While some entrepreneurs quit their day jobs to follow their dreams, U.S. News & World Report senior money editor Kimberly Palmer started a side business because she was worried about the stability of her dream job.
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“I felt a lot of financial stress myself in 2009, at the height of the recession, and I felt I had very little job security – people were getting laid off all the time,” says Palmer.
Spurred by the need for a backup plan, Palmer launched a business in 2011 selling money workbooks on Etsy – an experience she talks about in her new book, “The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life,” out this month.
“I discovered a whole world of people doing the same thing, starting side businesses. It really was becoming a big trend,” says Palmer. She calls these on-the-side gigs “micro-businesses,” which she defines as businesses that may not be paying the mortgage but are providing another source of income.
Today a micro-business owner herself earning approximately $200 per month from her online shop, Palmer shares her five tips for anyone looking to launch a business on the side.
No. 1: Figure out what you have to offer.
Before starting your own business, Palmer says it’s necessary to get a sense of the overall market, and where you might be able to fit in.
“Go to popular ecommerce sites like Etsy, or sites like Fiverr, Elance or Freelancer.com, to see how people are making money,” says Palmer. (Fiverr is a marketplace for online services costing $5, while Elance and Freelancer.com help people find freelance gigs online.) By exploring online marketplaces, Palmer says budding entrepreneurs can better understand what they might be able to offer that’s unique, or how to price services that others are offering.
No. 2: Keep costs down.
Palmer says a common mistake first-time entrepreneurs make is spending too much to get a business off the ground.
“It’s easy to take advantage of existing ecommerce sites,” says Palmer, like Etsy or eBay. By setting up shop on one of these platforms, Palmer says entrepreneurs can bypass the need for a potentially costly website.
No. 3: Identify your weaknesses.
While you may be an experienced graphic designer, you may not have a lot of marketing or sales experience. Once you figure out what you don’t know, Palmer suggests connecting with other entrepreneurs online to improve your own abilities.
“I copied what the people I admired were doing,” says Palmer. In her case, the key to marketing her money workbooks was getting coverage on popular online blogs aimed at mothers; by reaching out to these writers, Palmer was able to increase sales.
No. 4: Test the marketplace.
“It’s hard to know or predict what customers want,” says Palmer. She says soliciting feedback from clients can help you figure out exactly what’s going to resonate with your target audience. In her personal experience, Palmer started out selling paper money planners, but soon discovered that buyers were more interested in online money workbooks.
No. 5: Embrace challenges.
If you’re a first-time entrepreneur, it’s unlikely you’ll hit it out of the ballpark on your first try. However, Palmer says new business owners can’t let early-stage struggles get them down.
“Know there will be failures and bumps along the road. Being entrepreneurial means there’s going to be rejection. It just means you have to tweak things or slightly change what you’re offering,” says Palmer.