Joanna Penn | The Side-Hustle Business Startup Plan

Joanna Penn escaped the corporate life in 2011… and has never looked back. Today, she’s a best-selling author of thrillers and nonfiction books about writing, and she helps other writers break into this competitive industry.

She talks about her “zigzag” path to entrepreneurship, including what she learned from the mistakes she made along the way, as well as why loving a certain activity doesn’t mean you can always turn it into a thriving business. 

When Joanna started planning her new venture, she started by deciding what type of life she wanted… and then looked for a business that fit into that and turned a profit too.

We discuss her process and what elements you could start working on right now, as well as…

  • How your current boss could help you start your new business
  • What to do if you feel stuck in your current job and feel entrepreneurship is too risky
  • Free resources to help you start your business
  • A step-by-step process for a successful startup – including what you must do before launching
  • And more

Listen now…

Mentioned in this episode:

Transcript

Giuseppe Grammatico: Welcome to the Franchise Freedom Podcast. I’m your host, Giuseppe Grammatico, your franchise guide, and today we have a very special guest. Today we are speaking with Joanna Penn. Joanna is an award-nominated New York Times and USA Today bestselling author of thrillers under JF Penn, and also writes nonfiction for authors. She’s a podcaster and an award-winning creative entrepreneur. Her site, the Creative Penn has been voted in the top 100 sites for writers by Writer’s Digest. Joanna, welcome to the show.

Joanna Penn: Oh, thanks for having me, Giuseppe. It’s great to be here.

Giuseppe: Yeah, very excited. So you’re in the UK as we were talking before, so we are definitely going international with the show.

Joanna: Well, that’s the magic of podcasting. Yes, I’m in Bath, the southwest of England which people might have visited for a Ramin spa in the medieval abbey. So we get a lot of Americans coming over.

Giuseppe: Awesome, very excited. And as I mentioned, I’m making my first trip over there for a wedding next year. So looking forward to it. I always, Joanna, I always like to start if you can give us a little bit of your background, how did you get into this business? And just, you know, what does that journey look like?

Joanna’s Entrepreneurial Journey

Joanna: Yeah, sure. So like many of your listeners, I come from the corporate world. So I was in consulting. I worked for companies like Accenture, Capgemini, you know, companies like that, consulting companies. And I was implementing accounts payable software systems into large corporates, you know, big mining companies and utility companies and basically living the corporate life.

I had the golden handcuffs, the six-figure salary, had the house and the investment property and all of those things that you end up doing in your first sort of decade of the corporate life, but I was really miserable. And again, I know a lot of your listeners will probably relate. And the, I, you know, I had what you meant to have. I had the great job and everything and I was traveling, I worked all over Europe and Asia Pacific. But I just, I ended up just crying at work every day. I was like, What is the point in what I’m doing? There is no point in this. I just pay my bills.

And yes, I’m making money, but I just don’t have any meaning in my life. So I started trying to figure out what I wanted to do. Like many people who end up with businesses, I started a few businesses. I started a scuba diving business in New Zealand. I did property investment in Australia. And eventually, I was like, I just need to figure this out. I know, I’ll write a book on how to find the career you really want, how to find the job you want. And I ended up writing a book called Career Change.

And in writing that book about career change, I discovered that I really liked writing. So then it was a case of figuring out how could I make this pay. Because again, like you and your listeners, I like money. I like making good money. And most of the authors I had heard of, you know, apart from the famous ones like JK Rowling, most authors, they’re not famous but making a lot of money. So I was like, Okay, I need to figure this out. So I started speaking professionally I started writing books.

And in 2008, 2009, I did get laid off in that global financial crisis and used that to really double down on everything. I started my podcast in 2009, and a YouTube channel. And essentially, I managed to leave my job in 2011 to go full-time author, entrepreneur. I surpassed my salary in 2015 and hired my husband out of his job as well. So it took a number of years, but essentially, I did go from corporate consultant to author, entrepreneur, but it did take a while. And that would be a tip we’ll probably come back to is how long it might take. But there you go. That’s a brief intro.

Giuseppe: Now, that’s great. And yes, a lot of people listening in are in transition. They’re trying to figure out what to do, especially with the pandemic going on. There’s been a lot of people that have lost jobs, have been furloughed. You know, maybe they’ve lost their jobs and they’re coming to the realization, I’ve always wanted to own a business. This is the perfect time to take advantage of that opportunity. So, great story. And I couldn’t agree more.

