What is a Portfolio Life?

I was writing some notes here and I want to coin a new term today. All right, the bmi, the Boring Meter.

Indicator, Business Brain, the Entrepreneur Show. Number 397 for Wednesday, September 14, 2022. Greetings folks and welcome to welcome Back to Business BR where we are here at BusinessBrain show where we are using our business brains and thinking about using our business brains and noticing how we're using our business brains every week. Sponsors for this episode include Shopify, where you can go to shopify.comsbs to get your 14 day trial and full access to Shopify's entire suite of features. We'll share more details about those features in a little bit. For now, here in Durham, New Hampshire, I'm Dave Hamilton in Lafayette, California.

I am Shannon Jean. Being self aware of using my business.

Brain, that's what it is really. You know, if I think back over the last seven plus years that we've been doing this show, my own self awareness, my own awareness of my self awareness has increased largely as a result of doing this show. And perhaps because of that, this show has, has become more and more just about that self awareness thing and specifically how it helps us with business. But I think it all kind of helps us with business. So I don't know.

Well and I actually think it helped, you know, one of the reasons we changed name recently and focused on this business brain concept, it helps you in your, your life as well. Yeah, I, you know, when I always talk about, you know, you get to pick what story you tell. Well, I mean your whole life because you know, it makes it a better story. Even if you're, even your failures can powerful stories. When you talk and tell people about your life and what's going on, sometimes the failures, it takes a little distance to make them.

Well, you gotta let them. Yeah, we forget what, what specific pains have felt like with time is really what that is.

Yeah, yeah, that's true.

Hey, Tim's got a pain though, and he wrote us here at feedback at BusinessBrain show and he says I'm new to the business brain coming over from Dave's other show. So I apologize if this question's been asked. No, no, he says I have a very small business and earning between 5 to $8,000 annually. I've been using FreshBooks for almost 10 years and they just announced that once again they are raising their monthly subscription to $30. My bookkeeping needs are super simple and I could easily use a spreadsheet. But I use FreshBooks mainly for their invoicing and giving Clients, a simple way to pay electronically. In addition to the monthly fee, I also lose about 4% on each payment that comes in through them. Between $30 a month for FreshBooks, $12 a month for Dropbox and banking fees. I feel like I lose a growing portion of my income just to this kind of fee infrastructure. There are some months that I have little to no work, that I just lose money. So is there a better way to do this that I'm missing? Should I just be using spreadsheets and paper checks? Does the size of my business make a difference in how I do this efficiently? And is this just a cost of doing business and that I need to suck up, raise my rates, or do more work so that the set fee isn't such a large percentage? Also, is there a point that a business is too small to be worth it? I ask myself this every April. I did that hard work for how much? You know. So I have some very specific answers for parts of this. And then, you know, we've got some other things to talk about. But in terms of if all you're using FreshBooks for is invoicing, I would take a look at Stripe. That would be the first place, because there is no monthly fee. Yes, you will pay a transaction fee for your credit cards.

They're still going to pay the 4%.

Yeah, somewhere between 2.7 and 4, depending on what the deal looks like. But you could also use PayPal for that. PayPal and Stripe have similar operating methodologies. And in fact, there's no reason you couldn't have both, because neither one of them is going to charge you a monthly fee to have that set up. But you can. I have one business where Stripe is what we use for our invoicing. And it works fine. I mean, we don't send out that many invoices per month. It's somewhere between zero and maybe five, you know, and five would be an astronomically busy month for the invoicing part of that business. And Stripe works great. You know, it lets people pay with a credit card or they can pay with a, you know, bank transfer or whatever. It's.

It just works.

So that would be my. My first thing to say. My second thing would be find a bank that offers free business checking, because they do exist, and save on that fee. I can't save you on Dropbox. Well, I might be able to save you on Dropbox, but we'll circle back to that.

How much Dropbox do you need? If you're just doing, you know, this kind of small volume you can't use, you know, like Google Drive or some other free.

