As you begin to start your own side business and working on general side hustling, it can be an adjustment from your typical 9-5 gig.
After all, you are in control of how much work and time you want to put into that extra gig or gigs.
However, as you get started you’ll inevitably make some side hustle mistakes. And for many people, these mistakes actually stop them from reaching their full potential on their side hustle.
For most, they may be on the verge of reaching their side hustle goals or close to being able to work for themselves full-time, but give up right before the momentum shifts.
No matter what side business you pursue, take note of these common side hustle mistakes below to ensure you find the success you desire.
You Haven’t Researched Enough
If you listen to any successful entrepreneur or even others who were side hustling, you’ll hear that most figured it out through trial and error.
Naturally, this is how most people learn what works and what doesn’t work when trying to make side income.
However, that doesn’t mean you should blindly start something as soon as the idea pops in your head.
I’ve seen this happen with others I know where they have an idea and then this is the flow:
- immediately work on it
- finish said project
- it doesn’t generate results
- and then they go to the next idea
When in reality, many of those ideas would have worked with research and some planning.
When you have an idea, even if it’s a simple side hustle, do some research first. Look at the competition out there, your target markets, what can you do differently and also add more or different value from others.
Investing Too Much Money Upfront
While your side hustle has potential to make quite a bit of money, one mistake you want to avoid is investing too much into it at the start.
There is nothing wrong with investing in yourself and believing you can achieve results on your side hustle, but you want to ensure you can be profitable first.
The worst move you can make is to put all your savings or borrow money to invest all in a side business, that then proves to not be profitable or have as much demand as you originally thought.
There might be some upfront costs to getting started, which is completely fine and normal. However, if you do not have prior experience and are learning as you go, avoid spending too much money on your side hustle in the beginning.
Instead, you’ll want to start small and create interest (or demand) for whatever your side hustle is first. As it grows and you can prove ROI, then consider investing some extra money to grow it further.
Failing to Set Your Priorities
Another common side hustle mistake is failing to set your priorities.
For most, a side hustle is something you are doing in your spare time, whether on weekends or after hours from your regular job.
And with most side hustles, you’ll be juggling a lot of different aspects in order to make it successful. Yet, with all those tasks at hand, you need to prioritize your time and which areas will move the needle for you.
Generally, since you are not working on this full-time, there is just no way you’ll be able to do every little thing possible and as perfect as you want.
Instead, you want to figure out your strategy and pick the main few things that you think will have the most impact.
Not everything you prioritize will work, but you can’t get bogged down with tons of little tasks. Choose a few things you can handle, do them well, and if one doesn’t work just drop it and switch your priority.
Mimicking What Others Have Done
You’ve probably seen the cheesy Youtube or Facebook ads of people pushing how successful they were in a side hustle and you can be too.
While there are some legit people advertising, even then it doesn’t mean following their path will work for you.
For your side hustle to be successful, you first want to pick something that excites you and generally is interesting to you. Maybe it’s something you already have skills in or just enjoy doing already.
If you instead pick something because another person was successful in making money, you probably won’t follow through well if it’s not your passion.
Additionally, even when you do pick something you are passionate about, you still should not copy others in that space.
Everything is different for you as you’re starting at a different time, may have different target markets, aren’t adding anything new, etc. Just because something worked well for one person, there is no guarantee it will work for you.
Look to others for guidance or maybe study what they did well, but create your own plan and strategy.
Not Organizing Your Tasks for Maximum ROI
Too often, a side hustle mistake is trying to do everything off the top of your head. Meaning, each day you work on your side project you are randomly picking things to do.
Similar to the prioritization point from above, yet here you need to be highly organized in what tasks you are doing each day.
With most side hustles, there will be small tasks that really are not that important. There are many tasks to your business, but they take time and actually are not contributing to your growth.
And the thing is, you might not even realize how much time you are wasting on tasks that are not maximizing your ROI.
The best thing you can do is organize all your tasks, strategy, and things that need to be done in a spreadsheet. This way you can see all the work that needs to be done, but see which ones are actually worth your time.
By doing this, you can figure out if there are digital tools that can automate things for you or outsource certain tasks so you don’t have to deal with them.
Forgetting to Give Yourself A Break
If you aren’t aware, the word “side hustle” has started getting this weird stigma around it.
Basically that you should be working 80+ hour weeks, sleeping is for the weak, or you should be waking up at 4am, etc. You get where this is going and you’ve probably seen the articles touting these things.
Side hustle culture is honestly pretty annoying. But actually having one and working on a side project is not. But for some reason people like to push some weird narratives.
Anyway, don’t fall into the side hustle culture.
You are allowed to give yourself breaks, you don’t need to work an extra 40+ hours a week on your side hustle. Of course, you certainly can if that is what you desire.
But it’s okay to get some sleep. You don’t need to wake up at 4 am and work until 1 am every night. Burnout is a very real thing and can quickly affect your motivation and results.
The Hustle found that the average side-hustler spends 11 hours per week on their secondary work, and earns $12,609 per year — an average of about $25 per hour.
See, average side hustlers are not burning themselves out and still raking in decent cash!
You’re Not Separating Your Personal and Side Hustle Finances
Whether your side hustle is through making money online or a service you provide, a side hustle mistake is not separating your personal and business finances.
Even if you are the sole member of your side business, you want to keep these areas separate for accounting purposes and tax purposes.
While your side hustle might begin as an under the table job, any income you are making is going to need to be reported to the IRS.
In order to be set up correctly, you’ll want a simple business checking account where any income you make from your side hustle will go
And any of your business expenses from your side hustle should be paid with your business checking account, not your personal one.
From the business checking, you can then set up some regular cadence to pay yourself from. But remember, all the side hustle income should go to your business checking account first. This ensures your taxes and accounting are much easier to deal with.
So if you are taking your side hustle seriously, you’ll probably want to create a single-member LLC and get an EIN, which will be required to open a business checking account..
Not Setting Aside Enough Money for Taxes
Besides separating your personal and business expenses, another side hustle mistake many newcomers make is not setting aside enough money for their taxes.
While having your accounts separate make tax time easier, many forget to put a percentage aside to pay the IRS.
Majority of tax experts recommend setting 20-25% aside for taxes, but personally I aim for 30% as a precaution. It’s better to have money aside, then end up with a large tax bill that you can’t afford to pay!
And when it comes to paying your side hustle taxes, there are generally two options to paying your share.
The first way is adjusting how much you have withheld from day job paychecks. You do this by updating your W-4 form with your employer, which will take out more money from each check for taxes. But this is an easy way to lower your tax bill at the end of the year when you file.
This is the route I recently went since I still work full-time and my side hustle is not bringing in more than $10,000 per year (yet).
Now the other option for side hustlers or those who are self-employed full-time is to pay estimated tax payments each quarter.
These deadlines will fall on April 15, June 15, September 15, and January 15. There is quite a bit of information, which I won’t get into detail here.
But definitely consult with a tax expert or CPA to ensure you are not hit with penalties, high tax bill, or an audit from the IRS.
And to quickly recap it all:
The 8 Common Side Hustle Mistakes:
- You Haven’t Researched Enough
- Investing Too Much Money Upfront
- Failing to Set Your Priorities
- Mimicking What Others Have Done
- Not Organizing Your Tasks
- Forgetting to Give Yourself A Break
- Not Separating Your Personal and Side Hustle Finances
- Not Setting Aside Enough Money for Taxes