I felt, I kind of feel I was in the same boat. I was a corporate exec, we call ourselves corporate refugees, jokingly. And we were just checking the boxes. Okay, I accomplished this. I’m now a VP here. I’m now making X amount, you know, I’m looking at a second home. And was just miserable, you know, making a lot of money and it just wasn’t fulfilled, then. It does take some time. It does take some time to figure out what you want to do. We assist people in that process. But yes, it does take time and it’s not an overnight thing. Whether it’s a startup business, it’s a franchise, it does take time. So I’m glad you brought that up.

Typically, I ask people what does that career transition look like? And you answered that. So for that person looking to make the career transition, they’re listening in and they’re saying, you know, kind of what I just mentioned. They’re just struggling at their job or they’ve been furloughed or laid off looking to make the leap. What’s two or three really good pieces of advice you can give to that person? Or I guess, maybe some direction you can give to that person looking to make the leap into entrepreneurship?

You Have to Zigzag to Survive in Business

Joanna: Sure, well, I always, I try to use the metaphor of skiing down a hill. So when you’re skiing, you don’t just head straight down in a straight line. That’s a good way to kill yourself. You don’t usually go from the top to the bottom or, you know, in a straight line. You have to zigzag along the way. And this is the path to entrepreneurship. I think it’s probably true for most people.

Once you make a decision that you’re going in that direction, you are very, very, very unlikely to get it right on the first try. And that’s definitely, you know, if you fail forward, I think is the quote from someone, but basically, you have to learn your lessons along the way. So for example, I loved scuba diving. I was a really, you know, it was a divemaster. I was working on boats in New Zealand and I was like, Oh, it’d be great, you know, as a businesswoman, it’d be great to have a dive business.

And now that is a classic mistake of an entrepreneur is to think, Oh, I really love doing this, so I can make a business out of it. You know, anyone listening can think high overheads. So, you know, to have a boat, the insurance for a dive boat, to have the crew to have the gear. There’s all the safety, the price of fuel, you know, variable costs.

Things like this are really important to think about when you’re considering a business. Your fixed costs, your overheads, your variable costs, do you want employees. That business, the failure of a business, which failed really fast, actually, which was a good thing. It taught me that it’s not a good idea to have massive overheads on day one or even before you start going. Now obviously, there’s always investment needed in a business, but that taught me I didn’t want employees. I wanted financial freedom, but I wanted to run my business from a laptop.

And I know you’re keen on freedom. Freedom’s one of your keywords on your website. So that’s the first tip is, don’t just think about, Oh, I love doing this, think about the costs and the revenue and also whether you want to do something you love as a business. And then the second thing I would say is you have to think more than just the money. You have to think about your lifestyle. So when I really looked at what do I want to do with my life, because of course, I was earning good money in the corporate world. What do I want to do with my life?

And when I sat down and thought about that, and sometimes this can take a while. You might think you want one thing, but maybe it’s something else. I decided that I like reading, I like writing and I like traveling. So they were the three things they wanted. Yes, I like to make money, but I do spend a lot of that traveling. And so that was my goal. And when I looked at that, you know, I didn’t want employees. I know many franchisees will have employees, but for me personally, I wanted the freedom to do what I want when I wanted wherever in the world I wanted.

So that really narrows down the type of businesses that I could have considered. And also, I just love to write and now I’ve written like 17 novels and all of this and it suits my personality. That’s another thing. I’m an introvert. So I like being alone a lot. And I like being in silence. Again, that doesn’t suit a lot of different types of businesses. So it’s very important to know yourself and know the type of business you’re interested in. And I mean, I guess that is one of the benefits of a franchise is that they’ve already figured that stuff out. But then you have to decide what type of life you want to live and look for a business that fits into that. So yes, you know what I mean?

Giuseppe: Yeah. So yeah, definitely. Some really good advice there. And I couldn’t agree with you more. We have a story, some of the consultants I work with passed down, it’s the person that had a passion for golf, invested in a golf franchise. I don’t even know the name of the company. And after investing in that franchise, not only did he fail, he now hates the sport of golf. So and it’s not to say you can’t get into a business that you love or an industry you love but kind of a few things that you said. We help anyone that comes to us, we kind of work in reverse. So we don’t look at the product or service.

