Whether you’re looking for ways to make extra money to supplement your current income or monetize something you’re passionate about, consider taking a detour.
Secondary jostling comes in many forms, from part-time work to running an online store to hosting a podcast. This type of work has become increasingly accessible and widespread largely due to technological innovation. Nearly half of workers in the United States earn extra income alongside their part-time or full-time jobs, according to a 2019 Bankrate survey of 2,550 adults. Millennials were among the most likely to benefit from the gig economy, according to the survey. “Tech-enabled skills have opened the most doors in terms of secondary hustle,” says Greg McBride, chief financial analyst at Bankrate.
It’s also more important than ever to diversify your income, according to social media consultant and YouTuber Roberto Blake, who says he has four to six sources of income at any given time. “If you can create multiple revenue streams, you have a lot more stability and a lot more security,” says Blake, who receives advertising revenue from his YouTube content, coaches clients on social media strategy and takes on supports brand sponsorships.
1. What motivates you to start a side business? Determine what matters most to you.
Before you do anything else, figure out exactly what you want to get out of your stampede. Schedule time to sit down and think about it. This first step will likely be a process of self-discovery and you need to be honest with yourself.
You may be looking for:
- Extra money.
- The fulfillment you don’t get from your regular job.
- A fun way to spend your free time.
- Exploration of professional retraining.
- A way to gradually come out of retirement.
- A combination of some or all of the above.
If you have a high-paying day job that you’re not passionate about, you may be looking to take on a new project that will keep you energized, inspired, and motivated.
If you’re just looking for a quick way to make some extra money, you might not want to spend a lot of time planning or investing in an original idea, and you might be better suited to working rigs existing independent or work on demand. Even if this is the case, you should still choose a job that you like and that matches your skills.
Mr Blake, who consults with businesses, creators and entrepreneurs on developing successful side businesses, says the ideal pursuit will fall into three categories: it must be fulfilling, lucrative and add value to the world.
Remember, you don’t need to overlook potential side scams that require skills you don’t already have.
Mr Blake says that you “need to know realistically where your skills and potential lie, but also how are you learning and what you have the capacity to learn and improve… You are not born knowing how to tie your shoes or drive a car either.
Just like you do with your day job, you need to be prepared to put in the time and effort into developing your skills, researching the market, and planning a course. It is, after all, a stampede.
2. Do your research and figure out what you can monetize.
You’ve figured out what you want out of your hustle and identified the skills you have or think you can learn. Now comes the practical part of the process: determining if you can actually get paid for what you want to do. Start by looking online to see if anyone has done it before you – chances are they have.
If you hope to create content on social networks, for example, search platforms like YouTube, Instagram, Snapchat and Facebook.
If you want to sell something, browse online marketplaces like Etsy,
Poshmark and Craigslist. Offer a service? Check out sites like TaskRabbit. Transforming your guest room? Try Airbnb.
Compare prices, read reviews. Look at the most and the least that other people have ever earned from the job you are considering.
Questions to ask and answer during your research:
- Has anyone ever received money for this item or service?
- What is the average income for this type of work?
- What is the most anyone has ever earned from this pursuit and what skill level did this person have?
- Is the market saturated with this type of work or is it rare?
- Is this type of work becoming more or less valuable?
If you have a vague idea of what you want to do, but aren’t sure what to look for, “think of a problem you’ve solved yourself,” advises Blake. “And then consider the possibility that other people like you exist.”
If you do your market research, you will find that there is very little that cannot be monetized. “I’ve seen people literally make money by sleeping for a while. [live stream]says Mr. Blake.
3. Do the math and invest in your hustle accordingly.
The key to having a successful and lucrative side business? Master your financial planning well in advance. Failure to do so could cost you potential profits, savings opportunities and tax benefits.
Some secondary activities require you to invest in equipment, services, offices or even employee payroll. Compare the cost of investing in the program with your earning potential by determining how much money you can realistically afford up front and the estimated time frame to make a profit.
Mr Blake, who has nearly half a million YouTube subscribers, realized early on that high-quality camera equipment would be a big investment for his business. “A lot of people would have taken the kind of money I took to buy camera gear and they would have paid a deposit on a car,” he says. “I invested in my job.”
Bankrate’s McBride recommends exploring several options before investing. Consider leasing equipment or outsourcing services until your business is up and running “to the point where you can justify a larger investment and own the equipment needed to produce at a higher volume,” says- he.
Think about the impact moonlighting will have on your income and your tax bill. The more work you plan to undertake, the more important it will be to meet with an accountant or financial advisor, says McBride.
Here are some questions you might ask your financial planner about:
- Credit cards and/or bank accounts dedicated to business expenses.
- Budget money for self-employment taxes.
- Registration or incorporation of your business.
- If, when and how to invest money in equipment or services.
- Retirement savings options for the self-employed.
- TED talks: Looking for inspiration? Watch the world’s most creative, successful, and innovative minds talk about their journeys, lessons learned, tips, and struggles for free. There are several conferences dedicated specifically to the topic of starting a scam.
- Local business groups: Exchange ideas and struggles with real people in your neighborhood. Search topics like entrepreneurship and small business on Meetup or social networks like Facebook or Reddit to find local groups near you. Be sure to take safety precautions if meeting people face to face.
- Existing freelance platforms: If you’d rather rely on existing platforms for quick and easy jobs, freelance job boards like Fiverr and Upwork can connect you to jobs that match your skills and interests. Labor platforms linked to specific jobs like Uber, Lyft, TaskRabbit, Instacart offer longer term employment contracts.
What to read next
What to do next
- Reduce your tax bill by anticipating the tax risks you will face by adding self-employment income to your annual income.
- Listen to this episode of the WSJ podcast “Your Money Briefing” to learn more about the tax benefits that come with having a side hustle.
- Need inspiration? Listen to The Breakfast Club co-host Angela Yee’s interview with WSJ’s Veronica Dagher about how she handles her side business.
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