Mackenzie, 26, from Melbourne, FL, works “four or five” jobs and side hustles. She considers herself an entrepreneur, but she’s drained her retirement savings and emergency fund — racking up thousands of dollars in debt — in the process.
She told Caleb Hammer on a recent episode of Financial Audit that she used to work as a project manager at Walmart, making around $50,000 a year before she quit [1]. She took money out of her 401(k) to buy a car, drained $14,000 in savings and racked up debt as she starts a nail salon business — all of which she blames on “girl math.”
“Girl math” is a term that emerged from TikTok as a way to describe the “seemingly intricate and often ridiculous ways women justify an extravagant or unnecessary expense,” according to a social media glossary from Later [2].
Hammer was opposed to her using the phrase, saying, “You’re going to make everyone hate women … Why bring to your entire gender this negative connotation that you’re unable to manage money?”
Now, Mackenzie is making about $500 a month as a nail technician — a business she just started — splitting $742 a month in rent with another technician. That works out to $6.25 an hour for 20 hours per week. She also spent a few thousand dollars on startup costs because the “old salon stuff” had “bad energy.”
“Well, I girl-mathed the hell out of it and it made sense to me in the moment,” she told Hammer.
Mackenzie also has a part-time job at a burrito restaurant, working an average of about 20 hours a week at $15 an hour plus tips.
“So to be clear, you make three times what you make [doing] nails … and you work just as many hours doing that,” said Hammer.
Here’s why her “girl math” doesn’t add up.
There are about 31 million small businesses in the U.S., according to the Small Business Administration. The vast majority, or 25.7 million, have no employees.
While 26% of entrepreneurs started their own business because they were passionate about a business idea or saw a unique opportunity, according to a HubSpot survey, 54% cited struggles with earning and maintaining financing as the most pressing issue they run into [3].
Here are some common mistakes when starting a business — and what to learn from Mackenzie’s mistakes.
“Winging it” is not a business plan. “I’m flying by the seat of my pants. I don’t have an actual plan,” Mackenzie told Hammer.
Use “girl math” as an excuse all you want, but it’s not a great idea to start a new business without understanding how a business actually works. That might mean taking a few business courses, such as accounting and marketing, so you can make the math work. Or it might mean working for someone else for a few years to gain the skills you need.
The U.S. Small Business Administration (SBA) recommends that your business plan includes a company description, market analysis of your industry and explanation of your business and management structure, along with financial projections. It should also explain how you plan to market your business.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
If you assume you can write off all your expenses — and you’re making purchases with that mentality — you could be in for a rude awakening come tax time.
There are items and services that you can claim as a business deduction, which will reduce your overall taxable income and therefore your overall tax bill. But deductions are complex; in some cases, you have to break it down by the portion used for business (vs personal use). There are also limits on tax deductions.
The IRS has a list of business credits and deductions, and how to claim those on your tax return. But just saying you “girl mathed the hell out of it” isn’t going to help if you get audited.
Starting a business comes with a lot of expenses, such as rent, utilities, supplies, inventory and startup costs. So if you make that investment and just expect customers to start showing up, you could be setting yourself up for failure.
This is where a solid business plan with market research can help. Are you offering a product or service that people need or want? In this case, how many nail salons are in Mackenzie’s neighborhood? Is the market already saturated? Is she offering something unique?
Before leaving a job, you may want to build up a solid base of loyal customers — and build up your reputation — before draining your savings and going out on your own. You’ll also need a marketing plan to help bring in new customers (advertising isn’t the same as marketing).
While being an entrepreneur can be rewarding, it takes an incredible amount of work to be successful. It’s also worth considering your future stability, such as the health benefits and retirement matching that come with a stable, full-time job.
Finding success may also come down to timing. If you don’t have a business plan, funding or a customer base, you may want to postpone the launch of your business until those are in place.
As Hammer tells Mackenzie: “I’m not saying you can’t be a nail tech. I said you need to put in the work with other people and build up clients, not immediately go into your own business and spend $7,500 to make $500 a month.”
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[1]. YouTube. “Girl Math Final Boss | Financial Audit” [2]. Laterl. “Girl Math” [3]. HubSpot. “The State of Entrepreneurship Report: Key Findings From our Survey of 200+ Business Owners”
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