One in five side hustles fail in their first year and half of those make it past year five. Here is how to make it past year five.
One of my entrepreneur friends is the type of guy to come up with all kinds of ideas. He enjoys sending me bits of information on all kinds of different topics and on occasion, we talk about business, what we’ve been up to, and other thoughts that cross through our minds.
Recently, the topic of banding together to form a business emerged and it’s an idea that I’d certainly entertain at some point. After a time where our core businesses have become profitable enough we don’t need to rely on government programs to stay afloat.
On paper, it’s a great idea because as much as people — especially millennials — love to start side hustles, sometimes they don’t go anywhere. My friend has mentioned he knows so many people who start a side hustle and either fail or give up.
I’m aware that there can be external factors that cause a side hustle to fail. However, I feel that the root causes often stem from a certain way of thinking.
By understanding those root problem mindsets, your side hustle would have much better chances of success.
You’re In It Solely For The Money
As a millennial, I can understand the initial desire for running a side business. All of the income that’s made from it is more than likely going to personal expenses. That much was determined by a Bankrate survey
On top of that, businesses are created for this purpose as well: to be making money.
But that shouldn’t be the sole reason for going into business — whether full-time or part-time.
I’ve written in the past that a business is an extension of yourself and your priorities. Your overall personality and mindset are what’ll dictate where your business is going and how you’ll generate money.
When people prioritize money, most people lean towards exploiting other people and generally being out of touch with their business altogether.
These are the people who would prefer to keep costs cheaper by laying off people or moving work off shore.
The idea of making or delivering a competent product or service that people love is something foreign to them. Yet they’ll talk about how they care about their employees and their customers.
These strategies are still implemented today only because people are letting them. They’re dated and impractical for where business is at the moment.
On top of that, looking solely for profit can also be an act of desperation. Speaking from experience, starting a business for money can lead you to actions you wouldn’t do otherwise when you’re not in a financial bind.
Instead, you’re business will be more sustainable if you have many other reasons involved beyond profit.
You’re Giving Up At The First Sign Of Problems
In business you’re going to fail. You could lose some valuable clients, go bankrupt, struggle to pay bills, and general mistakes can happen.
Small bumps in the road can be handled with not too much problems.
But then there comes a huge turning point.
This could happen early in your business or even a few years down the road.
What you decide to do at that point plays a significant role in where your business will go. It’s a scenario that delivers a question:
Are you going to continue? Or will you stop?
For me, it was a few years into blogging when I realized I needed to be making way more money than I have been. I wasn’t much at risk of anything bad, but the sore point was more of the situation I put myself in — living at home with little to no income.
I clearly made it through it, but not everyone is able to get through it. They feel overwhelmed by that decision and the circumstances that they’re in.
Mine was very easy because I was living with my parents who covered my every need. I’m fully aware of my privileged position.
But I know that many other entrepreneurs out there don’t have those luxuries and privileges that I have. There are people that are in worse situations and will need to consider more aspects to those decisions.
In these situations, I’d encourage you to make rational decisions and see what can be done. I’m a believer that people can get out of their problems eventually with enough effort and dedication.
You need a mindset to help you build that.
You’re Thinking Way Too Much About Your Business
Starting up a business is a big undertaking. That much was iterated many times to me in my business classes — particularly entrepreneurship courses.
The course put more emphasis on it when the “write a business plan” project came around.
In these projects you had to cover everything:
- Your idea
- How you’ll get it set up
- The budget
- The staff you’re going to hire
- Detailed analysis of your target audience
That and dozens of other things that I can’t remember right now are what you need to jot down into this plan.
It really drives home just how massive it all is and how overwhelming it can be. It leads to people overthinking business and ultimately giving up on it.
All of that stuff about a business plan is a complete waste of time.
I’m of the mind to be thinking of some strategy, but there comes a point where you need to stop planning and start doing.
No one cares about your premium-looking business cards, your logo vision board, how pretty your website looks or how professional you look.
And unless you’re dealing with a bank to get a business loan, they don’t care about any of the stuff that I mentioned above.
What the vast majority of people do care about is what your business can do to help them and whether you can meet their expectations.
To this day I don’t have a in depth business plan. I have plenty of ideas for monetization and keep track of income streams, but it’s all stored on a Google doc that’s two pages long at most.
Point is, you’re going to trip over the small details. Don’t worry about them as much and keep in mind some general things:
- Pay your taxes.
- Know what you’re selling to people and how you want to sell it.
- Be knowledgeable enough to tell people why they should care about buying from you.
- Have something appealing enough for people to buy from you.
You’re Spending Too Much Time Focusing On The Wrong Things
Along the same vein as the previous point, maybe you’re not tripping over all those details but rather focusing on the wrong things to generate income. Like me, I spent two years trying to get a blog up on my own to make money through writing.
I had no affiliate links. My only form of monetization was through ads.
While I value the writing experience, I should’ve done what I decided to do after those initial two years: get into freelancing and writing quality content for people as a ghostwriter.
Sometimes many entrepreneurs are stubborn about their business and wish to do things a certain way — such as myself. That’s fine, but you need to accept you need to make compromises at times.
This doesn’t mean that you’re going to do something you hate. Rather, it’s a shift in your priorities.
Through freelancing, I’ve learned a variety of things due to it. The habit of branching out also got me warming up to the idea of writing on other platforms such as this one.
If I was determined to generate traffic through my site and offer nothing but blog post after blog post, I wouldn’t be getting very far at all.
My business didn’t start picking up until I reached out and started getting clients.
Consider your various income streams right now and ask yourself if there are other options or ways you can further enhance those streams of income so you get more out of it.
The chances of your business crumbling start to diminish when you’re thinking of new ideas to profit that still fit into your business model.
You’ve Got No Patience
Calling back to going into business for the purpose of money, this is something else that develops when you dwell in that mindset. Before I was making a profitable writing business I was signing up to all kinds of things.
I went for the stuff that didn’t cost me a thing of course, but these were things that would be a slog to work and turn into anything decent.
I can’t speak too much of it because I had no motivation for those things at all. It was a situation where there were so many options to be making money that I really had no options to be making money.
The point is, this scenario stems from the fact that I was impatient. Even though I had other reasons to start a business, there was still that need to be climbing out of my situation at a faster pace than where I was.
The thing with business though is that the climb is meant to be difficult. It’s not like with cryptocurrency where you can suddenly make it to the top of the world and everything is fine.
The climb to get to that point is a tiring and long one that requires skill, persistence, the right kind of circumstances, and patience.
To develop patience, it really comes down to figuring out what’s making you lose patience. In some cases it’s practicing delayed gratification, but I find what’s more effective is to explain to yourself to be taking your time and to make adjustments that are rational.
Going back to my previous point, maybe you’ve got so many clients that aren’t paying you a whole lot of money for your services. Consider raising your prices. Sure you’ll lose some clients, but others won’t mind and you can hire more to make more money for the business.
Those kinds of scenarios and many others happen all the time.
Instead of being frustrated about it, see if you can look for some answers and ask yourself different questions.
Going into business is a massive undertaking, but there is a lot of potential for growth if you can work through your current mindset. By tackling these particular problems, I believe you’ll have better chances of sticking it through and working to make your business work.