It’s easier than ever to start a side business. Online shopping platforms such as Etsy and Shopify allow almost anyone to start their own business. And thanks to Instagram and Twitter, advertising your new business doesn’t require a huge marketing budget.
And so, to help you turn your passion into a thriving new business, small business lender OnDeck has created an 11-step guide to becoming a successful hustler.
But before checking that out, let’s look at why so many people start a sideways scramble.
Why do a side hustle?
Most people set up their side business for one simple reason: money! The cost of living is rising, wages are stagnating, and a growing number of workers are struggling to stretch their wages through the end of the month.
For others, secondary hustle is their true passion. This allows them to explore their creative interests while holding a “regular” job. In a sense, this means people can have the best of both worlds: a steady job that pays the bills and a hustle that satisfies their “artistic” or entrepreneurial side.
A side hustle is a great way to test the waters before quitting the day job and starting your own business.
With a side hustle, you can figure out if people like what you sell, where your markets are, and how much you could earn if you turned your side hustle into your main gig. A secondary hustle allows you to take trading risks without taking the real risk of sacrificing a guaranteed paycheck.
Tips for beginners
Every newbie business owner and scammer will make mistakes; it’s inevitable, but mistakes (and failures) aren’t a bad thing. Just think of them as feedback systems, lessons, or information on what to do differently next time.
But some errors are worse than others. And knowing what they are and how to avoid them can save you time, money, and more than a few sleepless nights. And no secondary scammer can afford an all-nighter! After all, they have to get up and go to work in the morning.
11 things NOT to do when setting up your side hustle
Here is an overview of the biggest and most common side hustle mistakes.
Tip 1: Don’t overinvest
Start small and only invest money you don’t need or can’t afford to lose. Don’t borrow or take on big debts to finance your scramble. Build a healthy customer base and a strong brand before investing large sums.
Tip 2: Don’t do your research
Secondary jostling are passions. However, don’t make any decisions based on “feelings” or “instincts.” You’re still trying to run a business. And that means doing all your market research before you try to sell anything. Find out who your customers are, where you can find them, and how much they’re willing to pay.
Tip 3: don’t get fired from your main job
Some employment contracts limit the number of part-time hours you can work. This is especially the case for those who work in the public sector, such as healthcare or the police. Read your employment contract carefully before setting up a secondary activity.
Try not to talk about your new business at work. In fact, keep it low if possible. You don’t want your boss or co-workers to worry that your attention is elsewhere.
Tip 4: Don’t forget your licenses
Even if you run a lemonade stand, make sure you get all the required licenses and permits. You will be closed without them, and there may be other legal consequences that may prevent you from relocating in the future.
Tip 5: Not tracking your income and expenses
The accounting aspect of running a business isn’t the most exciting part of being your own boss. But it is essential that your income exceeds (or at least equals) your expenses. Don’t look to invest in expensive accounting software. A simple Excel spreadsheet for cash inflows and outflows is all you need for the first few days.
Tip 6: Don’t talk about money
You need to be comfortable talking about money and you need to know what your products or services are worth. At a minimum, you should charge enough to cover all of your expenses.
Tip 7: Do not create a professional account
You probably won’t make big profits initially, so it’s tempting to take a detour to your personal bank account. DON’T DO THIS. This will cause serious headaches when calculating your year-end taxes. Instead, create a business account and keep all your personal and business finances separate.
Tip 8: Not having enough to pay taxes
Figure out how much tax you might have to pay, then set aside some of your income each month. Accountants advise saving 25-30% of your net profits for tax.
Tip 9: Do not “extinguish”
Managing a side business and a full-time job is difficult. Add a young family to take care of and you suddenly have a one-way ticket to Stress City. So don’t try to do too much. Know when to disconnect and relax. Tomorrow is always another day. Work is important, but life matters more.
Tip 10: Don’t ask for help
Asking for help is not a sign of weakness. Moreover, not everyone has a head for numbers and complex calculations; that is what accountants and tax specialists are for. Use them.
Tip 11: Don’t burn out
Burnout is real. It is a sign that you are working too much and not taking care of yourself. Build rest, healthy eating, exercise and a good night’s sleep into your routine.
Side hustles can earn money. But they should always be personally rewarding. Otherwise, they will quickly turn into a second job. So don’t forget to have fun. Side hustling is about doing what you’ve always wanted to do.