advice. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening.

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We'd love to talk. Business. So one of the hardest things for me, Gabe running a business, was learning how to work on the business instead of in the business. At a truck driving school, I was an instructor, and I loved instructing. but if students aren't signing up, there's not a lot of work. So I learned how to find students. And so my partners had to basically drag me kicking and screaming from the work to working on the business.

When do you think it makes sense when you're starting a business to start hiring staff and training staff to take over tasks that we're doing ourselves? Because we know the business, we're growing the business, and we want to think we're the best at doing it. But if you're doing the work, you're not growing the business. That's a great question. And the biggest indicator that I've told people and where I noticed it was when you start missing stuff for your kids, or you start missing stuff for your spouse, or you start missing things, you better get somebody on. I mean, you've got to start doing that.

Now, when you are that busy, you need somebody. That's like a, you know, that's kind of like the slap in the face that you got to have that person. And I remember starting out in the industry. People are like, hire before you need them, hire before you need them. But guess what? There's this thing called cash flow. Cash flow has to happen to be able to pay somebody. But the beautiful thing about the way the employment world is today is you can hire a virtual

assistant. All right. And I'm a huge fan of virtual assistants. I have two of them. I have one in Texas and I have one in Ohio that support my practice. They're by independent contractor companies because I want to live the sole opener life with my practice and my business. And what I've learned over the course of the last few years is there are,

tons and tons of virtual assistance out there that can be experts in what you need, that you can then outsource that work to. And it's not, we're not talking, you know, an immediate payroll hit of two to three thousand dollars a month to your cash flow. We're talking, you know,

maybe you find somebody even at $25 or $30 an hour and they free up five hours of your week. Okay, so we're talking 125, 150 bucks for a week to allow you to then focus on just working on your business. if you can bill out at more than $150 for that whole time period, which you probably can, then your money ahead.

And so I'm a huge fan of outsourcing to experts to take care of everything that needs to be done so that you can focus on what you're really good at and also focus on working on the business. And so it's a long answer to your question, Dion, but the slap in the face is generally what happens because most of us entrepreneurs, we go until we get slapped in the face. is what we do. And then we make the change. But what I would say is if you start to realize that you're not, you're seeing things in your business that are starting to bother you. And it's weird how the whispers work and how our gut works. It starts to tell us that things are wrong and things need to be fixed. And so I tell any one of my clients and even my friends, trust the whispers. When the

whispers are coming, that means something needs to change. And so when you start to notice, I hate doing this, like emails. I don't touch emails. My, my, my, assistant goes through, takes care of all my emails, gives me the ones I'm supposed to deal with. I spend maybe an hour a day maximum on emails, which could be three or four or five or eight hours a day if I let it. And so my goal is to get it to 30 minutes a day of only doing emails and only the most important ones, because that is the biggest time suck in the world that keeps you from working on your business. That is so true. So outside of email, what are some other things that people can outsource. Like, how do you figure out what to outsource? Because you could,

I mean, if you're an entrepreneur, I don't want to talk smack about entrepreneurs, but if you're an entrepreneur, you're probably a control freak. So how do you learn to let go? How do you figure out what to give control to somebody else over? That's an awesome question. And the simple piece is take a piece of paper and a pen and set it next to your work. station, wherever you work, and write down everything you do in a day. Literally, did you check your email? Did you do this? Did you calendar? Did you send an email that says, here's a link to my calendar? Or did you email back and forth 87 times with someone to schedule that appointment with them or whatever it might be? Write down and do an audit. And all it takes is one or two days to do your audit.

Now you have a list of everything that you do and figure out what are those things that you really need to do and what can you outsource, what can you offload. Now you're starting to build a, for lack of going to put it, a job description and start to figure out what is the lowest hanging fruit that you can get rid of. If it's email, if it's calendaring, if it's managing your schedule, which is calendaring, if it's paying bills, you can outsource that to your accountant. Have your accountant pay your bills. So I think it's great that you brought up the, you know, tracking your daily.

time, what you spend your time doing. I'm one of the teaching assistants in the bigger pockets real estate boot camps. I'm doing my second one right now. And it's really cool. One of the first things that we do is go through a time tracker and realizing what you're wasting time on. And I hear Scott Trench say this a lot. So it's probably not his quote. But I'm going to, mentally it goes to him. But if you don't measure something, you can't improve it. And as soon as you write something down, you can actually start seeing numbers that you can change. So that's huge, especially for somebody running a business. I'm the same way. You've opened my mind doing this. I looked at my phone. 8,200 and something unread emails. So one of my co-workers' new jobs in the future

is going to be going through and finding out the ones I need to look at and making sure those are the only ones that I see. So I'm glad I was here today. Yeah. Well, I mean, 8,200 unread emails, which tells me that you're just not getting to it. And so, I mean, I get probably 100 emails a day. They come in and maybe five to 10 I need to see. And it's amazing how fast you can go through those five to 10 and then delegate. And Mindy, let me answer your other question. The control freak issue of all of us entrepreneurs, all right?

