Why you need multiple streams of income in a down IT economy

Layoffs. Downsizing. Recession. Job security. Is your IT job safe? Is a layoff in your tech company just around the corner? Can you count on the job you have today being there tomorrow? Are you living in a constant wonder of what all this economic turmoil fundamentally means for you? Sometimes you don't know whether you should panic or just go shopping, as Bush asked us to do after 9/11. (I would advise against Bush's shopping recommendation.) Even some VCs are panicking, telling their investment startups to batten down the hatches, get profitable ASAP and take the first acquisition offer you get. Doomsayers say we're in for a rough ride and the economic recovery will take longer than most expect. And who knows, they may be right. It is confusing, not knowing whether you should prepare for the worst or carry on as normal, so as not to create a self-fulfilling prophesy. I've written previously about my experiences living through the dual recessions of the '70s and '80s (mostly the '80s, from an earnings perspective.) [See my recent blog post Top 5 strategies for surviving a recession.]

A few companies facing tough economic times take immediate, drastic approaches to conserve cash, playing survival to make sure they've got the cash reserves to ride the storm out. Those companies are implementing or planning preemptive layoffs as we speak. That strategy can work out well if they are already concerned about cash or are right about the length of the economic downturn. But it can also work against them, playing not to lose and ending up with an underperforming business that's a mere shadow of the business plan that got everyone interested in the first place. Other companies will run out of options to acquire more funding, through VCs or other funding options. They just flat run out of runway. Still other companies not only survive but grow and do well, despite or because of a slow economy. If the fundamentals of the business were sound before all this turmoil, things may be great, provided the market for your goods and services is still there.

So, if you are in a tech job, in IT, a start-up, a marketing group and so forth, what should you do? One important piece of advice I'd suggest is to get yourself set up with more than one stream of income. I know, that's easier said than done. But it might be easier than you think.

Don't let a job loss mean a total loss of income. I learned that lesson during the '80s recession. I was in school and later started my first job after graduating right in the middle of that recession. It was mostly luck and not intentional planning, but I had multiple jobs off and on while at school: working in the college compsci labs, working in the college IT department, doing consulting, moving furniture (a lot of furniture), playing in a band, working at a music store and writing software for medical offices. Approaching graduation and after graduating, that same approach helped keep money coming in while I started my career. The software I wrote for medical offices really helped during the first few years after graduation, and later helped inspire me to branch out from the corporate world and begin down the path of start-up companies.

I don't know where you are in your career today -- whether you are just starting out, a few years into things or well along the path. Whatever your station, look at opportunities beyond just the current job you have. Maybe you should teach at a local college a few nights a week. Maybe you should start up a small business providing IT support to small businesses, even specializing in a vertical, like dentist offices or legal firms. Maybe you should take on some software-development contracting on the side, a writing project or a part-time marketing-consulting gig. Or maybe it's unrelated to tech altogether. You may have a great idea hiding in plain sight that could help you bring in some extra income. It could become your primary income, should you lose your full-time job.

Also, be aware that your employee agreement with your current employer may have stipulations about working on the side. Right-to-work-state issues aside for a moment, employee agreements frequently state that you need to inform your employer about other employment you take on, and can have statements about "your ability to meet the job requirements", implying that other activities can't interfere with the time commitment your job may require.

Setting up your own company to perform consulting, though, sell services or products, etc., may also give you more flexibility without bumping up against the conditions stated in an employee agreement. Now, don't construe what I'm saying here as legal advice or interpretation. Seeking appropriate legal and financial advice is something you are responsible for, and you shouldn't be relying on what some blogger like me says about that stuff.

If you don't currently have more than one source of income, now may be the time to get serious about it -- just in case you would wind up with no income for a while.

Best of luck, and let's hope we're all worried about nothing when it comes to our economy.

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