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It all began four years ago. I was thinking about starting a new business, and e-commerce seemed like a good way to go. Last year we made over $250.000 in sales, and even though these numbers don’t look bad, I am thinking about shutting it down. Closing a door and abandoning something that you have put so much effort into building is not easy. But the decisions we make shape our future, and we should always take the time to reflect before taking them. For sure, there is no short answer to that but thinking about closing a side hustle is already a sign (the same goes for relationships)

How and why did I start this e-commerce business?

At that time, I was working as a freelance web developer. I had regular customers with whom I worked part-time on a weekly basis. So I was not too worried about earning money, and I also had some free time. When it comes to business, I was always an advocate of selling products rather than working hourly. Because I think that you cannot scale a business if it is based on your time. Even if you raise your rates, you will still have limitations. So I started thinking about what I could sell online. I have concluded that natural cosmetic products were booming and since I had some connections in that field. I thought this was a good choice. It was a growing market, and I had these advantages. I was also hoping to automate this side hustle so that after a few years, it doesn’t rely on me anymore. 

What happened then

I had a little bit of money to start with, and I wanted to invest it in advertising. So I talked to these cosmetic companies, and they agreed to allow me delayed payments. In the beginning, I was working on it by myself, but after a few weeks, I knew that I needed to hire people to help me with orders fulfilment and social media management. Year after year, we grew the company to a five members team responsible for order management and fulfilment, customer support, social media administration, and general execution. The business was stable yet not growing as much as I wanted. But we were able to sustain it and experiment with different approaches. Many things happened along the way, like Facebook Ads changes in his algorithm and ad prices, competition, COVID-19, and many other things, so that we had to adjust and make changes every time to stay on track. We also started creating our own products. Those were white labels by the producers, so we just had to create a brand, which was very interesting and energy-consuming at the same time. 

Working on my side hustle – a profitable e-commerce business

The Status Quo

I think before making a decision, you should analyze the situation and see it from different perspectives. After four years, I can reflect now on what I have and want to achieve. To make things easier, I just created three categories: Money, Time, and Future:

Money (the good)

The business was able to generate some extra money. It was not a lot, but some years I was able to save the money I was earning from freelancing. Actually, I could have earned the same if I had just taken more freelancing work. The only downside is that the business was fluctuating from month to month. Depending on the age of the running ads, external factors such as summer- and winter sales could vary. Some months we would make a profit. Other months we would lose money. All in all, we were making a little bit of profit which was not bad considering the current opportunities.

Time (the bad)

As I said earlier, I could have earned the same amount of money if I had taken more freelancing work, but that’s not true. Actually, I was working a lot more on this project. I had the vision that one day we could find a product that we could scale. So the amount of work and effort I was putting into this business was much higher than if I were just freelancing. Finally, we found a winner, and with a good ad strategy, we were able to sell a lot of it. After some time, I noticed the mistakes we made. The pricing was not optimal, we could have made it higher, and we didn’t scale fast. We sold the products at a slow pace for an extended period. A year later, as COVID-19 hit us, sales started dropping, and it was also because the advertisement and the products were aging. If you don’t use the time in your favor, it turns against you. So for the following months, we had to create new products, ad creatives, and designs. We were able to sell the products, but after 1-2 months, we had to start this process again. And this is by no means an easy task, and it was way beyond being an automated business.

Future (the ugly)

The possibility of finding a winner and scaling it still exists. But there are always expenses of running the business, and we have to work on new products continuously. Unfortunately, I am not very optimistic about the future of this business. It started with reselling some brands and ended up needing to create new products regularly. For now, there is no stable future in sight, no automation possible, and a lot of continuous effort. I have learned a lot from it, but I didn’t achieve the goal I was aiming for: a sustainable business with stable revenue and not consuming all of my time. I understand that you have to work hard on your project, especially at the beginning. After a while, there should be a clear vision about its future which is not the case here.

According to the U.S. Bureau of Labor Statistics, 44% of businesses fail before five years. You can find a good article about it here https://www.lendingtree.com/business/small/failure-rate/

It’s always Time vs Money when it comes to business

What have I learned from starting this side hustle?

I cannot emphasize enough how much I learned from starting this side hustle. It is a remarkable human experience, and I had to improve many of my skills. On the business side, I learned how to manage a team, recruit the right people, and create a brand and a product (because mistakes were made). I understood the differences between the idea, the execution, and the outcome. You have to take care of the business finances, be sure that everybody is on track and aims at the same goal. Fortunately, I had to deal with this on a small scale, but it is a good foundation. On the technical side, I had to learn social marketing, different advertising platforms, and copywriting. I was able to understand human psychology better. What makes a product sell, and what is essential for customers. Every step matters, and sometimes there is a high price to pay in the end if a wrong decision was made at the start. Some days, I would go to the office and think, why am I doing this? What do I have to do with selling cosmetics? I know that I love creating stuff, and growing a business is my dream, but somehow it didn’t feel right. At that moment, I understood why so many people tell you to do the things that you love. Because if it is meaningful to you, then you will enjoy doing it. At the end of the day you should do it, but not just for the money.

The rule to apply

This is a general rule that I am going to apply whener I have to meet a similar decision in my life in general. the reasons I am shutting down this side hustle and that I would use in my life in general are:

  1. The Fun: If it is something that I am not particularly interested in. In other words, it is not fun to do, I should stop doing it.
  2. The Time-Money ratio: If it is not well balanced and I am investing too much time and putting a lot of effort but not getting a good return, it is probably the wrong way to do it.
  3. The long-term benefits: If there is no vision for the future, it is probably not worth the effort.

As you can see, fun comes in the first place. If it is fun I should do it. From now on, I will always look to do things that I love and bring me joy. If that is not the case and I am earning a decent amount of money with it (compared to how much time I am spending on it), then it is fine to keep it. Lastly, if there is a vision for the future that justifies the sacrifice of my time, then I will keep doing it until seeing the results that I am aimed at. If none of these rules apply, then quitting is the best option.

Conclusion

Closing this chapter and turning the page seems to be the best decision to take. I feel the need to refill my energy level and adjust my life to enjoy the moments that I have. Time is our most valuable asset, and if I can find financial freedom with a business, I would have made a big step forward in my life. I don’t think that I will abandon the idea of starting a business someday. I genuinely think that I have gained enough experience to know how I should approach businesses, but for now, I will just have a break from trying to build anything new. Now I know that my future projects have to be meaningful and add value to me and others. They have also to be fun, and I will have to plan the automation and get enough funds from the start.

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