How do you then offload that? Well, what you do is, A, you create the process of what you do. you have to take the time to write down those steps. So if you're going to delegate someone handling this for simple example, your email, Dion, you're going to get rid of your email. How do you do that? You go through and go, here's the rules for my email. This person, delete.

This person unsubscribe. This person comes in, do this. If it's this, get rid of it. If it's this, get rid of it. This is the only thing I need to see. Make sure that gets into my email inbox. You write it out. You get it all into a quote unquote.

workflow and then you can delegate that off. And then trust. Someone trusted you to do what you needed to do one day. Trust them to get it done. I have these two amazing assistance that if I didn't trust them, I wouldn't call them amazing assistance. I trust them to do what they need to do and I get out of the way and I let them do it. And that's one of the greatest things that I've done over the last few years was start to outsource things and just trust. And so I'll have financial advisors from all over the country come to me that are in this coaching program that we're all in this group program together. And they'll be like, how do you do that? And the biggest thing is is trust. Create the system. Give it to them trust. And now we're at a point with my two assistants that

they're so good. I just say, I need a system for this. Create it. You just do it and create the system because you're going to do the work, create the system. Let's make sure the end result is there. so that the end result is in place, all I care is the end result gets done. So create the system, you take it and run. Just let me see what it is so that I can approve and we move on. Okay. You've mentioned your amazing VAs twice. How did you find them? And did you go through any before you found these? Or did you just win the lottery your first time? I kind of won the lottery. And I'll say it that way. But here's what you need to know. I went with specialists. Okay. There are a few, very few specialized virtual assistant companies for financial advisors. All they do is

serve financial advisors. And all they do is serve independent financial advisors that use three different custodians and one CRM software. They are experts in that. And so what I basically did is I called them up and I said, I want to interview you. I went through the screening process. I checked out a couple different firms and I went back to them and I basically just said, all right, let's go. I'm going to hire you, your experts, and that what I'm going to do is I'm just going to continuously trust. And so we started small, like we just talked, we started small with one or two things, and we built, and we built, and we built. And then what I kept doing was I kept trusting and I kept trusting. So I went with a specialist. I then got a referral to a company called

Athena Executive Services. And I didn't share the other name because most other people that are listen to this are probably not financial advisors, but people listening to this in the real estate world or other entrepreneurs could use this company, and this company is called Athena Executive Services. Athena Executive Services specializes in providing high-quality executive assistance, but they're virtual, virtual executive assistance for entrepreneurs and busy professionals, is what they'll say. That's kind of the core line. What they do is they specialize in finding absolute rock stars. And so I called them up and I said, here's what I want. I'm going to start to delegate all these things. Find me a rock star.

Now, I pay for a rock star. It's not cheap, but it's amazing how much work they get done. And I'm able to just trust. And so like you said, I've mentioned them a couple of times because it's been that valuable to me to open up the time to be able to do all of the other things that I want to do. I love that. I love that. And what I'm hearing you say is that this is not an overnight process. This is not a cheap process. And we use virtual assistance at bigger pockets, and we've had some really great success. We've also had some not amazing success. And I think that it's, you know, you start off small, like you said, here is one task. Oh, you didn't do this task, right? Thank you for your time. Here's the money that I said I would pay you. And then I don't have

any more work for you. Or you start off, hey, here's a task. It's a small task. They do. it. They did a great job. They followed your procedure. That's another thing that I'm hearing you say that I think some people would just be tempted to be like, okay, go through my email. Well, how? What do I do? And you gave specifics, which I love. That's really fantastic. But yeah, it is going to take time to train these people. It's just like an employee without all of the, you know, employee cost. But you still have to show them what to do. You still have to share with them the process. And you have to sit down and write them out. I, when you said, write down a piece of paper, all the things you do every day. I'm like, oh, I feel seen.