Well, his business and I skipped this part. I don't actually, I don't know why I skipped this part, but it is relevant to that question. He's an audiobook and elearning narrator so he's got relatively larger pieces of data that need to move around between him and his clients. So I understand. Yeah.

I think he also is, is aware of a couple of other issues with the business. One is if your rates are such that those monthly fees and I think it's great to save to you know, try to save money and all that kind of stuff. But if your system is working and your rates are such that you're concerned about, you know, another 10 bucks or whatever it is, I think you should raise your rates if, if it will support it. And I think it's, it's worthwhile doing an experiment to see how it impacts. I do it with businesses all the time where I say okay well let take a vacation rental business. We just start, you know, we go out strategically and say what if we charged an extra 30 bucks a night or 40, 50 bucks to see what happens and you know, do some different testing. And then I think the other question that nut of it is no, just.

To that one point before we move past it. You don't have to do that with your existing clients. You can test with the new clients. I just wanted to make sure that wasn't lost here because that's how you do that important. Yeah, yeah.

See if people come see if your business, I mean you know, it's, it's a pretty small business. So a very small business as, as Tim said himself. So you should be able to tell pretty quick whether it's, you know, and in my experience most self employed people undervalue their services dramatically.

Yep.

And increasing your rates is often a sign of professionalism. We see it all the time right now when inflation goes up. You get an email. Hey, sorry, just like FreshBooks is doing to you. Hey, our expenses are going up, we're increasing our rates. The holidays are coming up. USPS to send out an email, hey, guess what? From November through end of December, you know, rates are increasing. It's not that people don't expect that but to your point about when is it too small of a business to matter? I think it's, it depends on how you, how you define success. Because one of the things we're going to talk about today is this concept of a portfolio life which is kind of encompasses some of Our revenue stack idea that we talk about on the show. But beyond that in the sense that it sounds like, I would argue that that business does more for you than just generates money.

That's a good thing to be aware of. Yeah, yeah, fair.

And you know, we can dive into accounting and talk about always having a business that you can do write offs for and excuse me, and, and you know, all these other things. But there's other, you know, real values that we, Dave and I talk about all the time, how we do this show because you know, it, we, we like working together. It connects us to other people. I always feel it adds to my credibility, you know, that kind of stuff. Tim, I would imagine that if you made a list of things that you enjoy with that business, there's probably a lot of them in the non monetary column as well. And that's important not, not to forget that.

Yeah. I do have two other things to share. Number one is yes, FreshBooks is moving up to 30 bucks a month. However, if using FreshBooks is the thing that makes it easy for you to invoice your customers, be aware of that before you cancel FreshBooks. Right. Because one of the classic issues with small business people, and I see this from plumbers to consultants to everything, is actually sending out bills, doing the invoicing. And without the invoicing, it's rare that you're going to get paid. Somebody might pay you, but you know, you got to ask them for the money. So 30 bucks a month to earn $8,000 a year. Well, I mean if that's what it takes, then make sure you keep invoicing. I guess that's the advice there. And then the second is I've got a link into our business brain support group on Facebook to a thread where we were talking about different accounting packages and someone mentioned one that's only for Mac users. But since I know that Tim came over as a listener from my macgeekab show that he probably is a Mac user, but it's called Banktivity and it runs, it's a subscription as well, but it's between 50 and $100 a year and it seems like it can do a lot of the same things that FreshBooks will do. So take, maybe take a look at that. I'll put links to all that in the show notes@businessbrain.show. you know what it's time for. I love that sound because that sound is the sound of another sale on shop the all in one commerce platform to start, run and grow your business. Shopify is a platform designed for anyone to sell anywhere. Giving entrepreneurs like us the resources once reserved for big businesses. Customized for our needs. With great looking online stores that bring our ideas to life and tools that help us manage our day to day and drive those ever important sales. Shannon and I, we've used Shopify in various ventures throughout our history and man, it makes life so much easier. There's no reason not to use Shopify. And it's not just us. Shopify powers millions of entrepreneurs just like us from first sale to full scale. And you know what happens? Every 28 seconds a small business owner makes their first sale on Shopify. Get started building and customizing your online store with no coding or design experience. You've got powerful tools that'll help you even find customers. And like I said, drive those sales and 24,7 support so you're never alone. Go to shopify.com SBS all lowercase for a free 14 day trial and get full access to Shopify's entire suite of features. Start selling on Shopify today. Go to shopify.com SBS right now. Shopify.com SBS and our thanks to Shopify for sponsoring this episode. All right, so let's talk about this whole idea of living the portfolio life. I like the way we've been sort of, we've talked about this a couple of different ways and you and I have had discussions about it pre show before. But I like the way you explained it to me by, you asked, would you invest all your money in just one stock? And if the answer is no, then why would you invest all your efforts into one company? One side hustle, one career path? Why not do more? Why not diversify a little? And I think that's a good foundational way of, of starting this conversation. I like that.

