One thing you can say about Millennials is that we BELIEVE in finding an extra source of income.
Often times, that extra source of income comes from a side hustle or a side business that we hope to turn into a full-time business one day. When I first started TMM (The Mogul Millennial), I didn’t realize how expensive starting this would cost (in the beginning, it was just my side hustle).
Over time, my bank account and I soon realized that starting a business wasn’t cheap!
There are sooooo many things that I wish I would’ve known before starting TMM (in particular the startup costs). Below I’ve done the grunt work for ya and have compiled a quick list of everything I wish I knew about before starting a business (or side hustle).
When you’re done reading this, be a friend, and tell another friend about this – this is valuable info that all Mogul Millennials can benefit from!
The Supplies & Cost of Production
This may seem obvious but trust me it’s not as obvious as it seems. One mistake that new side hustlers tend to make is underestimating the amount of supplies needed to start their business. In addition, we tend to underestimate the time needed (aka labor costs) to produce our product or for our service. Last but not least, another forgotten cost is the packaging devil – I can say from experience that packaging costs can be a burden on its own.
Two things that people may not know about me is that I have a beautiful dog named Gracie and I am a lover of essential oils. I’ve always loved for my Gracie to smell nice, and I wanted to use the best products on her. Often times when looking for products for Gracie, I found that many products made for dogs were actually horrible for their fur. I then decided to make my own fragrancec for Gracie to use. After smelling the fragrance on my dog, my friends and fam convinced me that I should start selling it.
Literally a few weeks later, I did exactly that – and opened a quick and cute Etsy shop. Two things that I failed to do was purchase enough startup materials, and I underestimated the cost to make my product and shipping. Once orders came in, I didn’t make a profit because I was selling it wayyyyy to cheap.
With TMM, some of the things that I’ve had to pay for are my content scheduling tools, graphic making tools, email marketing software, invoicing tools, analytics software, and yearly domain name costs just to name a few.
For some of this software that I pay monthly fees for, there is a free version (but in my experience the free version didn’t give me what I need, or it was only useful for a short period of time).
When you get ready to start your business, don’t forget to factor in monthly fees (whether that’s for software, apps, or memberships for a coworking space for you and your team).
Trust me, paying $11.99 here for this monthly membership, and $7.99 here may not seem like a lot, but this will all add up!
Your Website & Logo
If you have a side hustle or biz, you need some kind of online real estate to promote it. If you cannot invest in a professional to create your website, there are plenty of website building platforms that can help you create a nice looking website. For most of these website building platforms, there are free templates that you can use to help build your site, but if you do not see a free template that you like, you may need to purchase one (this can range anywhere from about $30 to over $100 per template).
If you don’t want to spend time trying to create your own website, the cost to find a professional to make your site can be very expensive. If you plan on going this route, make sure you put aside enough money to find a quality person to create you a good -looking, professional website (the cheapest person isn’t always the best).
Along with building your website, you’ll need to purchase a domain and host (my favorite domain registrar site to use is GoDaddy).
When it comes down to creating a logo, you can try creating one for FREE.99 through Canva –
if not this is another cost that you have to budget for (please note, getting a logo made isn’t cheap either). One of my favorite sites that I’ve found success in is through Fiverr.
Fiverr is an online marketplace for budget-friendly freelance services. From everything to making a logo, flyer, graphic, transcribing, site customization, etc., you can normally find a professional freelancer on Fiverr that can help you with your business (pro-tip, read the fine print, reviews, and do your research on the Fiverr freelancer before you purchase).
The Legal Fun
If you know you’ll be earning more than a few hundred dollars a year on your biz or side hustle, you’ll want to set up your business legally. The rules for doing this can vary from state-to-state, so be sure to do your research about the laws and requirements before it’s too late.
Nonetheless, when you start your business, as a founder you need to be sure to form your biz as either an LLC (a limited liability company) or a C corp (a traditional corporation).
When it comes to the structure of ownership, LLCs are very flexible, but if you plan on growing your company and getting investments, you may want to form a C corp. You can find more information on this and other legal services through services like LegalZoom.
By filing a trademark registration, it will protect your brand and prevent the haters from stealing or copying you. The US Patent and Trademark Office (USPTO) has several different types of trademarks and the application fees can vary – on top of this, you may want to factor in the additional cost of hiring a trademark lawyer (which I recommend). To get the process started, it costs around $400 to apply to trademark a business in one category, and additional money if you want to add more categories.
Click here for more benefits of filing a federal trademark registration.
Talking about taxes makes me cringe, but it’s something that can’t be ignored. Some people say that you should plan on at least 25% of your side hustle income going to taxes. To be safe, financial experts recommend that you put aside up to 30% of what you make
for this. Your annual taxes will depend on the type of structure that you selected for your business. With an LLC you can choose whether or not to be taxed as a partnership or a corporation. For a business filed as a C corp, it is usually double-taxed since it issues stock and dividends.
Credit Card Fees
Having a business taking credit card payments results in credit card processing fees. The typical fee is around 2-3% of total charges – yes I know that may not seem like much but it adds up over time!
No matter what avenue your business is in, meeting new people and networking is critical. While there are plenty of free networking events that you can take advantage of, there are just as many that are not free that will be valuable for you to invest in. When you are budgeting for your side hustle or business, do some research on the major conferences that are going to be occurring in the year and add that to your budget. Leave some room in your budget for conferences that you may not initially know of, that you may want to spontaneously attend later.
In addition, once you pay for the conference, if it is not local, be sure to budget in your hotel and flight costs (don’t forget your business cards too!).
Digital Advertising and Marketing
In this new age of social media and its disrespectful algorithms, sometimes investing in ad campaigns can be useful for your business to help market your brand and your product.
If you need help with learning how to create a Facebook or Instagram ad, click here
Google Adwords is another tool that many entrepreneurs have found success with. Google Adwords is a paid online advertising product of Google where you pay when somebody clicks on your ad. For more information on Google Adwords click here
Last but not least, often times businesses find success from hiring an influencer to post about their brand or biz. If you decide to do this, please note that influencers are not for the faint pockets and tend to cost a pretty penny.
Ready to start?
Launching your new business or side hustle is extremely exciting so it can be easy to forget about these small details when preparing to launch. At the end of the day, it’s better to launch your business than to not launch at all, but by being cognizant of the aforementioned items, you’ll be prepared for the expenses that will come your way!