The Essential Guide To Starting A Side Hustle
How would you like some extra cash every month? Because it’s never been easier to make money with a side hustle!
But what does a side gig have to do with emergency planning? As it turns out, quite a bit!
Like emergency funds, side hustles are another effective way to protect your family’s financial well-being. Because the more sources of income you have, the more independent you become. And this means less financial risk for you and your family.
But, having a side gig isn’t just about financial preparedness. It’s also a great way to make a hobby profitable, explore a new career opportunity, achieve a financial goal, or prepare to launch a full-time business.
These days there are tons of ways to make extra income no matter how much time you want to devote. So let’s dive into this essential guide to starting a side hustle.
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What Is A Side Hustle?
A side hustle (or side gig) is a job or business that you pursue outside your regular employment. Your side hustle is different than a traditional part-time job because you are in charge.
It doesn’t matter if you freelance for a few clients, service local neighborhoods, or connect with the masses on the internet. With a side gig, you have the freedom to work and earn on your own terms.
Why Should You Have A Side Hustle?
Some of the most common reasons people pursue a side hustle are:
- Paying For Essentials
- Increasing your income to cover a shortfall in your monthly budget.
- Achieving A Financial Goal
- Attacking a financial goal with extra cash to get out of debt, build an emergency fund, or save for a house.
- Earning “Fun” Money
- Saving for discretionary purchases like restaurants, entertainment, and travel.
- Transitioning To Self-Employment
- Growing your side hustle into a successful business before taking the leap to a full-time business owner increases the likelihood of success.
However, what I love most about side hustles is income diversification. Because the more income streams you have, the less vulnerable you are to financial disruptions in your life.
That’s not to say that your side gig needs to provide a ton of income. Even just a little bit of money coming in can soften the blow of a financial crisis.
In a way, it’s like having a financial emergency plan.
How Do You Find A Side Hustle?
There are a million different ways to make money with side hustles. So how do you brainstorm and evaluate ideas?
Brainstorm Some Ideas
Start by looking for opportunities that already exist in your life. Take some time to consider your:
- What skills or knowledge can you monetize by making, fixing, sharing, recommending, or selling something?
- Anything that experience has taught you could be valuable to someone else either through sharing, recommending, teaching, or coaching.
- Are there any activities, chores, or hobbies you’re already doing that someone else might pay you for?
- Do you own any real estate, automobiles, tools, or other possessions that you could put to work?
Evaluate Your Options
If an idea immediately sparks your interest, then that’s an excellent place to start. However, if nothing jumps out at you, here is a way to evaluate your options:
- Make a list of all your ideas.
- Rate their income potential on a scale of 1 (least) to 10 (most).
- Rate their difficulty level on a scale of -1 (least) to -10 (most).
- Add the two scores together and sort the results from highest to lowest.
A little bit of research should give you an idea of each option’s income potential and level of difficulty. And once you’ve done this rough calculation, you’ll find the sweet spot that balances the two.
One last consideration, whenever possible, try to choose a side gig you’ll enjoy. You’ll be spending a lot of time on your business, and that’s a lot easier when it’s fun.
How Can Technology Help Your Side Hustle?
There are many ways you can use technology in your side hustle, regardless of whether it’s online or offline.
Start An Online-Based Side Gig
Online-based businesses make attractive side hustles because you can pursue them on your own time from the comfort of your home.
Online tools are available, whether you want to sell a product, make a craft, provide a service, teach a skill, or share a unique perspective.
For example, platforms like eBay, Etsy, Fiverr, Udemy, WordPress, and YouTube, can help you build a successful side gig.
Make An Offline Side Gig More Efficient
But that’s just one aspect of using technology in your business. If your side hustle isn’t online-based, technology provides other great tools to save you time and money in areas like accounting, advertising, billing, emailing, and scheduling.
Access Affordable Contractors Worldwide
Additionally, services like Fiverr allow you to access qualified contractors for tasks outside of your expertise. And because it’s a global pool of talent, you can find quality options at affordable prices.
Plan For Success
As with most things, planning is the key to success when setting up a side hustle.
Do Your Research
Before starting a side gig, you should know how much to charge, what costs you’ll incur, and how much effort it requires.
It’s also a smart idea to analyze the competition. Try to understand what they do well, learn from their mistakes, and hone in on what value you can bring to differentiate yourself.
When you’re done with your research, you should have a good idea of your strengths, weaknesses, opportunities, and threats (SWOT).
Write A Plan
A business plan for a side hustle doesn’t have to be complicated. But, going through the process helps you focus your idea into a plan with goals and strategies. And this preparation enables you to make better decisions as you move forward.
Dedicate Some Time
Making your side hustle a reality means dedicating some time to it. Otherwise, it will never become a reality. So, try setting aside time in your schedule every week to work on it.
Essential Legal and Financial Business Tasks
Before you can launch your side hustle, you’ll need to complete some important legal and financial tasks.
Make It Legal
First, you must decide if your business will be a sole proprietorship, partnership, LLC, or corporation. Luckily, a sole proprietorship works for most side hustles and does not require legal paperwork.
However, if you’re going to use a DBA (Doing Business As), have partners, or want liability protection, you need to legally create a business entity.
Register For A Tax ID Number
After establishing your business, you should register for a Tax ID Number, also known as an Employer Identification Number or EIN.
This unique nine-digit number identifies your business for tax purposes. And, it is a much safer option than using your personal social security number.
Get A Business License
You’ll probably need a local business license, even if your side gig only operates online. Furthermore, you should also confirm if your state or local government requires other licenses or permits.
Set Up A Business Bank Account
Once you have an EIN and a business license, you can open a dedicated business checking account. Using this account for all your side hustle income and expenses makes running your business and doing your taxes a lot easier.
Consider Small Business Insurance
Depending on the nature of your side gig, you might benefit from small business insurance. This type of insurance provides you with liability protection and insures your business equipment against losses.
What Are Some Resources To Get You Started?
Suppose you have the interest but not all the skills for your side-hustle. In that case, some excellent educational resources can help.
Free Learning Centers
Free Online Classes
Paid Online Classes
Resources For Military Veterans
If you are a military veteran, you can access additional veteran-focused education and training resources, including:
A side hustle won’t create financial freedom overnight. But, with a little bit of effort, you’ll quickly see some benefits. And you never know where your side gig might take you.
So, now that we’ve discussed the benefits of side hustles, how to choose one, ways to use technology, and the steps for success, it’s time for you to get started!
Did I miss anything? Feel free to post any thoughts or suggestions in the comments. For more helpful tips, check out some of my other articles in the links below.