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Secret Income Strategies When You're BROKE and BUILDING Your Business (I Mean Like Broke and Unemployed)

3/18/2013

12 Comments

 
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Losing a job or income can feel like you’re being cast into the middle of the ocean with nothing but a life preserver ring (unemployment) to keep you from completely drowning.  It is unnerving and daunting for those of us used to the feeling of being rooted on land. I know all too well what this feels like.

In December of 2011, my board members and I voted to close the non-profit organization I had founded 11 years prior, due to financial difficulties and the terrible fundraising climate.  We closed our doors with only 21 days notice. 

Though we had a super successful 11-year run, it was incredibly sad and stressful to close. There I found myself, like so many of my fellow Americans, collecting unemployment, with only a few thousand dollars in my savings account.  Not only did I feel like I was barely keeping my head above water, I had absolutely no clue as to how I was going to make money.  I knew starting something and working for myself was the route I wanted to take, but I had zero money to invest in any kind of business; I would need whatever little savings I had to supplement my unemployment compensation and cover my monthly expenses.

If you find yourself wanting to start a business or non-profit with few resources, whether you just left a job, are collecting unemployment or disability or just barely making ends meet, here are some practical tips that can help you bring in a little extra income and help you gain financial momentum to move forward in your journey. 

Sell the Jewelry You Don’t Wear or Need

I am NOT a jewelry wearer, but I have bought a few things here and there in my lifetime.  On the rare occasion that I do wear jewelry, I usually lose part of it – an earring, a ring or a pendant.  I remembered my mom saying something to me about how the price of gold had skyrocketed in the past couple of years.  I had never sold anything, but was curious about whether I could get any money for the remaining pieces I had from jewelry sets - backs of earrings from my high school days, a broken gold chain, a black pearl necklace and earrings I had bought on a trip to Hawaii but never wore.

I ended up taking a little sack of miscellaneous pieces to two jewelry shops to see if they would buy them.  The backs of the earrings (because they were gold) were worth money.  The jeweler also bought the pearls.  I walked away with over $1,000 just from getting rid of mismatched pieces of jewelry and jewelry I never wore. 

The key strategy here was selling items with gold in them, as the current market value of gold has gone up so significantly.  Don’t underestimate the little pieces of jewelry that are lying around your house.  Take them to any gold buyer and expect to get 80% of the market price of gold. 

Selling things of value can be applied to anything that is taking up unnecessary space in your home or drawers.  Think about what you own that could be of value – do you REALLY need it?  How is it serving you to keep it?  Is it worth money?  Is it something you could give up now and buy again later on in order to earn money to invest in your future today? 

Consign Clothes
 

During my months on unemployment, I also ruptured my Achilles tendon. (It’s a long story.)  So not only was I unemployed, I was unable to drive (I know - LOSING).  My parents had to come from out of state to tend to me for a month because I couldn’t do much on my own.  And so began my mom’s cleaning frenzy.

Not only did I get lectured on how much “stuff” I had in my closets; every day I woke up, I’d find my mom had tackled a new cabinet in the kitchen.  She would pile things up and ask piercing questions like, “Do you NEED this?”  I’d nod my head, and sometimes defend my favorite frying pan with all my zeal.  Then she got my Dad in on it.  He eventually gave me a lecture on how I needed to get rid of everything in my closet.  I was annoyed, but I decided I needed to reframe quickly.  So I looked at the experience as an opportunity to create space for the old to go out and the new to come in. 

I got rid of all the clothes I hadn’t worn in the past 1-2 years.  Luckily, living in the San Francisco Bay Area, I am surrounded by all sorts of cool consignment shops.  I took my clothes to one shop and earned almost $90 just from that trip.  That’s $90 more than I had before the cleaning frenzy!

I’m a firm believer in making physical space for new ideas and dreams to manifest.  And have you ever heard the saying, “we are burdened by our possessions?”  It couldn’t be more true.  Cleaning up and consigning left me with the space I needed to create, craft and build from a clear space.  Clothes are not the only things you can consign.  Think about old furniture, household items, rugs, antiques, etc.  What’s taking up space in your closet?

Sometimes, You Just Gotta Dip into Stocks or Mutual Funds

I know, I KNOW.  This is like the anti-financial planner advice.  But as an entrepreneur, sometimes you have to spend money to buy some time to make money.  No risk, no reward.  I remember listening to the founder of 3 Twins Ice Cream (my all-time favorite maker of chocolate ice cream in the Bay Area) tell his story about having no money when he wanted to start his ice cream company.  He liquidated his retirement and took a loan from his family to start.  He took a huge risk; everything was on the line for him.  The ice cream is now in every major grocery store that I frequent.

