This transcript was generated from the episode audio and may contain minor errors.
[Music]
Sugar-coated advice crumbles cake dreams. What's up, my friends? Welcome to Side Hustle School. Welcome to this week's Failure Friday segment. What's that about?
Well, it's about the principle of learning as much from failure as we can from success, if not more. So we get to hear all these little short stories about mistakes, missteps, disasters in the world of side hustling or small business or entrepreneurship. And so you get to hear directly from a side hustler, in fact, who has struggled in some way. They tell you this short story of something that went very wrong along with the lesson, what we can take away from it, how we can proactively prevent this particular mistake or misstep, or how we can just get some inspiration for responding to difficulties that come along because it's not always a mistake. Sometimes you've actually made a really smart decision, but there's some outside circumstance that comes along to derail you a bit.
So we've got all these different kinds of stories. This one, as I noted, sugar-coated advice, crumbles cake dreams. We're gonna hear from a passionate baker whose custom cake business quickly rises only to fall flat due to misguided pricing strategies and well-meaning, but bad advice from loved ones. In fact, I think that is actually the key point. You can always adjust your pricing, but maybe the key lesson here is getting that bad advice from loved ones.
Your family and friends are not necessarily your best business advisors. So we might come back to that point. But for now, let's hear the story from Emily. Emily's got this story of sugar-coated advice. [Music]
I've always been the go-to person for birthday cakes and special occasion treats among my friends and family.
So when I decided to turn my baking passion into a side hustle, I thought I had the perfect recipe for success. Unfortunately, however, this is more of a story of burnout. It all started innocently enough. I created an Instagram account showcasing my creations and orders started rolling in from friends, then friends of friends and soon complete strangers. I was thrilled to say the least.
My tiny kitchen was constantly dusted with flour and the sweet smell of success and vanilla extract filled the air. But as my order book filled up, I was working around the clock, juggling my day job as a designer with late night baking sessions. The worst part, I was barely breaking even. One problem was my pricing. I had no idea how to properly value my time and skills.
When I first started, I asked my best friend what she thought I should charge. Oh, maybe $30 for a birthday cake? You don't wanna scare people off with high prices when you're just starting, she said. I took her advice to heart. Ignoring the fact that each cake took hours to make and decorate.
As words spread about my quote unquote affordable custom cakes, orders poured in. But with each cake, I found myself cutting corners to save time and money, all while feeling guilty about even charging that much to people I knew. My cousin, who runs a successful tech startup, noticed my stress and offered his two cents. "You need to offer discounts to build customer loyalty," he insisted, "and that's how you get repeat business." Nevermind that he knew nothing about the baking industry or small scale production costs. The breaking point came during wedding season.
I agreed to make a three tier wedding cake for a friend of a friend at a significant discount. I spent over 30 hours on that cake, stayed up for two nights straight, and in the end, made less than minimum wage for my efforts. As I drove home from the wedding venue, I realized something had to change. I reached out to a local bakery owner I admired, hoping for some guidance. Her advice was a wake up call.
"Stop listening to friends and family about your business," she said bluntly. "They're not your target market, and they don't understand your costs." She helped me break down the real costs of my cakes, ingredients, equipment, depreciation, utilities, and most importantly, my time. I was shocked to realize I should have been charging at least three times as much for my basic cakes, and even more for complex designs. But as I looked at these numbers, another realization hit me. Even with proper pricing, this business would never give me the lifestyle I wanted.
I had to face the hard truth. My cake business was a hobby, not a viable side hustle. In the weeks that followed, I found myself drawn to the digital marketing aspects of my failed venture. I enjoyed building my Instagram following and creating content far more than I'd liked baking under pressure. A light bulb went off.
What if I could turn these skills into a new side hustle? Now I'm in the planning stages of a new venture, a digital marketing agency specializing in helping small food businesses build their online presence. It's far less time intensive than baking, has much higher profit margin, and allows me to leverage both my creative skills and my hard-earned business lessons. My cake business may have fallen flat, but it's given rise to a new dream, one that's far better suited to my skills and goals. [Music]
Emily, thank you for sharing the story.
As I briefly touched on, I think the biggest error is in fact listening to someone who is like, "Hey, you're good at this. Why don't you make this a business?" Maybe that's a good idea, but maybe it isn't. Your family and friends are not your best business advisors. You need to get some outside advice. You need to learn on your own.
You need to read business books. I mean, I recommend the side hustle book or $100 startup that I wrote, but of course there's many other books as well. And those books are available at the library, of course. And also not everything you love needs to be a business. So it's good to hear that Emily is gonna move on to something else that will hopefully be much more profitable.
Remember, you have to make decisions that are best for you. Not best for somebody else, not best for someone's idealized version of who they think you should be, the best decisions for you. And so that's what I leave you with here today. But thank you so much for listening. This was episode 2,890.
We've got much more coming up. I'm excited to bring you the final month of the year. It's right around the corner. We'll have an episode every single day. My name is Chris Guillebeau.
You're listening to Side Hustle School. [Music]
From the Onward Project.