That’s great. We look at passions and interests and hobbies and things like that. But we like to look at the characteristics of the business because at the end of the day, you know, why are we even doing this in the first place? I don’t know anyone that ever wants a business. We need a business. And that business is essentially the vehicle to get you what you want. So if your passion is traveling, as you mentioned, maybe I have a business that is remote, that maybe can be run on its own. So we like to look at the characteristics. Do you want a business that runs 24 seven? Is it remote?

Do you want a brick and mortar actual physical location? And then from reverse, kind of reversing the process and looking at that, then we narrow it down to some products or services. Because in many cases, you may want X, Y and Z. This is what the business looks like. And then it just happens to be in a business that offers employment services. And maybe you happen to be in a business that’s involved in porta-potties or storage containers. Something you’ve never even thought about, but it meets the kind of the requirements in the model we create for you. So very similar advice there. Yeah.

Joanna: Yeah, I would say that it’s not similar in that I do believe it has to go deeper than that. And when I say don’t do a business you’re passionate about, what I mean is scuba diving is a very high-overhead business. So that was, you know, it didn’t have, it had passion, but it didn’t have money. But I do believe like, as I said, when I left corporate, I didn’t want to do something with my life that I didn’t care about.

And now I measure my life by what I create. So every time I finish a book, I say, I made this. And for me, the creative streak in everyone is what I now live for. And I can make money but also I am living my passion, which is being creative and helping other people be creative. So I do want to encourage people to consider that meaning as well as the money when it comes down to it.

Giuseppe: Absolutely. And that’s, you know, we always talk about your why. What’s your vision? Why are we doing this? So that’s the number one, the first question I should say that we ask everyone. So that’s really good advice there. For the person, you know, we talked about some advice in that transition. But, you know, we still have people that we, that listen to the show. Sometimes they’ll may not contact me directly, but they’ll listen to the show.

They’ll get some emails. The person that’s stuck, that cannot make that decision to move forward, there are quite a few people. We do webinars. They may sign up but there’s no interaction. You know, we’ll follow up. You know, any advice, or, you know, have you been in that state where you were kind of just stuck and just afraid to make the change? I’m not sure. The timing isn’t right. Is there, have you come across that? And what would you say to those people that are just stuck and they just cannot move forward from leaving the job going into business ownership?

Try Out Some Side Hustles

Joanna: Well, I think the big thing is to do what they call an America the side hustle. So I started writing in 2006 and I didn’t leave my job till 2011. So for five years, I worked on building my business in the morning. So I used to get off at 5 am every morning to write. In the evening, I would be doing a lot of podcast interviews with America in the evening in Australia, which was very good timing.

And then I, at the weekends, I was just working on building my business. So what I would say to people, and I think this is really, you know, I definitely do not think you should just leave your job and start a business. I think that’s extremely difficult, I think, as much as you can, learn things on the side first. So for example, you’re going to have to upskill in things, in understanding things like marketing and customers and products and cash flow.

And I believe in multiple streams of income and all the things that you need to learn as a business owner or, you know, an entrepreneur, often you don’t know as a, someone in a, as an employee in a job. So what I would suggest to people is spend some time, you know, learning and upskilling. We’re in like, the best time ever to learn things online, right? I mean, you can listen to this podcast for free and millions of other podcasts for free.

There’s videos, there’s online courses, and there’s so much training available in lots of different things. So for example, maybe someone listening is interested in franchising, but it feels like a big step. So maybe they’ll go and do a course or maybe they’ll listen to me and go, Well, hey, I want to write a book. So maybe they’ll do that first. So what I encourage people to do is to think about upskilling while you’re still in your job. And the more you learn about business on the outside, the more comfortable you’re going to feel.

The other thing I would say is my husband and I completely downsized before I left my job. So we sold everything. Obviously, you don’t need to sell everything. But we did, because I was the main wage earner at the time. And I said, in order for me to do this, we have to get rid of our debt. So we got rid of, you know, we sold everything, got rid of all our debt, and then we were able to live on a lot less. Now what’s interesting with the pandemic, we’re recording this in late May 2020, I think all of us have learned to live on less money.

