Earning

A year after I started my side hustle, it was bringing in $10,000 a month: Here's what I've learned

"Lead with your passion."

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In 2016, when my wife Diony and I started our form-building business Paperform, I was still working as a full-time programmer. I didn't know what to expect, but I certainly wasn't anticipating quitting my job and devoting all my time to Paperform within a year. 

I started Paperform as a labor of love. I was interested in development tools and solutions that didn't require any coding experience. From my perspective as a programmer, I had seen how it could be used to serve a lot of different business needs: things like online payments, surveys, and landing pages. 

For a long time, I considered myself to be a risk-averse person. For much of that first year, I found myself more likely to make excuses about why I shouldn't make my side hustle my main priority. I liked my full-time job, and no one can give you permission to become your own boss but you. But plans change. 

After I built the first version during my spare time in winter 2016, I launched in beta to receive feedback and make improvements. That feedback was invaluable and led me to launch a paid offering in December 2016, resulting in $40,000 in sales. These initial earnings gave us a proof of concept and seed money.

That cushion allowed Diony and me to transition Paperform from our side hustle to our main gig. We quit our jobs in March 2017, and by the end of that year, we were earning $10,000 in recurring monthly revenue.

Today, the company we started in our apartment is earning seven figures in annual revenue. As we continue to grow Paperform into a thriving international business, we've been able to reflect back on the milestones that helped us determine when we were ready to take Paperform to the big time.

Here is what we've learned along the way.

Know your numbers before making the leap 

When making the leap from side hustle to full-time gig, building a plan to climb to that next level is key. Planning was never fun for me, but creating a blueprint to hash out ideas and future improvements helped me visualize progress, and what my life would look like once I left my 9-to-5 job behind. This included a "worst-case scenario" plan, where we pessimistically predicted how long it would take to achieve profitability, or at least sustainability.

In March 2017 we reached about $1,000 in recurring monthly revenue. Certainly not enough to live on, but enough to show there was a market and growth potential. But by the end of 2017, we reached $10,000 recurring monthly revenue, and that number has continued to grow.

Last year, Paperform hit $1 million in annual recurring revenue.

Dean McPherson is the co-founder of Paperform.
Courtesy Dean McPherson

I'd recommend waiting to leave your day job until you start making enough to comfortably cover your monthly expenses. We decided to make the jump four months after the launch of our paid offering in March 2017, once we started seeing that consistent growth in recurring revenue. 

Our main expenses at the time included things like mortgage repayments and groceries, but the business itself was inexpensive to run. The cash we had in the bank, coupled with growing sales, meant that we had a 12 to 18 month runway to help us bridge the gap to full sustainability.

Time is one of your most valuable resources 

Paperform's growth might seem linear, but there were quite a few hard decisions, tough lessons, and setbacks that we encountered along the way, especially our first year.

At first, spending all our free time on Paperform wasn't getting us as far as we wanted. The lack of time to focus on the product was our biggest pain point early on. So we decided to change things up. We used our vacation days while still working full time and devoted that time off to Paperform. While it wasn't fun in the sun, that extra time was invaluable in improving our product.

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We were full of energy and without family obligations when we started Paperform, but we also watched for burnout. During those first few months, while we were still working full time, we were taking turns waking up every three hours to respond to customer service inquiries. That wasn't sustainable, so we took the time to reevaluate.

About a year in, we knew that we simply did not have the energy to run our own business while also holding down full-time jobs and engaging in a busy social life. So having looked at the numbers, we quit our jobs and put our social obligations on hold until we reached a certain equilibrium. What helped was knowing there was a light at the end of the tunnel.

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Budget with setbacks in mind 

We also learned about our slow sales periods during that early period. We now know that our sales are much slower during the second half of the year. Unfortunately, that was news to us in 2017. There were a few weeks in August 2017 where sales were practically dead, which caused major concern. Thankfully, we had budgeted for slow periods. 

Diony handles our budgeting, and she is purposefully conservative with growth projections. This was especially the case during our first couple of years. As a bootstrapped business, we always have to operate in the black because we know there is no outside cash coming in. Therefore we were very cautious never to overspend.

Those approaches helped us weather slow periods and plan for them in our annual sales predictions.

Lead with your passion 

If your side hustle is going to be your focus day in and day out for the foreseeable future, you have to be passionate about it. Eventually, even the coolest side hustle will feel like a job, so make sure that you like, or at least tolerate, the work. 

A good side hustle can evolve into an obsession, in a good way. If every spare minute is devoted to your side hustle, going full time is the obvious next step. This will open up a huge chunk of productive time and it gives you the space to really focus on your business instead of the constant switching back and forth.

Eventually, even the coolest side hustle will feel like a job, so make sure that you like, or at least tolerate, the work.

Personally, when it came to Paperform, I was driven to create no-code solutions for other entrepreneurs and small business owners, because so many of my previous jobs had been acting as a translator for very capable, intelligent, and skilled people who didn't know much about computers or how to code.

I'm only one person. But I saw the potential in building solutions based on the questions I frequently got from customers. And during tough times, being passionate about the problem we're trying to solve has helped me stay motivated, and empowers me to continue to grow our business. 

Dean McPherson launched Paperform with his wife Diony in December 2016. Since then, the husband-and-wife team has grown Paperform into a thriving international business. Before Paperform, Dean spent several years in mobile and full-stack development. He enjoys playing music in his free time. 

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