During my time of transition, I also took a leap a lot of people told me not to take.  I don’t have much of a retirement savings from having worked in non-profit for most of my career, but I do have some mutual funds.  I made the decision to liquidate two funds to keep me afloat a little longer while I figured out what direction I wanted to take.  I am so fortunate that I had some liquid investments, and while I still kept a few untouched, I felt I really needed to sell off the others for some extra money.  I knew I could make the money back, and that taking the money out of my mutual funds and putting it into current investments would inevitably help me with my future more than having that money sit and grow interest.  Money is energy, and sometimes having energy at your disposal NOW is way more valuable than keeping it for retirement.

Negotiate and Downsize ALL Your Bills on Fixed Expenses

Think you got a good deal on your fixed expenses like your cell phone plan, landline or car insurance?  It is amazing how much you can negotiate with respect to your bills.  This is how I downsized some of my expenses:

  • I got rid of my landline – I didn’t really need it.  I could use Skype to call somewhere if my cell didn’t work.  Why pay for another line?

  • I adjusted my cell phone bill and text plan.  I downsized the plan, and by talking with customer service and letting them know I was thinking about leaving for another carrier with better prices, they gave me an extra 5,000 anytime minutes.

  • I called my auto insurance company and made sure I received all possible discounts.

I put all of my fixed expenses into a grid and tackled them one at a time, figuring out any possibility of lowering my bills.  This is an exercise I have most budding entrepreneurs do, so they can really get empowered to know what their monthly expenses are, and where they can cut, if necessary.

Ask yourself questions like:

Do I really need those extra cable channels? 

Is it essential to have 1 GB of data on my cell phone vs. 2? 


Also, consider these other cost-saving ideas:

  • Use a pay-as-you-go plan on your cell phone, instead of locking yourself into monthly payments.
  • WhatsApp is an application you can download onto your smartphone to send and receive texts anywhere in the world.  Are you still paying for a monthly unlimited text plan?  It’s time to change that!

Volunteer

Yes, this seems counterintuitive, but it’s not.  One of the quickest ways to attract work and money your way is to give your services away.  This builds relationships and trust and gives you an opportunity to help others.  It also gives you an opportunity to really understand a business, a project or a challenge so you know better how you can be of service if you’re volunteering in an industry in which you want to work in the future.

In fact, when I started coaching, I would freely give of my time with absolutely no agenda in mind; I loved to practice my skills and witness transformative moments in the lives of the people I talked with.  And slowly, the very friends I had coached for fun started recommending me to their friends, and there are always opportunities that come from these types of referrals.  Putting yourself out there will lead to you being known, building relationships and perhaps taking on a project for money. 

The key is to get out there and start doing work and helping.  You manifest opportunity by acting as if you live in the opportunities you want to have, and at the very least, you are helping other people. 

Budget, Budget, Budget!

Budgeting was something I really learned to do when I took a traveling sabbatical from my non-profit organization.  My income was limited during this time, and I had to be really conscious about my spending.  Toward the end of my travels, I defaulted to surviving on ramen noodles and eggs as my daily diet.  I continued on the budgeting after I got home.  I separated my fixed expenses from my variable expenses in an Excel grid.  I kept track of every single cent that went out the door.  It’s tedious at first, but it’s totally empowering.  Then with my variable expenses, I had the opportunity to assign how much I WANTED to spend each month.  My variable expense categories included groceries, eating out, wellness and any other categories that were meaningful to me.  IT IS ESSENTIAL FOR ALL EMERGING ENTREPRENEURS TO GET A HOLD ON THEIR EXPENSES.  Know where you want to go, but also know where you are.  Looking after your money carefully will empower you in the long run. 

Have you ever been in my shoes?  Are you in my shoes right now?  What are some of the secret strategies, tools and resources you used to stay afloat?  I’d love to hear your practical advice from the trenches.  How do you make ends meet? 


12 Comments
Nadine Herring link
3/18/2013 04:55:51 am

Excellent article! When just starting out or starting over, sometimes you have to do things you wouldn't normally do but it helps to carry you until you can get on your feet. I especially like the point about volunteering; excellent way to build relationships and get your name out there!