Yeah, this, this concept, you know, you shared this article with me. We'll, we'll link it in the show notes. I really like it because it's a different take on our kind of, maybe a more expanded take on our revenue stack having multiple revenue streams to help diversify and build wealth and you know, that kind of thing. And one thing that I think is really powerful with this concept is that you can do it, you know, embrace it. Even if you're working full time for somebody else and you're trying to get out on your own or do a side hustle or this kind of thing. And I think it's, it's powerful to think like that. Not just, okay, I got, I'm going to go start another business. I'm going to leave my job or whatever. And then once I get going, good, I'm going to start a different one and start a different. Because that can. That can seem a little daunting when you're first starting. After a while, it may not. Yeah, I would say you find that it's not. But so it doesn't matter what stage you're at, whether you're, you know, an existing established business and you kind of feel like, hey, I could step away, I could do something different. Or if you're working for somebody else and you're thinking, okay, I want to do something, I have time. I'm going to throw this, this, this statement out again. Don't watch tv, you know, whatever you're streaming, whatever you don't do it. Just, you should have your laptop and you should be researching and building something. When you have that downtime, it'll enrich you far greater than watching Game of Thrones or whatever. It's just. It's just. It's the free hours of your day or your evening that you can push out further. It's that slight edge concept, which is another book. I love that if you just do a few extra things every day to build something greater than what you have now, it'll make all the difference for you. It totally has made it for me, and I'm happy to share the concept here.

Yeah, I mean, it's an easy way of saying be disciplined, but it's more than that. It's choose what you know to your. To the thing you say all the time. Choose the story you want to tell. Then you don't need discipline to walk the path to get there. Right.

Because, you know, I'm not. Yeah, I'm not disciplined at all. I'm all over the map. But I wanted. When I was younger, I wanted a lot of stuff. And so, you know, I wanted a nice car, and then I wanted a nice house. And then I, you know, realized, oh, wow, I got these kids now and I want them to have nice stuff, and I want them to go to good schools and all that kind of stuff. So that really drove me in. As a, you know, like Steve Jobs said, it's easy for me to look back and connect the dots and tell you, oh, just work at night. It totally makes sense. I didn't really plan it as much as I just did it. And it really is a big deal if you can give yourself those extra two to three hours a day or even four hours a day to achieve something in addition to what you're doing. Now it can really add up. And when I used to, you know, one of the bits of advice talking about working for somebody else and then doing something, as soon as we would hire a new employee, get them settled, do the onboarding stuff, I would always ask them, so what do you, what do you do on the side? What are you interested in? And sometimes they would react kind of strangely and look at me like, wait, you know, I just started working here, what are you talking about? But some people got it like, oh, I'm into this and I, I sell on ebay or I'm, you know, whatever model trained person and I trade this, swap that. I always encourage my employees to have something else besides just their job because it benefits your company too. It creates more creative thinkers and it allows it. Also, it's a different frame when you talk to your employees that way because they're not used to you saying, hey, go start something else. And it can benefit you by relieving some strain on salaries. If you have kind of entry level salaries, if you could help someone learn another skill, you know, we even let him use some of our, our resources and, and sure. Tools, if you will, to do that. And you just never know. I, I know a couple, actually, somebody we had on the show a few years ago that talked about how they embraced teaching their employees this kind of thing. And then when they would go, leave, they actually started investing and you know, helping them start new companies. So instead of just losing talent, you built this portfolio life out in just a different method. So don't overlook other people that work for you as well in addition to yourself.

