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For many, a side hustle is an opportunity to their passions into profits. Nearly half (45%) of working Americans report having a side hustle – that’s 70 million people. Among the younger generation and millennials, that statistic rises to 50%.
Starting your own small business is pretty easy – you’re only a couple of hours from getting everything set up. Avoid these 10 commonly made mistakes and you’ll be well on your way:
1. Perfect your 9-to-5 job
Distraction will be your greatest enemy – it’s easy to be tempted by something you’re passionate about, even to the point where you might be tempted to work on it at your full-time job.
Your side hustle starts as exactly that – a side hustle. It’s natural for a side hustle to eventually require that you invest your own capital – so don’t mess up your full-time job, as it’s your largest financial asset.
Master both priorities: your full-time job and your side hustle.
Be the best at your full-time job – work hard and be efficient – you need the stability to create added financial security for your side hustle. Get the same results in less time. Every hour saved is an hour you can reinvest into your side hustle.
Having a new second priority doesn’t mean abandoning your first one – it means taking care of business so your new priority can get the time and attention it deserves.
2. Avoid all forms of debt
There’s a common saying that it “takes money to make money”. While it’s true that it’s possible to leverage debt to make more money – keep in mind that you’re also creating a self-defeating cycle.
When you borrow money to make money, you’ve effectively doubled your responsibilities – you’re now not just responsible for making enough money to keep your side hustle alive, but also profitable enough so that you’re able to pay back the money you borrowed.
Loans come with interest, so every day that passes, your debt grows, and the amount of money taken out of your business grows right along with it. The moment debt is involved, your side hustle goes from needing to just “break even” to requiring it be significantly profitable – all while you’re racing against the clock to pay back your loans.
How do you avoid that? Start a side hustle you can fund through savings or one that doesn’t involve funding. Create products using the tools and skills that you have – prove your business model before you take on any debt. If you can’t start your side hustle without taking on debt, consider a different idea.
3. It’s a priority only if it generates revenue
Everyone seems to be hyper-focused on words like: passion, drive, work ethic, perseverance – but everyone forgets that all of that time and energy is completely useless if you spend it in the wrong place.
The difference between having a paid hobby and a successful business is prioritization. Sales drives revenue, and revenue is the only thing that pays the bills.
Business is an objective sport – it requires not just hard work but an extremely large amount of focus to win. There are only 24 hours in a day, and every day you spend focusing on the wrong activities is an extra day you need to work before retirement.
You only make money when you make sales. Everything else can “seem” important, but it’s just time taken away from the number-one priority of a business: generating revenue.
4. Focus on your needs, not your wants
It’s normal to let the dreams, goals, and potential earnings of your side hustle drive your work ethic. But the difference between the reality and expectations of your side hustle is the discipline you have.
It’s easy to convince yourself that everything is an investment:
Better clothes so you can make a better first impression to clients…
A bigger garage so you can store more materials…
A better phone so you can make more sales calls…
Everything in your business falls under two categories: it’s either a nice-to-have or a must-have. Most people that start a side hustle are so caught up in their newfound ambition and goals that they confuse what they want with what they need.
There’s nothing wrong with wanting something – but don’t use your side hustle an excuse to be careless.
If you want your side hustle to be more than a hobby, treat your side hustle with the respect it deserves – reinvest your earnings in things that actually matter to your business.
5. Invest in revenue & customers
Most people that start a side hustle enjoy the feeling of being their own boss. The difference between having a business and paid hobby is understanding that your customers are your bosses.
Without customers, you don’t have a side hustle.
They’ve trusted you with their hard-earned money, and that money is what pays for your bills and your expenses. You have a responsibility to take each dollar you earn and use it to its highest and best use.
Don’t spend money the customer won’t see – new coffee machine, faster internet, bigger television…
If it doesn’t make a difference to your customers – if it doesn’t clearly and significantly increase the probability they’ll make a purchase or return as a customer – it’s not an investment, it’s an unnecessary expense.
6. Worry about supply after demand
When you’re working on your side hustle – every hour of your time falls in only one of two categories: planning and execution. Business is about solving problems and admittedly, properly planning to prevent a problem is better than dealing with unexpected surprises.
Planning is great – but don’t plan based on hypotheticals.
It’s tempting to forecast your needs and invest based on projections. That’s the problem with projections – they’re just projections, with no guarantee of anything.
Don’t buy supplies without demand. Don’t hire without demand. Don’t do anything without demand.
Because if that demand doesn’t come, your money is going to be tied up in materials/resources that you have no use for.
Once you have demand – real customers, purchase orders, and revenue coming in – you’ll not only have the capital to solve your problems, but you’ll have a much more precise understanding of how much and where you need to invest in your business.
Base your planning on existing demand – spend based on you see in front of you, not what you want to see.
7. Don’t negotiate with your time
Be practical and pragmatic – if you want a side-hustle that can sustain you in the long-term, plan ahead.
Figure out how many hours a day and which days a week you’re willing to spend on your side hustle. Then, plan the exact hours you’re going to work – and commit to those hours. If you want a side hustle and not a glorified hobby – make it a point to be relentlessly committed to your goals.
If you say you’re going to work 10am – 4pm on weekends, show up and work those hours.
You can’t control many things in business – who will walk in your door, or how they’ll react to your product/service – but one thing you can control is the time you invest in yourself, and in your business.
Many people start a side hustle with the dream they’ll be able to leave their full-time job. A full-time job has set hours – treat your side hustle hours no differently – make them non-negotiable. How can you leave your full-time job when you’re even less committed to the goal you have?
Master the one variable in a side hustle you can control: respect your own goals and ambitions enough to give them the time that they deserve.
8. Think big picture, but focus small
When you start your side hustle, it’s tempting to focus on that one, single big deal that could change your business forever.
But the truth is that getting to that point takes time – you need to be prepared when that opportunity comes – that means having a large, established customer base, a successful marketing funnel, a scalable product/service at the optimal price point for profitability, and the list goes on…
Don’t spend all of your time dreaming about a big opportunity – prepare for it. Most people are so focused on finding new opportunities, they forget to take advantage of the ones they have.
“A bird in the hand is worth two in the bush”
What most people don’t realize is that opportunity is a function of your business’s success, and the stronger your track record and the more evidence you have of your success, the more opportunities you will have access to, and the better you can take advantage of those opportunities.
9. Imperfect action beats perfect inaction
Every day you’re working on your side hustle, you’re either getting closer to or farther from your end goal.
As you work on your side hustle, you’ll reach decisions you’re unsure about. Even if you’re unsure, do something – most opportunities have a time limit.
Just because you’re working hard, doesn’t mean that it counts. Not saying that planning and strategizing isn’t difficult – I’m saying that it doesn’t count if you don’t do anything about it.
It’s easy to mislead yourself into “planning” and “strategy” – for days, weeks, or months. But remember, planning does not move you any closer to your goal – it is passive by nature. And every moment you are not taking action, the gap between you and your competition only grows.
The only thing that contributes to your success is the results that you get – so take action on those goals.
10. Focus your side hustle on YOU
When you choose your side hustle, pick something that you want to do. After all, a side hustle is a choice – if you’re going to do it, make it one worth your while.
Find a side hustle that energizes and excites you and brings you closer to the person you want to be and the life that you want to live.
The process of accomplishing your goals is fulfilling and rewarding – the good news is that at the very least, everything will be a learning experience for you. Focus your side hustle on yourself – find something that you can give your all and make the most of the time that you spend on it.