In her new book, The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life, financial columnist and successful sidepreneur Kimberly Palmer urges aspiring and newbie side-giggers to avoid these five common pitfalls:
1. Waiting until you’re “ready” to launch
Many successful side-giggers discovered their side-gigs almost by accident; a friend asked them for a favor, and suddenly they were in the floral business, or running a social marketing consultancy, or pet-sitting. Instead of first building a Facebook page or stocking up on inventory, they said “yes” to the opportunity in front of them, and their side-gigs grew from there.
2. Letting the first failure stop your progress
Almost all established side-giggers experienced some kind of setback early on, and many still experience occasional failures: a pitch gets rejected, a client gives negative feedback, or a new digital product flops. “But they keep going,” Palmer stresses, “because they know that one rejection doesn’t mean their contributions are worthless. Instead, they take it as proof that they are trying something new and taking risks, some of which are bound to fail.”
3. Thinking you’re earning too little to make a difference
Many side-giggers make what seems like peanuts: $100 to $200 a month, or just a few thousand dollars a year. Over time, however, that money adds up—$3,000 a year equals around $40,000 after ten years if it’s in an account earning 5 percent interest. Plus, it represents new promise and potential in the event of a layoff. “An income of $200 a month, earned from working a few hours a week, can often be scaled up dramatically if time allows,” Palmer points out.
4. Overinvesting in start-up costs
It’s easy to plow savings into a side-gig before it’s even launched: a beautiful website, a professional marketing plan, new certifications. But before investing a cent, successful side-giggers often look for ways to bring in revenue, while simultaneously testing the market. That might mean offering nutrition consulting services before setting up a new website, or selling an e-book through an e-commerce channel before printing paperback versions.
5. Working too hard for too little
When side-giggers are first starting out, they sometimes make the mistake of undercharging for their services, or setting up a business model that would require a 100-hour-a-week schedule to earn a living wage. A classic example is selling a handcrafted crocheted sweater for the same price as a store bought, machine-produced one. “Simply charging more for products and services can signal quality to potential buyers,” Palmer observes. “Testing the market to see what it can bear, and checking out competitors’ prices, can help side-giggers avoid starting too low.”
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