Yeah, I like it. Go ahead.

Yeah. Well, I was just going to say as a business owner, another part of this is you have to kind of embrace, I call it the art of replacing yourself. Once you start to feel like, okay, it's going, maybe they don't need me, I've got a sales manager, I've got whatever. For your business, it's time to move on to something new. Either within the business, you can certainly expand out and do different things, or maybe you should go start another one. Right. And go out and challenge yourself and help build that portfolio out.

I will share that as someone, I am someone who has a very hard time convincing myself to replace myself. Intellectually, I see it right. But I, I don't do it naturally.

So I just let my wife do it.

Well, right.

And it works great. She is smarter than me when it comes to that and she's worked with me and she would say, you, you need you don't, they don't need you here anymore. And I'd be like, really? Then it takes me about a year.

And then I finally agree. Okay, so it's okay. So you have the same problem I do. Yeah, I do. Yeah. But if you don't have someone that's telling you this, and you probably do, you may just not be listening to them. But if you don't, or if you need a little extra push or like me, if you need something to fill that emotional void. Because even though, again, intellectually, I know this business can run without me, I have this thing where it's like, well, I need to be involved, I need to do this thing. What makes it much easier for me to emotionally detach is to have something else, right? To start something else. And then that way it's like, oh, I need to be over here. I can't be in two places at once. Good news. Intellectually, I know that the place I used to be, I can replace myself there. So let me take a minute and put some effort into that and then I can refocus and go do this new thing while I'm confident that this other thing is going to be just fine. And you know, and I mean, it's not like you have to detach and never think about it again. You just know changing your relationship to the day to day. I don't even want to say getting out of the day to day. You're changing your relationship to the day to day.

Yeah, the day is long. I mean, you can come in and okay, up online and work for an hour here, an hour there, just kind of thing. And you know, I was writing some notes here and I want to coin a new term today. All right, the. Yeah, we need like a symbol, like, you know, but anyway, I, one of the ways that I've, you know, looking back is I, I find myself after a little while, I get bored. You know, I have adhd, I'm sure, especially when it's related to business. But after the startup and the, the struggle and you start to successfully, I was like, okay, this works and everything, but it's kind of this, you need an indicator and it's the, the bmi, the boring meter indicator. So if you're like this. Yeah. If you're, when you feel yourself getting bored, that's the first tip that you need a new challenge. And this is what I notice. And you know, that's when you want to take on something new that is that itch. If you're sitting there or whatever, you're like, well, you know, I don't really need to step in and work on this. I'm, you know, a little. If you start to feel a little bored, man, that BMI is starting to creep up. It's time to find something new to do.

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I think, yeah, no, we talked about not investing all in one stock. I think you're just that continual diversification. And one of the things I liked about this concept, we were reading about it earlier today, is that it's not just about business and career and money. It also should include things that you do for yourself, whether it's like volunteer work, your hobbies, things you do to enrich your personal life. That should be part of your portfolio as well. Right? If you're involved in causes, just like a side hustle does, these things, they, they make you think different, they expose you to other opportunities, you get to meet new people and in turn that creates a good system that continually enriches and helps you build out this port, this portfolio life. So it's not all just about money and work.

Right? Right. Yeah. In fact, it's, you know, people talk about creating a lifestyle business. I would say this is creating a lifestyle from your business and from, from Or a lifestyle of your businesses. Right. Where you're doing these different things so that you can live this life that you want, but you're not doing it with just one business or just one thing you've got.

That's right.

Yeah, yeah, yeah.

