Side Hustles are becoming a big trend these days. And for good reason. You can increase your income substantially, with the added flexibility of being your own boss, having choice over your hours, and control over the direction your small business is taking.
It’s the perfect way to exercise your entrepreneurial muscles, all while bringing in a little (sometimes a lot) of extra money.
The stumbling block for most people is where to start. Inspiration can be difficult, and if you don’t have prior business experience, the whole idea of starting your own venture can be daunting. Luckily, with so many people interested in the subject, there’s plenty of starter ideas out there to get you in the right head space and on the path to starting your own Side Hustle.
So if you’re looking to start your own Side Hustle, here’s 5 steps to set you off in the right direction.
STEP 1: IDENTIFY YOUR SKILLS
How many times have you heard people talk about how they want to start a small business because they’ve come up with a product or service idea they think will be huge. Except they have zero background, knowledge or experience in the field.
Ideas are great, but having the ability to execute an idea is the difference between successful business ventures and the massive amount of small businesses that fail each year. It’s no different when we’re talking about a Side Hustle.
So rather than trying to come up with some great new innovative business idea, take a look inward. What are your skill sets? What are you naturally talented at? Do you have a strong ability to teach others? Are you extremely handy? Are you creatively gifted? Are you extremely good at preparing products that others find tedious (IE: work applications, cover letters, tax documents)? Are you a talented artist, seamstress, woodworker? Do you play an instrument or speak another language? Are you extremely talented at certain software programs, or perhaps designing websites?
There’s a market out there for every talent you could possibly have. The key is identifying what talents or strength’s you possess that can build the foundation of your small business, and then making those talents marketable.
STEP 2: USE WHAT YOU HAVE
Once you have identified your skill sets, start to look around at your current environment. What do you already have available to you that can help you launch a side business?
Do you live on a property that has a lot of outdoor space? Could you host weddings or events on your property? Could you rent space for people to store their recreational vehicles, boats, ATV’s or snowmobiles during off season?
Do you have a well equipped tool shop? Could you rent out your tools to people, or rent out your shop to others who want to do some of their own work but don’t have the space or the tools available to them? Do you have an extra space in your home that you could convert to a studio to teach a skill set you possess? Sewing, singing, piano, language, painting, woodworking etc?
Do you live in a desirable area? Could you arrange to spend a weekend or two a month visiting and sleeping over with a friend so that you could Air B&B your home at a premium price? Or combine this with being a house sitter, and every time you have a house sitting job, rent out your own place and make double the income!
D you live in a high density area or large condo building? If you’re a pretty handy person you could advertise in your building or neighbourhood to do small odd jobs for people who aren’t so handy? Or if you like animals, you can stand to make a lot of extra money just by feeding someones cats or walking their dog when they’re out of town.
By taking advantage of what you already have access too, you can reduce or eliminate the need for a capital investment to get your Side Hustle up and running. That means you are minimizing or even removing your financial risk, and if it doesn’t work out the way you hoped, you can walk away without a negative financial set-back, and hopefully just the positive gain of some lessons learned.
STEP 3: REMEMBER THE TAX
Under some tax laws, a small side business may be viewed as a hobby, but make sure you know the rules in your specific area. I would always recommend claiming any income you produce from your small business.
The last thing you want to do in your pursuit of Financial Freedom is evade taxation and open yourself to the risk of future penalties and judgements that could heavily impact your plan. So plan to pay taxes on what you make.
The upside of this approach, is that by claiming your income, you also get to enjoy the benefits of tax write offs for your business. This can result in huge savings over the long term.
If you have an extra room in your house that you aren’t using, you are still paying the mortgage interest for that room, the heating, the electrical, the property taxes, all proportionate to the size of that unused room. Figure out a way to incorporate that space into an income generating Side Hustle and all of those expenses relating to that room, that you would have been paying anyways, become tax write offs for your business. (Caveat: Make sure you understand the tax laws for your specific area, and the eligibility of any write off’s prior to making a tax claim.)
As a general rule any reasonable expense incurred as a result of operating your business is likely to be eligible as a write off. Obvious purchases include supplies and equipment necessary to run your business on a daily basis. Less obvious expenses may include educational courses, conferences, and networking costs that improve your ability to run your business. Training could also include reasonable travel and meal expenses incurred. An example might be if you are operating a Side Hustle as a seamstress, enrolling in a course to enhance your abilities, or attending a large market to network to see what other similar businesses are doing in different locations could all be part of building and improving your business.
STEP 4: CHECK OUT THE COMPETITION
Before investing in a Side Hustle, check out the market space in your area to determine what your competition looks like. Don’t be scared off by competition, just because someone else is doing it doesn’t mean you can’t. There are always ways to provide a better or slightly different service, and if there is sufficient demand, competition isn’t necessarily a bad thing.
It is a bad thing however if the market space is completely saturated, so much so that it’s driving down the cost of the service or product you have to offer. If that’s the case, and your return on time/money invested is low, you will likely be better served to choose a different approach.
It’s also important to know the pricing of your competition, you don’t want to unknowingly overprice yourself and wonder why your business is failing to gain traction. Similarly you don’t want to enter the market underpricing yourself and lose potential income.
By knowing your competition, you can confidently set your price points, and identify areas in service/product quality that are lacking or absent in the current market, so you can fill that void.
STEP 5: JUMP IN
Ideas are great, but in the absence of implementation, they don’t make you any money. Taking action is what’s going to turn your idea into a money making reality.
So don’t get caught in the idea loop. Once you’ve identified what you want to do, take steps to action it. Even if those steps are small.
Don’t be intimidated by the prospect of starting your own Side Hustle. You don’t need to have gone to business school to start generating some extra income.
Focus on the skills and resources you already have available and avoid over investing. The best Side Hustle is one that requires minimal, or better yet, zero initial capital. Remember, the point of the Side Hustle is to generate extra income immediately, not to try to recover a large investment!
Keep it manageable. While there’s lots of us out there that would love to grow our Side Hustle to the point we can leave our jobs, this shouldn’t be your initial goal. If your business gets there, that’s fantastic, but that’s a lot of pressure to put on yourself when you’re just getting your feet wet.
If you do ultimately build a business that affords you the opportunity to transition from your day job, make sure you have a consistent track record of sustained and sufficient income before leaving. Doing so will minimize your financial risk, and ensure you and your family aren’t left without adequate income.
Have fun! While the point of a Side Hustle is to generate extra income, you likely already have a full time job. So pick a Side Hustle that you enjoy and are passionate about. It’ll make the whole experience feel a lot less like work, and you will have a lot more motivation to succeed!