I Started A Side Business With $200 And A Lot Of Fear (Here’s What I Wish I Knew First)

I Started A Side Business With $200 And A Lot Of Fear (Here’s What I Wish I Knew First)

I started my first side business in my kitchen on a Tuesday afternoon while my kids were at school.

No business degree. No fancy plan. Just an idea, a laptop, and a growing feeling that I needed to try this before I talked myself out of it forever.

Three years later, that side business pays a chunk of our mortgage every month. It is not a million dollar empire. But it is real income doing something I actually like, and I built it while keeping my day job.

If I could go back and tell myself what actually matters when you are starting out, here is what I would say.

The Opinion I’m Standing On

I think most business advice is written for people who already have money, connections, and time to waste.

The reality for most of us? We are starting with limited cash, no network, and trying to build something in the margins of an already full life.

You do not need a perfect business plan. You do not need LLC paperwork before you make your first sale. You do not need to quit your job and go all in.

What you need is to start small, stay legal, and build systems that do not fall apart the second life gets chaotic.

This is not sexy advice. But it is honest advice from someone who did it the messy way and figured out what actually works.

Step 1: Validate Your Idea Before You Spend A Dime

Here is what I did wrong. I spent three weeks building a website, designing a logo, and planning a whole product line before I had a single customer.

Here is what I should have done. Ask five people if they would actually pay for what I was planning to sell.

Validation is not complicated. It is asking potential customers “Would you buy this?” and listening to what they actually say, not what you hope they will say.

If you are not sure where to start with the business side, I picked up Starting a Business QuickStart Guide and it walked me through the basics without overwhelming me. It covers validation, legalities, pricing, and marketing in plain English.

Ways to validate fast:

• Post your idea in a Facebook group where your customers hang out. See if anyone responds.
• Offer a pre-sale. “I’m thinking about making X. Would you buy one for $Y?”
• Do one job or sell one product manually before you build systems around it.

If nobody bites, that is information. Either your idea needs tweaking or your audience is wrong. Better to know now than after you have invested hundreds of dollars and hours.

Step 2: Start As A Sole Proprietor And Upgrade Later

You do not need to form an LLC on day one.

I know that is controversial. Every business guru says “protect yourself with an LLC immediately.” But here is the reality. If you are just starting out, testing an idea, and making your first few sales, you can operate as a sole proprietor.

A sole proprietor means you and the business are the same entity for tax purposes. You report income on your personal tax return. Done.

Once you are making consistent money, have employees, or face real liability risk, then form an LLC. But in month one? You are overthinking it.

Check your local requirements. Some cities and counties require a business license even for sole proprietors. In Houston, it depends on what you are selling and where. A quick call to the city or a Google search will tell you.

Start simple. Upgrade as you grow.

Step 3: Separate Your Money From Day One

This is the mistake that bit me hard.

I used my personal checking account for business expenses for the first six months. When tax time came, I spent an entire weekend digging through statements trying to figure out what was business and what was personal.

Never again.

Open a separate checking account just for the business. It does not have to be a fancy business account. Some banks let you open a second personal checking account for free. Use that.

Every dollar you earn from the business goes into that account. Every dollar you spend on the business comes out of that account. This makes taxes so much easier.

If you struggle with tracking personal finances, here’s how I finally built a budget that stuck. Same principles apply to business money.

I also grabbed this simple accounting ledger to track income and expenses by hand. I am not doing complicated bookkeeping. I am just writing down what came in and what went out. At tax time, I hand it to my accountant and we are done.

Step 4: Save Every Single Receipt

Business expenses are tax deductible. But only if you can prove you spent the money.

I keep this accordion receipt organizer in my car. Every time I buy something for the business, the receipt goes in the organizer, sorted by month. No digging through emails. No lost receipts. Everything in one place.

At the end of each month, I take 10 minutes to log the receipts into my ledger and file them.

This system saved me hundreds of dollars in deductions because I had proof of every expense.

What counts as a business expense?

• Supplies and materials you use to create your product or service.
• Software and tools you need to run the business.
• Mileage when you drive for business purposes (track this).
• A portion of your home internet and phone bill if you use them for business.
• Marketing and advertising costs.
• Fees for payment processors, website hosting, etc.

When in doubt, ask an accountant. But save the receipt either way.

Step 5: Set Your Prices Like You Actually Want To Make Money

This is where I messed up for an entire year.

I under-priced everything because I was scared nobody would buy if I charged what it was actually worth.

Here is what I learned the hard way. People who only buy based on the lowest price are not your customers. They will leave the second someone cheaper comes along.

Your prices should cover:

• The cost of materials or your time to create the product/service.
• Business expenses (software, tools, fees).
• Taxes (set aside 25 to 30% of your profit for taxes).
• Profit. Yes, you are allowed to make money.

If you are not making a profit after expenses and taxes, you have a hobby, not a business.