And I think the, for me, the goal was, and I think what you can do with this concept is it can eventually buy you independence. Now, there's a big. There's a difference. It doesn't buy you freedom because you're tied to all these things. Right. If the buck stops often at you when something has to happen, but. Or financially, that kind of thing. But it gives you the independence to work on different projects, work on different businesses, work on different causes, hobbies, volunteer work, whatever you want to do. And it also teaches you that everything changes, like all the time. Not, you know, once in a while or maybe it'll change. It does change. And so when you learn to shift around to all these different things, well, you're like a change artist. You know, you're just like, okay, great. Yeah, I knew that was coming. Now this, this. Maybe this entity isn't making any money, maybe it's losing money, but something else is picking up and you push on into that. So there's some real benefits. Independence and being able to manage change, just being two of them.

Yeah, yeah, it's. Yeah, I like this idea, and we've talked about it a few times, of independence versus freedom. I always say that my employees have freedom. I have independence. Right. Because I, I'm never.

Flexibility too. Right.

Yeah. I'm never free. And I mean, we're all free. Right? I mean, at least anybody listening to the show is. Hopefully, you know, everybody is. But it's, it's a different, It's a different mindset because, yes, the buck does stop with us, and we have to be, we have to. You have to be ready for that. But I, Yeah, I like this. Yeah.

And we've done shows as well, like having a problem solving mindset that needs to be part of your business brain. And the better you are at problem solving, I think it allows you to dip in, help solve a specific problem that maybe your staff can't, or maybe a group that you're involved in doesn't have that skill set. And then another part of it is then to be able to step back out. And so, you know, and it's kind of that managing by walking around stuff, if you can. Oh, what's going on over here? And what, what input do they need for. To help get this thing Done. Or if this project is stuck. So you need to, you know, think about that problem solving mindset and what, what value you add to each of these venues, if you will, since it's not all just about business. And then go in, do what you're good at.

Yeah. And the business side of it, though, I think you and I embody this portfolio approach. I know we didn't come up with the term, but it is what each of us had sort of created for ourselves. And I think it's what made us fast friends when we finally met and started talking about this stuff. Because I find safety in the portfolio approach, right? Not only do I get to cater to my various interests and serve my add in a way that actually is productive and keeps a roof over my head and all those things, but it's safe because the way I've always talked about it, and I like the term portfolio approach better, it sounds more professional, but I always think of my life as having lots of faucets. And I build a faucet. And the idea is you need to keep the water running from the faucets, right? But I don't need one faucet to fill up the bucket. As long as all the faucets together are filling up the bucket, then I'm fine, right? And so I can have one faucet that's trickling a little and one that's flowing pretty good, maybe two or three that are flowing pretty good, and one that every now and then just like, you know, gushes water but then sort of dries up and, you know, needs a little bit of tender loving care to make it gush water again. But, you know, it's just this whole idea of, well, I know the way, the way this started for me, I don't know how it started for me, but part of this mindset is the same as like a consulting mindset. I would rather have many, many clients than just one. I would, I would rather make, you know, $1,000 a month or a year, whatever it is, you know, from 20 different clients than $20,000 from one client. Because I know in both of those scenarios at least one client is going to go away at some point that I don't get to decide nor predict. And so by having, you know that, that the multiple clients, well, I know that some are going to go away. Okay, in that scenario, let's say one goes away. Well, instead of making 20,000, I make 19. In the other scenario, when it's just the one client, if, when that one client goes away, I go from making 20 to zero. And that's, you know, that's where this portfolio life, it really is sort of a proactive defense mechanism. Maybe this is the ultimate fear based decision, Shannon. I don't know. Because as I'm sharing it, there's definitely some protection and prevention in my mindset about this. Like, okay, yeah, I gotta get another venture going just so that I have. That was one of the hardest things about selling the Mac observer when we did it last year was it was a well maintained business in maintenance mode. And it, you know, was always something that I knew I could just pour my time into and really make it, you know, flourish in a different way. It paid all the employees, it was doing great things. But I knew that there was potential there. Well, now a buyer came in also seeing that potential and evidently I set them up, you know, in a great way. Like that's. Which is good because I knew I had myself set up in that way. Right. And so that's, you know, that's, that's where this portfolio life thing comes from for me is the safety of it and the interest and I get to do it different.

