Now’s the time to Start a Side Hustle: 5 Must Know Tips & Ideas
Posted on May 10, 2021 in Money
Is now the time for you to start a side-hustle? If it is, do you know what you have to do to get ready for your next phase in life? Starting a new business while maintaining a full time job may seem daunting. While it’s true that you must become realistic; you must be clear-minded. Your dreams must be tethered to reality to start a business, and to help you navigate a potential new venture we’ve laid out our top tips and sides hustle ideas below.
There are five basic questions you must ask yourself. The better you answer these questions the more likely you are to start a side hustle successfully. Before you start, you have to decide what it is you’re going to do. Choose a vocation you’ve already mastered (or can master) and settle upon it firmly. Next, you must secure your finances. Have your money in order. It’s best to be debt free. Be sure you have cash reserves, and a way to continue generating funds. When you start a side gig, it should pay for itself. This begins with having enough money to get your enterprise off the ground. Do you have enough extra cash yourself, or do you have to go through fundraising?
Part of having your money in place is knowing your out of pocket expenses. What will it take to run your side business? Can you do it all on your own, or will you need help from friends, family, contractors or employees? Answer those questions up front, or project them as best you can. Just as in personal finance, planning your expenses ahead of time is a lot more affordable than paying for mistakes you make later. If you’re considering going into business with your significant other, you may also want to read more about the best side hustles for couples.
Finally, as you are deciding, go into your side-hustle with a clear sense of how you want to live. What kind of life do you want to have when your finances improve? Earning more money is about living better. Measure your improvement by how closely it hews to your vision of the future.
Here are five tips for starting a successful side-hustle and getting to that vision of a brighter, freer future.
1. Decide What You Want To Do for a Side Hustle
If you’re debating what to do for a side-hustle, it’s best to start with what you like. Are you already in the field you wish to pursue? If that’s the case, then you’re already doing the thing you love, and probably just need some new ways to monetize it. Even if you’re going to branch out a little, the criteria are the same. Choose something you like. Here are ten quick samples of some of the more popular and common side hustles:
- Freelancing – You can contract for work you’re skilled to do. Make sure you don’t undercharge.
- Provide Childcare – See to juveniles for individuals or institutions.
- Teach or Tutor – Instruct someone else in the skills you already possess, either through an online course or in person services.
- Provide A Personal Service – Perform anything from dog-walking to personal shopping.
- Sell New Or Used Items – Learn how to make money reselling: sell something of value, either online or offline.
- Perform or Entertain – If you have the talent, use it now.
- Become A Virtual Assistant – Be a go-to person for someone in business.
- Become An Online Influencer – Leverage your online traffic for sites that need it.
- Do Online Surveys – Answers questions and joins studies for research organizations.
- Do Uber, Lyft Or Other Vehicle Transport – Register with legitimate entities to provide transportation for people or goods.
As you’re deciding, remember the term side-hustle implies you’re keeping your day job. If you suddenly lose your spare time, because you’re using it to make more money through a part time job, you’d better be doing something you’re likely to enjoy. This is especially true if that side hustle is supposed to be your main source of income some day. Begin and end with doing what you like, and much of the rest will follow.
Once you decide what you’ll be doing, you must look at the market for the goods or services you’ll provide. Choose something the public needs. Reinventing the wheel only works if somebody’s looking for a new wheel. Even if you love doing a thing, it doesn’t matter if nobody else loves seeing you do it. Chances are there’s more than one thing you do well, however. Before settling on a vocation, make sure the market exists and is healthy enough to sustain you. This can be as simple as asking around or as complicated as developing surveys, pursuing focus groups, or hiring market research experts.
Creating your business legally, is of course the next step. In a nut shell your choices are:
- General Partnership
- Limited Liability Company (LLC)
- S corporation
- C corporation
- Sole Proprietorship
Each of these forms of business has its own benefits and drawbacks. From the exposure of your personal finances and liability with a sole proprietorship, to the asset protection of the corporation (not to mention the flexibility of partnerships or S corporations) it’s better to get the help of real professionals when making this all-important decision. It’s much harder to ‘unmake’ a business or transform it once you’re underway. The proper decision will help you decide how to run your side-hustle, how you pay taxes, and how you grow.
Lastly, when you’re deciding what business to get into, you should look at the costs and how long it takes to turn a profit. Will this turn into a passive income for you? If you can’t make money, then your side-hustle is just a hobby. Do a cost-benefit analysis, and a simple business plan, to see if your chosen vocation is worthwhile to earn extra income.
2. Secure Your Finances and Pay Off Debt
We hinted at it earlier, but let’s go into detail. Are you in debt? If so, how much? If you’re not in debt, will you go into debt by pursuing your side-hustle? If the answer to either one of these questions is yes, you need to wait until you have a clear path to be able to answer ‘no’. Maybe your side-hustle will eliminate the debt quickly, and be worth it. If you’re having trouble calculating these ratios, or are getting fuzzy answers, you should consult professional accountants or marketers, until you arrive at answers that are firm and clear. Debt is a problem that doesn’t eliminate or correct itself. Your side-hustle is either profitable, or it shouldn’t be embarked upon. If you need assistance taking care of your finance before starting a side hustle, you may want to consider if debt settlement is worth it.
3. Secure Your Financing
Once your personal finances are in order, it’s time to secure money for your business. If you have the money at hand, it may be preferable to self-finance your side-hustle. The obvious benefit to this is you’ll owe no one, and all profits are immediately yours. Most side-hustles, frankly, will follow this model. There’s nothing wrong with starting small and growing into the business size you want. Dreaming too big for your wallet has no upside. Start with the money available to you, and be very hesitant to stretch beyond it.
There may, of course, be particular circumstances that warrant taking the chance of some debt, when you start your side business. If you see clearly where the money is returned to you, by all means, proceed with due caution. The test is to do what works for you. Will your financing achieve your goals? If you have concrete assurances, it may be worth it to take some risks.
4. Consider Your Hires
The first (and possibly last) employee your side-hustle will have is you. If that works, so be it. You may need to take on contractors or employees for tasks you can’t perform yourself, however. For legal transactions, such as incorporation or sales contracts, you must have a lawyer. There’s no substitute for trained professionals in a field so fraught with opaque wording and mixed reasoning. Likewise, you must have a qualified accountant when doing true business taxes. The liability for getting things wrong is simply too great to justify getting by with amateurs. You can use friends or family for simple support functions and moral backing, but develop a slate of legitimate professionals in any aspect of your business where true expertise is required.
5. Plan for the Future
Look ahead, and plan ahead. A side hustle looks like an expanded hobby to the casual observer. Anyone engaged in the endeavor, however, knows differently. You’re engaged in legitimate business, and you need to have a plan that takes your longtime desires and short term goals into account.
The Bottom Line About Starting a Side Hustle
Only you know where you want to be one, two, five and ten years from now. Likewise, only you know what you’re able to accomplish day-to-day. Have a plan that connects all these timelines, and make sure they complement each other. It doesn’t pay to imagine yourself a captain of industry in five years, when you can’t make yourself focus on your side-hustle for a single afternoon. You don’t have to force yourself to be a different person or a business owner, but you do have to be the best version of the person you are. Set your goals, and stick to them. When you deliver, you’ll see the reward in more income, as well as the secure knowledge that you’re ready for what comes next.
Related blog posts
Need expert financial advice?
Let TurboFinance connect you with the best consulting services and resources to help you take control of your finances and find a path to build wealth.Get A Free Consultation Today!