- Jen Glantz is an entrepreneur and founder of the company Bridesmaid for Hire.
- When she first launched her business, she says she made several costly and time-consuming mistakes.
- Glantz says having a budget, limiting debts, and seeking a mentor would have helped her business grow faster.
- See more stories on Insider’s business page.
I started my business, six years ago, by accident. I had an idea for a unique wedding business, where strangers could hire me to be their bridesmaid, and decided to test that idea out by posting an ad on Craigslist. The ad drew hundreds of interested people to reach out to me and within a matter of days, I officially launched Bridesmaid for Hire.
Because I started my business so quickly, I found that in the first year I made many mistakes that cost me a lot of money and precious time. It’s been six years since then and looking back, I wish I had avoided these costly errors from the very beginning.
If you’re thinking of starting a side hustle, these are the mistakes I made that you should try to avoid.
1. Ditching a budget
When I started my business, I wasn’t sure how much money I needed to get the website up and running, to market to new clients, and to hire professionals (lawyers and accountants) along the way. During the first few months, I was charging every little thing on my personal credit card and not realizing how much I was spending.
I spent close to $500 to launch my website, pay for different software products to help with email marketing and social media, and get official branding for the company. This was all just in the first few weeks of starting the business.
Rather than just paying for things and racking up credit card debt, I wish I’d had a budget. If I could go back in time, I would first decide how much of my personal cash I wanted to loan to the business. Then, I’d create different categories for spending (marketing, software, professionals, freelance hires, etc.) and determine how much of that total cash I’d allocate per category. This would help me stretch a predetermined amount of money to pay for everything during that first year. Instead, I did things in reverse and when I needed something, I just charged it and didn’t keep track.
Set a budget before you start the business. Determine how much of your own cash you’re willing to pump into the early days of getting your idea up and running and stay meticulous about tracking your spending on a weekly basis.
2. Taking too much from my personal savings
When I first started my side hustle I was working full time and took some of my income from that job to help fund my business. Without realizing it, I was slowly draining my savings account to pay for a lot of the early expenses. Since I wasn’t earning that much yet from clients and services, I was using too much of my personal cash, too fast, to pay for things.
Rather than pulling out too much money from your personal accounts, and impacting your personal financial goals (such as saving for retirement or creating an emergency fund), it’s best to put a limit on how much of your own cash you’ll loan the business and have the intention of paying yourself back once the business makes money.
When you start a business, everything always feels urgent. What I should have done was prioritize what needed to be funded immediately and what could wait. That way, I wouldn’t have put so much of my cash into the business up front and taken on personal risk without knowing if the idea would generate income in future months.
3. Not asking for advice or mentorship
I didn’t have any friends who were entrepreneurs when I first started my company so I felt very alone in the process. When I’d ask my friends for help or ask their advice on certain situations (such as how much to charge clients or how much to spend on a logo) they wouldn’t know what to advise me.
I had to learn things the hard way by making my own mistakes, when a mentor or circle of entrepreneur friends could have helped me make better decisions with their lessons learned, industry knowledge, or just entrepreneurial experience.
Even if you’re not surrounded by people creating side hustles, find online communities or reach out and find a mentor who can be there for you to answer questions, help you avoid mistakes, and stay smart with your money.
4. Refusing to hire a virtual assistant
I started the business solo and found myself taking on too much work. I was working full-time and working on my side hustle during any free moment I had (early mornings, nights, and weekends). I could have accelerated the growth of my company, big time, by hiring a virtual assistant to help with more time-consuming tasks that didn’t need to be done by me (organizing emails, uploading blog posts, creating outreach emails, etc.). Instead, I took the time to do these smaller tasks that took hours or a half the day, when I could have been working on more important areas of the business like scaling, growth, or brainstorming ways to get new clients.
Hiring a virtual assistant would have cost around $25 an hour and that’s something I could have budgeted for knowing that if I used those “free hours” I could find ways to double or triple the growth of the business.
5. Setting my prices too low
One of the most rookie mistakes I made was when it came to figuring out how much to charge. I set my prices very low and because of that, I wasn’t profitable during the first few months when I could have been. I had many clients and was working more than 40 hours a week with this side hustle, yet my finances didn’t show success. I was undercharging for my services for two main reasons: I didn’t truly know my value and I was scared if my prices were higher I wouldn’t have any clients.
I was wrong. This was a costly mistake because I found I was providing clients with more hours of my time than they originally paid for at a very low cost. This meant I couldn’t take on new clients (because there just weren’t enough hours in the day) and it meant even though I was working hard, and working long hours, my business wasn’t making enough money to be viable.
When you notice a mistake in your pricing, make changes to how much you’re charging or your business plan. This can make or break a business early on.
Everyone starting a side hustle makes mistakes but when it comes to errors that cost time and money, it’s best to avoid those when you can. Set a clear budget, limit how much you’re pulling from personal finance, and ask for advice so you can make smart and efficient decisions along the way.