Which was fascinating, right? Because I feel like we haven’t spent as little money in a long time. And obviously, you still have your mortgage and your debt, your house bills, but I think all of us have learned some lessons about money management. So maybe you can start putting some money away. I certainly had six months of income put away when I left my job finally. So I basically prepared for five years and also built up my income streams before I left my job. So I was only making a couple of grand a month from my business when I left my job, but it was enough that I was confident that I could do this.

I had an email list, I had products, I had cash flow, and I understood things like marketing. So there’s a lot to learn. So yeah, just spend that time upskilling before you jump. And of course, if you have been laid off or furloughed, then sure, you’re gonna have to do it a bit faster. But it doesn’t take, but you don’t have to go from zero to hero, you know, straight away. You can do a zigzaggy route and learn along the way.

Giuseppe: Yes, yes. That, definitely prepare. This is the perfect time but yes to your point, you know, you can’t just make the decision. You don’t want to just leave your job when there is a lot to learn because as an employee, I know as an employee myself, I was never exposed to a lot of the aspects of business ownership. So, you know, side hustles are great, you know, get everything in order.

There’s even, believe it or not, and not every franchise is built the same or created equal but there are franchises that are specialized in semi-absentee ownership for that person looking for a side business that they can invest minimal time. And not just because you have the, you know, the investment or the money to hire a general manager, but there are franchises built just for that. They have programs to help you hire that general manager and even empower the second in command in the event that general manager does leave. So some really good advice there.

And, you know, I urge everyone and I even mentioned that on some previous shows to prepare, do a little bit of soul searching, look at your financials and definitely scale back. It’s a big endeavor. It’s sometimes one of the biggest financial decisions you can make. So get everything in order. You could do away with maybe not 1000 cable channels and just maybe 100. And some of the perks, not to say you can’t go out and buy an expensive cup of coffee here and there, but definitely cut back and really scale back to, you know, to put some reserves aside.

Escaping the Career Rat Race

Joanna: Oh, yeah. I’m a writer. I live on coffee. So I definitely don’t compromise on coffee. But the other thing I did is that when I decided that I was going to opt out of the career rat race, I went to my boss at work. And again, this isn’t possible for everyone, but you might be surprised. I went to my boss and I said, Look, I want to stay in this job but I want to go four days a week because I want to focus on building another business.

And I had a good relationship with this boss at the time. And she understood, you know, I wouldn’t have said that to other bosses, but I was like, I am going to continue being really good at this job for the time that I am here. But I, you know, I want to go four days. So essentially went to 80% of my income in order to get that extra day, and that really helps. So I did that for a couple of years before I left.

And so at the end of the day, you have to think, okay, I only have a finite amount of time available to spend on whatever I’m going to spend on. And in order to achieve something, you have to put time aside. So for example, I’m writing a book. Like, a lot of people listening or want to write a book. You’ve just written a book, Guiseppe. You know what this means. You know, for me, every day, I put time aside to work on my writing. And, you know, some days it’s difficult, some days, it’s fine.

But putting aside time is the biggest thing you need to do in order to write a book. That is the only way you’re going to make it happen. And it’s the same with business. So if you’re going to upskill on marketing, you need to set aside time to learn about marketing. And you can do that. I mean, people listening right now, you might be at the gym, you know, or maybe not at the gym, depending on when you’re listening.

Giuseppe: Virtual gym.

Joanna: Virtual gym or, you know, doing some chores or whatever so you can do learning while doing other stuff, like get some audiobooks or whatever. But the point is, you know, you do have to make the time for the transition. And what I see is that people will say, Oh, you know, I definitely want to run my own business. But as you say, sometimes it doesn’t get further than that. And you almost have to make a plan for your education, for your transition.

And then even if it’s like, Okay, I’m gonna get up an hour before the kids, you know, let’s say five till 6 am in the morning, and that hour, I’m going to take the next step, whatever that next step is, towards my goal. And in that hour, whatever that next step is, you know, maybe the first step is actually planning what you’re going to do with that hour. But you have to set that time aside. And for me, I believe my productivity comes from Google Calendar. I essentially run my life on Google Calendar, and it works very well. So there’s a little tip too.

Giuseppe: Yes, I, and by the way, my, we incorporate that with our family and Google Calendar is a lifesaver. So If you want a really good piece of advice, check it out. You can even color-code it. I have my wife is one color, I have one color, you know, we have the kids’ sports activities, and it’s a, it’s been a lifesaver. So great advice there. And it’s free. So usually, you know, it’s like, oh, well, this is a cost. So yes, definitely recommend that.

