Ideas are a dime a dozen!
Everyone has had many of them, and quite a few of them have been brilliant by themselves. But it is all about execution, commitment and the willingness to spend time on your hustle.
But even if you have the time, to commit and do your best, you can still fail. That is normal in the world of business, no matter how much you like it. Most businesses fail within three years of starting and most of them don’t make it to the 10-year mark. This should show you how hard it is to start a business. Even worse, it is estimated that 10-20% of the companies in the UK are just on the brink of failure and barely existing. While those stats could be disheartening for someone who is looking to start a business, it is important to understand what the drivers of those statistics are. What are the myriad of reasons that can cause your amazing adventure to come to an end. And it is eye-opening how obvious most of those are, but still, businesses neglect them.
This week’s article will highlight the 8 most common reasons why your side hustle might fail.
There are two distinct categories where those fall in. Internal problems that are caused by the founder (you) and external that are related to the market. Interestingly, both categories apply to most side hustles, hence why I will do my best to cover both of them.
Now, let’s start:
1. The idea was not well-validated
This is a classic problem! Many people find an idea and jump into it, while that is a great way to approach the need to move quickly and break things, it is a double-edged sword. They fall in love with the idea and forget to check if anyone else needs this product.
But if you don’t vet your idea, you can completely miss the point as many things sound good on paper, but are either practically impossible to achieve or there are 2 more people who have the same problem and they are probably in the same room as you.
Or you might end up with a side hustle that is not at all needed, even worse, it can be slightly off target and work just right for a bit and then stop working.
That is why, it is extremely important to start small and explore the market. See if there is a need, if there is competition and more importantly try and see if anyone else has done it before. Because there are 8 billion people on this planet and if no one else is doing it, there might be a big need or no need.
2. You don't have enough time to dedicate it to the project
A side hustle requires time, it is not something you do a few times for 2 hours and it goes away, that is not just “drinking and painting”. It requires a consistent dedication of time to start producing results. For example, for this blog, it takes me between 5 to 10 hours a week to publish an article. That includes all the time to research a topic, take notes, start writing and then preparing and post the article. If next week I decide I don’t have that time, the article would not magically appear here and there would only be me to blame.
And I know quite a few people who started something, grew it to a certain point and then all of a sudden they no longer had the time to work on their side hustle. This is understandable, but it is also a big reason why many side hustles fail.
3. Rush to Minimum Viable Product (MVP)
Building the minimum viable product for your venture is the most important part of your business journey. But plenty of times the founder (you) doesn’t want to be patient and want to rush and cobble together a problem and start selling it.
Don’t get me wrong, it is important to test your product and see if there is a need for it but you shouldn’t rush. You should take your time and build your product market fit, otherwise, you risk that you will build what you want to build and not what people actually need.
On the other hand, if you rush, you might build something completely different than what the market needs and what people want. This might cause you to get no sales and close out the venture.
To avoid this, you should simultaneously build your product/ service/ offering and check with the potential customers what they like/ dislike and how you can improve it.
4. No one is doing what you want to do
If you are trying to cover a well-known niche and you have found a gap in the market, you either found a gold mine or you found nothing. Because if there is a huge market with many players and no one is doing what you found, it might not work. Plenty of people might have tried to do what you are trying to do, but there might not be enough people who care about it.
At the same time, if you do your market research and see that people want it, you have found a gold mine!
Recommended by LinkedIn
5. Not pursuing the right hustle
It is simple, not everyone is made for every business. You need to find “the one” that speaks to you the most, the one that you can fall madly in love with. Not just jump on the one side hustle that can make you the most money.
The problem here is that if the founder (you) is not excited or in love with the side hustle, you are 99.99% guaranteed to fail! Because that is what is going to keep you going on the grey and rainy days when you could go party, but you need to push your side hustle. So if you are not in love with what you do, I’d recommend you to start building your bridge towards something you are passionate about and enjoy life more!
6. Not making enough money (duh!)
It might be obvious, but many businesses fail because they don’t make money. That could be because they have mispriced their products, didn’t sell enough or had other costs that outweighed the money the business made.
This would result in the company being run at a loss for as long as the founder (you) can sustain it and then fall to its inevitable demise. So, if you don’t want this to happen to you, make sure you have good cost control over where you spend money and how you price whatever you are selling.
When it comes to side hustles, this might also come in the form of the founder (you) being able to make more money just by taking some overtime at work. While that could be alluring don’t forget why you started your side hustle.
7. Not working on the business but on the perception of it
This is simple, many people like the idea of being seen as someone who is making something, working on an idea or pushing a side hustle. Simultaneously, they might not be doing anything, but just talking about having a side hustle.
The good thing is that this is what accounts for a small amount of side hustles that people start, and in general, those ventures were doomed from the start.
8. It is not a business you want to do in the long run
Many side hustles take a lot of time to pick up steam, in fact, this blog used to get 1-2 likes a post for the first 40-50 issues. If I was not here for the long run, I would not have made it to article #94!
And here are some interesting statistics about how important this is for podcasts:
And to get in the top 1% of podcasts you need to publish 21 episodes! (that is half a year of work).
This shows you how quickly people lose enthusiasm for their side hustle and how quickly they stop committing time. So if you are not in it for the long run from the get-go, the odds are stacked against you!
PS: I know that not everything is meant to be a 10-book series about the universe and all the planets in it, but make sure you manage your expectations so you are not disappointed.
Achieving anything amazing with your side hustle will probably take a lot of time, blood, sweat and tears to get your side hustle going. If you do it, then commit for the long, and long term, if not, just get a part-time job and pay for your additional needs. Because no good thing happened out of the blue!
And remember, Rome was not built for a day!
Next week it will be time for your mid-yearly personal finance review. The good, the bad and the ugly! In the same way, I will do my review, I will show you how to do yours and more importantly why!
Thank you for reading! All comments and topic suggestions are highly appreciated. Post #94 in the series CFO of Life #si #personalfinance #CFOofLife
