Investing in your career is the smartest financial decision you’ll ever make. Why? Because it affects your earning power long-term. And investing in your career can mean creating an extra, or multiple, streams of income. A side hustle can be the first step toward significantly increasing your net worth: Side hustles give you the opportunity to learn new skills and explore new career paths, all while building an extra income stream.
I talk about starting my business, Clever Girl Finance, in my new book Choosing To Prosper: Triumphing Over Adversity, Breaking Out of Comfort Zones, Achieving Your Life and Money Dreams. The steps I'm sharing with you were critical in the early stages of building my business, which I started in 2015. As you read, you’ll notice that “breaking out of comfort zones” is a central theme to launching a side hustle, because it involves adopting entirely new work habits and mindsets that differ from a traditional full-time gig.
If you want to start a side hustle, it’s entirely possible. But getting your new side hustle off the ground can be a challenge. If you're struggling to get your side hustle moving, follow the steps below. With the right framework in place, your new venture could boom faster than you think.
Step 1: Evaluate Your Options
When starting a side hustle, it’s important to find one that suits your interests and your availability. Otherwise, you could face serious hurdles as you attempt to get the business off the ground.
Take a realistic look at the time you have available for a side hustle. Look for gaps in your schedule and ask yourself when you’ll have the time to build out this dream. Some jobs are more flexible than others. For example, graphic design can be done remotely and at any time, with respect to deadlines. But a marketing consulting job might require some face time and phone meetings during the traditional 9-to-5 work cycle.
Beyond your time constraints, find a side hustle that excites you. If you aren’t interested in any aspect of the business, you are less likely to commit time. For example, if you don’t enjoy the inner workings of the human body, then building out a medical writing business is probably not a good fit, no matter how lucrative.
Step 2: Create A Business Plan
Once you have an idea for your side hustle, it’s time to create a business plan. A business plan will serve as the road map to your goals. Before you shy away from drafting this document, keep in mind that it doesn’t need to be super long. Even if you just write down realistic goals for your business, that’s a good place to start. If you want to really get your feet wet, research your competition, visualize potential customers, and choose an operating model that works for your goals. Additionally, make sure to nail down your initial products or services.
Step 3: Explore Business Entity Options
Before you jump into selling your product or service, pause to determine the right business entity structure. Without the proper legal structure, you’ll miss out on legal protections and tax benefits.
The main options include: a sole proprietorship; partnership; limited liability company (LLC); or corporation. Each offers different levels of legal protection and comes with various tax implications. A sole proprietorship offers the least amount of personal liability protection but is inexpensive to start. Corporations offer their owners the most legal protections. But the setup costs and ongoing legal maintenance expenses are higher for corporations. As a business owner, you’ll need to decide which balance of legal protection and cost is right for you.
Step 4: Take Advantage of Free Resources
When starting your side hustle, learning is the name of the game. Knowledge is truly power as you embark on this journey. The good news is that there are countless free resources available to side hustlers. With the help of the Internet, you can learn about almost any topic under the sun, like how to start a fashion line, podcast, or food business. Take advantage of that opportunity! Whether you need to learn new skills or understand the basics of business structures, look for free resources right at your fingertips, including blogs, podcasts and YouTube channels. There are also free online classes, webinars and day-long summits for specific topics. Check out learning-oriented platforms like General Assembly, the SBA (Small Business Administration) Learning Center, and Fiverr Blog.
Step 5: Find Funding
Regardless of the side hustle you create, you’ll likely need some funding to get off the ground. In some cases, you’ll just need a few hundred dollars to get the ball rolling for some fundamentals, like a website. But other side hustles, especially those that involve physical property, materials, and equipment, can be more cash intensive.
Self-funding is the first option to consider. If you can avoid taking on debt, your business will benefit. Consider setting aside a portion of your regular income to devote to building your side hustle.
But self-funding isn’t the only option. Crowdfunding is a useful way to get the funds you need while testing out a product idea. You can also raise money from family, friends, and angel investors. Or you can choose to take out a bank loan. But this, too, comes with risk. Risks to keep in mind when taking on friends and family and/or angel investors include:
- Depending on how much money you raise, you might have to give up a significant amount of ownership and even controlling interest in the business.
- If things don't work out, you risk strained relationships with your friends and family, and/or investors.
The right funding option will vary based on the side hustle you choose.
Step 6: Set a Schedule
A realistic schedule is key when building a side hustle. Without a set schedule, it will be difficult to make time for your new venture.
Start by determining how much time you can realistically devote to your side hustle. In addition to considering your day job, you’ll need to think about your other responsibilities like caring for a family, pet, household, and, most importantly, your own wellness and health regimens, be it cooking for yourself or exercising. Figure out what will work for you. For example, you might realize that you can only commit time to your side hustle in the evenings or weekends. Or, you might decide to carve out newfound time by getting up earlier every day.
Try to be realistic about the amount of time you have available in your week. If there isn’t room for your side hustle right now, consider what you could cut out of your existing obligations to make space. But don’t forget the nourishing importance of having a personal life and hobbies. Once you have an idea of the number of hours you can work, use a calendar to map out your days. When you have an appointment for working on your side hustle marked on your calendar, it’s easier to stick with the plan.
Step 7: Stick With the Side Hustle
When starting a business, it can take some time to gain traction. Although everyone wants to be an overnight success, that’s not always feasible. Don’t give up on your side hustle too easily! Set realistic expectations for benchmarks to hit on your way to big dreams.
For example, let’s say you are starting a service-based business. You could set the goal of landing one client in your first month. Of course, you have plans to keep growing. But checking off smaller goals along the way can help you stay motivated.
Side Hustle Ideas to Get You Started
The amazing thing about side hustles is the sheer number of options. You can turn almost any interest under the sun into your side hustle.
It's best to combine a personal passion with your best and current skillsets. A few popular side hustles include:
- Dog walking
- Freelance writing
- Web designing
- Hosting on Airbnb
- Delivering groceries with Instacart
- Cleaning homes
But less common side hustles can still be lucrative. For example, you could sell jewelry on Etsy, teach English, or give music lessons as your side hustle. Take some time to brainstorm and pick one that will hold your interest as you work to get it off the ground.
The Bottom Line
The steps above serve as a great framework to build your side hustle. But you’ll also need the right mindset to help you stick with your plan. If you need some inspiration on how to chart a new course and start your own business, be sure to leverage these key tips.
I am a Certified Financial Education Instructor (CFEI), money expert, and 4x best-selling author of the Clever Finance Book Series and Choosing To Prosper!
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