You know, so I, as you mentioned, I just wrote my first book. I’m not a writer by trade, but I wanted to get everything out of my head onto a document, right? So that someone could read up on entrepreneurship and franchising and a lot of the things we’re talking about today are in that book as well. So how can you help someone that has been either looking to write a novel or they’re looking to expand their business and create really good content that they can put in front of people? So, you know, how can you help people? What does that process look like for that first-time book writer?

Having a Book Still Instills a Sense of Authority

Joanna: Well, it’s a very different process writing a novel to writing a nonfiction book. So we’ll just stick with nonfiction given your audience, you know, business owners, entrepreneurs. And because for entrepreneurs like yourself, I mean, what you’ve done in creating a book that is basically a lead magnet.

So essentially, you’re putting your information into a format that’s easy to digest. So let’s face it, a lot of like, I listen to a lot of podcasts, but if I find someone I’m interested in, the first thing I do, is I will go and look for a book that they have written. That is how I consume people’s information. If someone doesn’t have a book, I’m unlikely to actually be interested in them these days.

So I want to know, it’s a sense of authority, it still is a sense of authority in this world, and it gives a sense of the person. It encapsulates your knowledge on a certain topic. It also brings in, you know, it’s a lead generation for your business. So as you’ve done, you write a book around your business or your future business and that will, people will find you through like, Amazon is a search engine, basically. And people will find your book and they’re like, Oh, you know, this is interesting. So I, you know, I have a book on how to write nonfiction.

So if you go on Amazon and type in how to write nonfiction, I will most likely come up. So that brings people into your business sphere, by a certain type of person who generally is educated with some money to spend. That’s the other thing. You know, people who are looking, and the other thing is audiobooks. Obviously, you have a podcast and you have a voice that’s on air. Many people, many business people are starting podcasts. And so recording an audiobook in your own voice is a really good option as well. But then you can also, so that can bring people into your business, which is one form of income. You can obviously sell the book.

Now it can be small income, but it’s some income. We all like more money. You can be a speaker. So often if you have a book, you are far more likely, in fact, you know, 99% more likely to get a speaking gig when you have a book than when you don’t because it’s a very handy, look, here’s my book, this is my keynote. And people will pay you more because you have that authority. So that’s really important as well. And then, you can use it for other forms of income. So for example, I have a free ebook called Successful Self Publishing. And it is completely free as an ebook. You can go get it for free.

But inside that ebook are affiliate links, and it says, you know, this is full of affiliate links, but essentially, I’m sure many of your audience knows, but just in case, if someone clicks my link, then I get a commission for if they buy through that link. So for example, editors or book formatting software, stuff like that. Book cover designers, so I am useful to people, but if they use my link, then I also get some money. So I want people to think that you can make these multiple streams of income from one book. And that is also your intellectual property.

So if you are an independent publisher, so I’m an independent publisher myself, you have control of that asset. And then as you say, you can turn that into other forms of content. So for example, you can make it a blog post, you can put it on your blog, you can put it on someone else’s blog, you can turn it into a video, you can turn your book into a podcast if you want and just give it away. So there’s all kinds of options when you create a book type product that you don’t have if you’re just writing articles. So I hope that helps.

Giuseppe: Yeah, no, absolutely. So, Joanna, this has been very helpful. I really appreciate it. I’ve been looking forward to this just because I’m new to this world and learning a lot. Never thought I would actually write a book. And I know quite a few people after announcing my book, they’re like, yeah, I’ve always thought about writing a book, whether it be a novel or just, you know, something for their current business. For everyone listening in, Joanna, what’s the best way for them to reach out to you if they have just general questions about writing a book, your services. Just what’s the best way? And we’ll also include that in the show notes.

Joanna: Sure. Well since you’re listening to a podcast, you can always come over to The Creative Penn Podcast. Penn with a double n. Or thecreativepenn.com, Penn with a double n. And any questions, the best place is Twitter at The Creative Penn.

Giuseppe: Sounds great. So as I mentioned, we’ll put that in the show notes. Joanna, this is a pleasure speaking with you. This has been great. Very exciting, and I look forward to speaking to you in the very near future.

Joanna: Thanks so much, Giuseppe.