I feel like you're looking right at me and saying, hmm, Mindy, this is how you can improve your productivity. But I'm also thinking to myself, I have somebody to help me with my emails. And I don't have 80,200 unread, but I have a lot of unread emails. So I need to set up a different system to, and it's not him. My VA Marlin is fabulous. He walks on water. It's me not giving him the parameters that I need to figure out. So I need to go back in through my email and make a list. And so thank you. Gabe, you've just increased my productivity. Well, next week. Well, and that's the thing that I'm learning myself as well is we are constantly then improving upon those systems. And so the streamlining and the systems, even though you've delegated email once,

you've got to constantly be improving it. And then when you delegate the next thing, you've got to constantly be improving it. And so it actually gets a little bit exhausting sometimes to constantly go back and improve those. But what you're doing is you're putting little deposits in your future productivity is what you're doing. So I'm going to take the time. We're going to improve this situation, improve this solution. And then I'm going to be more productive next time. Okay, Gabe, before we get into the famous four questions, if we could give kind of like a reward for people who made it this far into the episode, can you give me an order of operations on starting a business, like maybe the five steps?

Like to get into real estate, we need to learn how to save. We need to fix our credit score. We need to talk to a lender, then talk to an agent. And I mean, these are like the steps you take to start a real estate investing business. But if you're starting any kind of business for the ideas out there, can you give that to us? Oh, first thing is figure out can you get a client? Do you have somebody who's willing to pay you for what you do? Once you can get a client and they're willing to pay you for what you do,

then start to put systems and processes in for everything that you then do, meaning document what you do so that you can either scale it or you can delegate it so that you can go on to the next step. So one, get a client. Two, create systems. Three, figure out how to repeat. those systems, then you probably better think about what type of venues, what's my name going to be? I mean, really?

And do you then need to go down the form of creating an LLC or do you need to go an escort? Do you then need to start to add in a website? Do you need to do those next things? But everybody's business is going to be different. But the biggest thing is, is if you don't have a client or a customer, you don't have a business. get that done first. And the best time to do that is when you already have income coming in. So if you can't find a client, you're not eating beans and rice and rating your 401K.

Exactly. Very similar to starting a real estate business. You want to do it while you have the W2 because it makes lending so much easier. Way easier, especially when the banks are looking at you. How are you going to pay us back? That makes total sense. Yeah. Okay. Gabe, this was a lot of fun today.

I feel a little bit seen. I feel super excited. and like energized to take what you've shared about starting a business and applying it to my own job that I'm doing. And it's not my own company, but that's okay. I still am doing a job. And now I've got some ideas for delegating some things on my email list. And, you know, if I'm going to be honest, I haven't really sat down and done anything with

that. I've just been like, hey, give it some of my emails. And now the parameters that I'm setting up are going to free up that time, allow me to post on some work on something else, get that systematized, pass that off to somebody else and so on and so forth. So look for big things for bigger pockets money coming up soon. Is there anything else you would like to share before we move on to our famous four? I guess in regards to what we've talked about so far, the biggest thing is, and I've said it many times, is for those entrepreneurs or whatever type of entrepreneurship you're going to go into, get a client, get somebody that's going to

pay you first so that you have something to actually build a business from. That would be the biggest piece of advice I can give as a parting tidbit, we'll say. I love it. I think a lot of people think their idea is great and they don't really run it by anybody before they jump in with both feet and they're like, oh, nobody wants my thing. Well, if nobody wants your thing, then look for something else to do. I love it. Okay, Gabe, it is now time for our famous four. Are you ready? I am ready. What is your favorite finance book? My favorite finance book is The Psychology of Money by Morgan Housel. If I'm pronouncing his name correctly.

It's a fantastic book. So good. Oh, I want to have Morgan on the show. Morgan, if you're listening, come on the show. Such a good book. And I was so excited to read it. Not only is it amazing, but as I'm turning the page and like, okay, your money or your life came out when I was in high school. I wasn't ready for that message.

The millionaire next door came out when I was in grade school. I wasn't even care then. This is going to be a classic finance book, and I'm here for it. I'm here reading it with everybody else at the exact time that it came out, and it was just like every page. I can't turn the pages fast enough. It's such a good book. Sorry. Word vomiting.

It's okay. Nope, I can appreciate that, Mindy. So, Gabe. whether it's starting a business or running a business, what do you think has been your largest money mistake? My biggest money mistake when I started my business was bringing on too much overhead right away. I got, because it was like, I'm doing this thing right.