Interesting things.

I mean, it's interesting. Multiple levels. Yeah.

I have two comments on what you were just talking about. One is, you know, go to a bank or financial institution and try to borrow money. When you have one big customer, they'll be the first to tell you. Well, I mean, more often than not they tell you no anyway, but that is a huge red flag to them and they know what they're talking about. So that should tell you something about how diversification is so important. And I also think that for people like us, sometimes it's hard to say what you do, you know, And I love this, right? It's hard. And you start talking about it and you're like, well, you know, but you know, what sounds better? Let me give you two examples. Okay. Well, I own some vacation rental houses. I have a business sales purses. I have a podcast, I've written a couple books, you know, that kind of thing. Or to say, well, I own a portfolio of small businesses in the vacation rental industry, in the fashion business, in the broadcasting business, and I'm a best selling author. Yeah, what sounds better?

Yeah, so both of those things describe exactly the same person.

You. That's right. But one of them people go, oh, that's kind of. This guy's maybe kind of flaky, I don't know, or whatever. You know, that's kind of interesting. And it sounds like I'm stumbling along. But the other one, when you wrap it in this portfolio suitcase, if you will, it sounds very professional and it is very professional. It takes a lot of work to manage those ventures. Again, you get to decide how this stuff comes together. And I love adding this portfolio, the portfolio life concept to our lexicon, if you will. You can probably hear about it a lot. One thing I do want to talk about before we go that I think is important with this concept though, and it kind of ties back to the beginning where Tim was talking about, you know, is this business worth doing? Is each of the things in your portfolio needs some kind of feedback loop and it's important to keep you from wasting your time. And what I mean by that is that you should set up some kind of metric to measure success. And it doesn't have to be monetary all the time. Of course, I like that metric quite, quite a bit. But it, it could be monetary, but it, does it make you feel great? That has value as well. Does it connect you to a community that you really want to be connected with? You know, we know, we've interviewed people on here that have just focused on building thousands of followers on LinkedIn and you know, that's, that's their thing and they're connected to like 5,000 people and I can see them commenting and it gives me them something well beyond monetarily could eventually lead to monetary as well. But you need to be able to measure things to decide if you need to change what you're doing or double down to do more of it. Because again, if you're involved in some cause and you're like, wow, this is great. And it's, man, I love being able to help other people and it helps me in this way. That's wonderful. But think about the feedback loop. Instead of just, oh, I want to diversify for the sake of diversification, what is it bringing you in your own definition of success.

Yeah, yeah, feedback loop. We'd love to hear from you too. That's one of the metrics we use here. And I'll be perfectly frank. We would love more feedback from you. I love that we got that note from Tim and hopefully we were able to help Tim. And by doing that and sort of being transparent about doing that, hopefully it helps more than just Tim. Right? That's the benefit of it. But yeah, feedbackusinessbrain show. We would really love to hear from you and it means a lot to us. It is one of the forms, one of the benefits, one of the metrics that we use to it makes us feel good is really what it is. It's nice to know that we're not just talking to each other.

Everybody wants to feel important, of course, and have value and worth.

We can see that people are, you know, we can see that you're downloading the show. We know that there's thousands of you out there that are listening and we'd love to hear more from you. It's a, it's a good thing. And we, and we're happy to help.

Great.

Yeah. So, yeah, yeah.

So now more than ever, I think, you know, with there's a lot of uncertainty in the economy. What's going to happen as we go into the end of the year and next year, change comes at us really fast. Understanding and living a portfolio life, you know, it can really help you succeed when others get hit with bad news or change that they are not ready for. So let us know what you think.

Feedbackusinessbrain show thanks for listening, folks. This is, this is like, this feels like one of the most personal episodes we've ever done. Perhaps it's just because it talks about literally what you and I do and how we approach our, our business lives with our business brains.

Agree.

Thanks for listening, folks. Make sure you check out shopify.com SBS to get that 14 day trial. Check out that compile Swift podcast. If you're an Apple dev and keep living that charmed life, will you? See you next week.