I used this business planner to map out my pricing and profit margins. Seeing it written down made it real. I was not being greedy. I was being smart.

Step 6: Get Comfortable Sending Invoices And Following Up

If you are providing a service or selling to other businesses, you will need to invoice people.

I bought these carbonless invoice books for in-person transactions. They are old school, but they work. I write the invoice, tear off the top copy for the customer, and keep the carbon copy for my records.

For digital invoices, I use free tools like Wave or PayPal invoicing. They let you send professional invoices, track payments, and send reminders when people are late.

Speaking of late payments. You will have to follow up with people who do not pay on time. It is uncomfortable at first. But your bills do not wait because someone “forgot” to pay you.

A simple follow-up email:

“Hi [Name], just checking in on Invoice #123 from [date]. Let me know if you have any questions. Thanks!”

Most people are not trying to stiff you. They are just disorganized. A polite nudge gets you paid.

Step 7: Treat Networking Like Planting Seeds, Not Harvesting

I used to think networking meant going to events, handing out business cards, and hoping someone hired me.

That is not networking. That is sales. And it feels gross.

Real networking is building relationships before you need anything.

Join local Facebook groups for small business owners in Houston. Comment on posts. Offer advice. Help people.

Go to community events. Not to sell. Just to meet people.

When someone asks what you do, tell them. But do not pitch. Just connect.

I keep this business card holder in my bag so I always have cards on me. You never know when you will meet someone who knows someone who needs exactly what you offer.

Half my clients came from casual conversations at coffee shops, kids’ sports games, and neighborhood events. Not from ads. From real human connection.

Step 8: Build Systems Before You Need Them

When you are just starting, it is tempting to wing it. You will remember everything. You will know where all your files are.

Then you get busy. And everything falls apart.

Build simple systems now:

Client information. Keep a spreadsheet with client names, contact info, project details, and payment status.

Contracts and paperwork. I use this portable document organizer for all my business paperwork. Contracts, tax documents, receipts, licenses. Everything in one fireproof, organized place.

I learned this the hard way when I was trying to organize our home. Systems save you when life gets chaotic.

Templates. Create email templates for common situations. New client welcome. Invoice sent. Follow-up. Project complete. Do not reinvent the wheel every time.

Shipping labels if you ship products. I got this label printer after hand-writing shipping labels for six months like a caveman. Game changer. Print, peel, stick. Done.

Systems make you look professional even when you feel like you are making it up as you go.

Step 9: Set Boundaries Or Your Business Will Eat Your Life

When I first started, I answered emails at 9pm. I took calls on weekends. I said yes to every request because I was terrified of losing customers.

That is not sustainable.

Set business hours. Communicate them. Stick to them.

“I respond to emails Monday through Friday, 9am to 5pm.”
“I do not take calls after 6pm or on weekends.”

Real customers will respect that. People who do not respect your boundaries are not the customers you want anyway.

You started this business to have more freedom, not less. Protect that.

Step 10: Pay Your Quarterly Taxes Or Regret It Later

If you are making money as a sole proprietor or LLC, you probably need to pay estimated quarterly taxes to the IRS and your state.

I did not know this my first year. I got hit with penalties and a massive tax bill in April that I was not prepared for.

Now I set aside 30% of every payment I receive in a separate savings account. Every quarter, I pay estimated taxes online through the IRS website. It takes 10 minutes.

Talk to an accountant. Seriously. A one-hour consultation will save you thousands in mistakes and penalties.

What I Would Do Differently If I Started Over

I would start smaller. I tried to do too much at once. Pick one product or one service. Get really good at that. Then expand.

I would invest in help sooner. I tried to do everything myself for way too long. Hiring a bookkeeper and a virtual assistant freed up hours every week.

I would celebrate small wins more. I was so focused on “not being successful enough yet” that I did not appreciate going from zero to paying customers in two months.

And I would trust myself sooner. I spent so much time looking for permission or validation from others. You do not need permission. You just need to start.

Same lesson I learned when I decided to learn a new skill at 35. You don’t need permission. You just need to start.

You Do Not Need To Have It All Figured Out

Nobody starts a business with all the answers.

You learn by doing. You mess up. You adjust. You try again.

The people who succeed are not the ones who had perfect plans. They are the ones who started before they felt ready and figured it out along the way.

If you are waiting for the right time, the right amount of money, or the right level of confidence, you will wait forever.

Start messy. Start small. Start now.

You do not need to quit your job. You do not need a big investment. You do not need to know everything.

You just need an idea, a willingness to try, and the guts to keep going when it gets hard.

Three years ago, I had no idea what I was doing. I still do not know everything. But I know a lot more than I did, and I built something real in the process.

You can too.

The Bottom Line

Starting a business is not about having a perfect plan. It is about taking the first step and figuring out the next one as you go.

Keep your money separate. Save your receipts. Charge what you are worth. Build simple systems. Protect your time.

The rest you will learn along the way.

You are more capable than you think. You just have to start.

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