Planning a Side Hustle: What you need to think about before starting a side business
According to software company Zappier, 40% of Americans have a side hustle, and that number is growing. Planning a side hustle is a great way to pad your savings, pay down debt, save for a specific goal, or give you some extra wiggle room in your monthly budget. However, if you’re looking to add a side hustle, there are a few things you should know before you begin, and it starts with a plan.
Have a Plan and Goals
There are many types of side hustles available. The list is seemingly endless and growing all the time. So, rather than listing all the potential side hustles you might do, consider your specific goals. Do you want your side hustle for the short or longer-term? What goals are you aiming to achieve, and how much money do you need to reach your goals?
Consider Your Interests and More
Aside from goals, also think about where your interests lie. You’ll enjoy your side hustle more if you choose something you already enjoy or are interested in pursuing. A hobby, perhaps? That’s one option, but there are many others. Consider your current skills, experience, and knowledge as well. Then research how and where you can use your gifts to fulfill a need within your community or online.
Remember, depending on what type of work you choose, you can work your side hustle within your own community or virtually.
Determine Your Time Investment
Another consideration is determining how much time you have to invest in your side hustle. Some side hustles are more time-intensive than others. Some later grow into full-time careers. Others remain per diem or part-time jobs.
If you’re already working a full-time job, consider what other responsibilities and obligations you have outside of work that might interfere with your side business. Knowing how much time you can reasonably commit to your side hustle will prevent you from overcommitting and help you find a schedule that works for you.
What is Your Financial Investment?
Depending on the side hustle, you might need to invest in your side business to get it up and running and to maintain it, your skills, and your competitive advantage. This investment is normal for any business, and that includes side hustles. Like other businesses, you’ll have your share of competition in the market. You’ll need to invest in yourself to stand out from your competition, but take care not to overdo it while your business is still new and in the pre-launch or launch phase. Remember, your side hustle should help you earn money, so rationalize spending by determining whether you have an immediate need for your business or whether that thing can wait a bit longer.
Market Your Business for Success
Marketing your side hustle is essential for your success, but that doesn’t mean you must pour money into a professional marketing campaign while you’re still new. A campaign might be something to consider later, once your side hustle earns more.
For now, start with organic marketing tips. In other words, market yourself in ways that cost little to nothing. Use social media to your advantage. Start a blog and talk about your products or services, why people might need them, and offer valuable tips on what problems your products or services might address. Build value and keep things interesting to capture your readers’ attention and delight your followers. Also, remember that it takes time to build a following. Rarely does success happen overnight.
Network within your community. Don’t be afraid to reach out to others who fit your idea of the ideal customer, but for that, you’ll need to do your research. It’s more work, but the payoff can be greater.
Set Reasonable Financial Expectations
Set reasonable expectations for what you expect to earn when starting out. Launching a business, even a side hustle, takes time. Yet, as with other business ventures, it can still be rewarding and successful as your business grows.
As you begin to earn money from your side hustle, don’t neglect your savings. This advice is crucial, especially if you later decide to transform your side hustle into a full-time business. Since side hustle income tends to ebb and flow, you’ll want to plan for those leaner times. You’ll also want to plan for moments when the market is unpredictable. Aim to build your emergency savings to cover 9-12 months of expenses if you intend to transform your side hustle into a full-time career later. If not, aim to cover at least 3-6 months of expenses.
You’ll also want to establish a business savings account if you aim to maintain your side hustle for a long time. This account will help you cover things such as self-employment taxes, any insurance you might need like professional liability insurance, equipment or subscriptions you may require, and upskilling, among other necessities. A business account helps you keep business income separate from personal income, giving you a leg up during tax season by making it easier to see what expenses you might be able to write off and how much income you earned.
Tracking your income, expenses, and business loans is essential to your success. Extraco Banks offers useful calculators and tools specifically designed for entrepreneurs and small businesses like yours. Check out the business tools on our website today.
The Final Word
Starting a side hustle is an exciting time and can help you reach your goals sooner, whatever they might be. Launching a side hustle is also a lot of work, but you don’t need to go it alone. Partner with Extraco Banks for the financial needs of your business, and let us help you reach for your dreams.