I got a bigger office than I needed. I got custom art brought in. I bought more furniture than I needed. I invested in that office more than I needed. more than I needed to. And a year later, after surviving everything I could to make it through that first year, I let those two staff people go. And that hurt.

That hurt a lot to have to let those two staff people go because they helped me make the change. And that then had this little piece, this is me getting a little vulnerable, that had this little piece inside of me that was like, I'm not hiring anybody again. And so I went like 10 years without hiring anybody ever again. because it hurts so much to get rid of those people. So I went too big on overhead and I spent too much money. And then the fantastic financial crisis happened and my revenues went way down. So I was betting a little on the come and the come didn't come for a while.

So I spent too much money too fast. It was a cash flow issue, Dion. What is your best piece of advice for people who are just starting out? Find a client. find somebody who's going to pay you to do what it is that you want to do. If it's real estate, you guys are the experts in that, but find something that is actually going to cash flow so that it actually pays you to do what you're trying to do. I think that's great advice.

I think one of the things that most people who have ever worked in a sales position learn is that the goal of the salesperson is to build the dream for the client and then show how your company is the path to that dream. And if people don't want the dream, the path doesn't matter. And your business is the path. So what is your favorite joke to tell at parties? Oh, geez. I'm not really.

Ah, ha. I have one for you. I was going to say. Especially for you. Go right ahead. Because right now I'm at a blank and all I can think of is is a dirty joke that we shouldn't tell. So we're good. So you can email Gabe for that joke.

My joke is, after I spoke to my financial advisor, I slept like a baby. I woke up and cried every hour. I love it. That is really good. And I'm glad you're not my client for that joke. Okay. And Gabe, please tell us where people can find out more about you, your podcast, your book, your website, all the things. Great.

My podcast is called Solopreneur Money. It's on all of your favorite podcast applications, but Solopreneur money is the podcast. The book is going to launch January 11th, 2022, and it is called The Solopreneur's Money Manifesto, a how-to guide on how to basically master your finances and create the life that you want. My website for my business called Gabe Nelson Financial Incorporated, an individual independent advisory firm. The website for that is Gabe Nelsonfinancial.com. I'm all over social media. The one I'm most active on is LinkedIn. And if someone has any interest in possibly just seeing what it is that I do and how I help people, if you go to my website, Gabe Nelsonfinancial.com,

there's a start here button. You click on the start here button and it tells you so you know what the roadmap is to come into, you know, work with someone like myself. those are all the places that you can find me. I love it. Thank you so much, Gabe. And yeah, we will include a link to the book, the podcast, and your website on our show notes, which can be found at biggerpockets.com slash money show 249. Gabe, I really appreciate your time today.

It was lovely to chat with you. Thanks, Mindy and Dion both. This was a fantastic experience. And I really appreciate it. Thank you. Thank you. And we'll talk to you soon. Okay.

That was Gabe Nelson. Dion, I am so excited to take his advice and put it into action just in my own job. I really feel that, you know, running the Bigger Pockets Money podcast and YouTube channel and Facebook groups is kind of like an entrepreneurial endeavor because I started this. I'm pushing forward and I really want to help it grow. And I took a ton of notes while we were talking with Gabe today. What did you think of the show? I think it was great.

Like you said, I think it's going to help me in my own personal business that I'm running. and with a position like yours where you're kind of in charge of creativity on some level, you don't have a person standing right of your shoulder telling you exactly what to do. So even while you work for a company, it's very much like being an entrepreneur. And most of the things that he covered are actually action items that we can put into play now. Exactly. And I don't have a roadmap for my job. I am kind of making it up as I go along.

And the suggestions that he gave are like instantly going into use. the end of my workday right now when we're recording this. So tomorrow morning, I'm going to have a piece of paper next door to my computer writing down all the things that I do so that I can find ways to improve my productivity and maybe get some things off my plate that somebody else could do better. Okay, now I'd like to ask a favor of our listeners. Do you know somebody who's an entrepreneur? Do you know somebody who could use the advice that Gabe shared with us today? Please tell them about our show. The podcast is found wherever you listen to podcasts. And you can also find the show notes at biggerpockets.com slash money show 249.

Dion, should we get out of here? Everybody, have a good day. From episode 249 of the Bigger Pockets Money podcast, he is Dionneely and I am Middy Jensen, say and see you tomorrow, Capibara.