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Dita
3/18/2013 01:04:38 pm

Okay I have to ask...did you have to get rid of the frying pan I gave you? :-) No worries. We went through a major purging as we had to cut costs significantly. While only some things were resold and the rest donated, the tax write-off certainly helped.

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Farhana
3/20/2013 05:06:49 am

I loved that frying pan so much that I ordered a second one. I had 2 and the teflon was eroding on one of them so my sister chucked it (for health reasons) but i still have the other! :)

Thanks for sharing your experiences too!!!

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Boku Kodama link
3/18/2013 01:13:07 pm

Great advice Farhana! There's nothing more revealing than real life experiences. I would add one more bit of advice I got a long time ago when I was put in charge of building shopping centers with absolutely no experience: when you need to get quick info, read the biographies of successful people in what you want to pursue. In those books, they too will reveal how they did what they did. All you have to do is copy it and adapt it to modern times. It worked for me. Boku

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Farhana
3/20/2013 05:07:34 am

awesome boku! thanks so much for sharing the tip!

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Barbara Saunders link
3/21/2013 09:09:01 am

Great advice, Farhana. My only disappointment was that I've already done these things. THEY WORK! :-)

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Farhana
3/21/2013 07:30:57 pm

honored your reading barbara. would love to hear your experiences whenever relevant to entrepreneurship too!

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Michele link
3/22/2013 05:58:07 am

Farhana, Thank you for the great post. I too am endeavoring with great changes in my life, with unemployment and less than three thousand in my bank accounts. I also made a big move hundreds of miles from point A to point B and downsized my life in general by moving into a shared living situation after 6 years of independent living. Additionally, right during the move, there was a break in, and theft, with leather jackets, gold, technology stolen. It was kind of heartbreaking, but also a shifting. The shift was a re-alighnment.
Resourcefulness has become a very mindful venture for me. These days, I am looking to achieve my learning and development goals with what is given freely. I've not only been recreating my reality, but I am following energy, and creating energy and following the generosity mantra. Short trips to Big Sur via camping, Meditation retreats in Mt. Shasta that are donation based, buying food in bulk and living pretty simply by making soups and veggies, investing in fixing what I know I depend on everyday like my vehicle, going to 24 hour fitness 4 days a week for 24 dollars a month where I get yoga/cardio/pilates classes, a swimming pool and weights on those 4 chosen days. Learning how to do it yourself in whatever direction is needed. And yes, being really mindful to where and how money is flowing. I have found that managing the stress as it relates to worrying about money, and where the hell am I going with my life and having some kind of a plan are essential ingredients for getting to the other side, wherever that may be. Just my two cents!

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Farhana
3/23/2013 12:41:16 am

Michele -- you are testament to how resourceful and creative we really are as humans when put in such situations. LOVE the sharing of your ideas of how to keep things moving AND take care of yourself on a dime in the process. It is possible to still bask in nature, eat healthy, and be in our bodies (if possible) even if we're broke. Thanks for sharing what you did and what you are learning! oxox

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Ed Hawkins
4/22/2013 07:13:41 am

Thanks for sharing your life experience and thoughtful tips. Its always encouraging to hear how others overcame such challening times. I too am currently managing with the lost of income and a great desire to create my own path.
Whats exciting is I feel so much more creative than I have in years, I too started working out to help manage the stress and to stay fit physically and mentally. Now I get to take my kid to school every morning which I enjoy and have been able to be more active at his school.
I cleaned house going thru my closet as well as my kids, to find plenty of clothes we no longer could wear and donated them which felt wonderful and created some new space. I do feel more in touch with my reality and sense a shift in my life for the better.
The biggest result was tackling my finances and managing the finances I currently earn, which meant creating new habits such as budgeting. I realized I had alot of small transactions under $10 that added up: lunch, starbucks, snacks/treats. Its a challenge but I embrace it now.
This whole experience is teaching me alot about myself and how resilent I can be. Originally I didn't think I was making much progress but now I'm starting to see some change from being discipline and consistent even if its tiny steps.

Thanks again for sharing, very encouraging.

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top link
11/23/2016 05:07:52 am

Interesting. I've never thought of anything like that. I guess, I would like to run my business your way in a situation of this type.

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Gouthami link
7/6/2017 10:47:53 pm

A life coach can help you see clearly where your life is right now, create a vision for where you want your life to go, and make a plan to get you to your destination.
<a href="http://lifecoachram.com/">Life coaching services For Entrepreneurs</a>

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