Whether you want to make extra cash, grow your business idea into a full-time venture, or have more freedom to live the life you want, starting a side hustle can help.
Once you’ve decided to take action on your business idea, it’s time to turn that inspiration into reality by following this 5-step roadmap.
Why start a side hustle?
I’m going to give it to you straight: There are plenty of people making six figures in their twenties, getting ahead financially, and developing their skills for the future.
And they aren’t doing it at their day job.
A side hustle is any business you can do in addition to your regular job. And it’s the perfect way to make extra income, gain experience, and test out an entrepreneurial idea without taking a big financial risk.
Plus, it’s a great way to stay motivated and challenge yourself to learn new skills while staying employed at your full-time job.
Side hustles generally require a few hours of your time per week and can significantly pay off in the long run.
Whether you want to pay off your student loan debt, get ahead financially, or try to generate passive income, there are plenty of side hustles that can help you reach your goals.
Step 1: Consider these side hustle ideas
The first step in starting a side hustle is understanding what works and what doesn’t.
I’ve seen a lot of ads and articles mention online surveys as a great way to earn extra money. Don’t listen to them.
Here are a few tried and true side hustle ideas to guide you in the right direction:
- Freelancing — Freelance writing, SEO, web/graphic design, development, photography, video, or ad campaign management are excellent options, especially if you already do the same type of work in your full-time gig.
- Online Business — Affiliate marketing, a dropshipping business, or digital products (e.g., an online course) are more difficult to set up, but can work perfectly if you have the skills, experience, and time to make it happen.
- Consulting — If you have expertise in a certain industry, offering consulting services is an ideal way to share your knowledge and make extra income without dedicating more than a few hours per week.
- In-Demand Services — Services like rideshare driving, food delivery, dog walking, pet sitting, virtual assistant services, and childcare are constantly in-demand. Apps like Uber, DoorDash, Wag!, Rover, and TaskRabbit are all apps you can make good money with.
- Product Selling — Design and sell your own products, flip wholesale products, or upcycle old products in your spare time. You can sell them in-person, through your online store, on social media, or even through third-party platforms like Etsy and Facebook Marketplace.
- Sharing Economy — If you own assets, such as property, equipment, and land, you can rent them out to others for passive income.
A general rule of thumb: Start-up costs for your side hustle business should be minimal or nonexistent. The best side hustle jobs usually involve making money online.
You should also choose a side hustle that matches your skill set. You’re unlikely to stick with a side hustle if it doesn’t use your existing skills and interests.
Step 2: Create a plan for your business idea
Without a plan, your side hustle idea is just that: an idea.
Creating a business plan is a lot easier than you think. Since you aren’t planning to make a full-time income with this idea, it can be a lot less formal than a traditional business plan.
Depending on the type of business you want to start, your plan will vary.
For example:
- To sell services online, you will have to figure out how to find clients, set the right rates, and what you need in place to make sure everything runs smoothly.
- To sell physical products, you will need to figure out the best way to find suppliers, keep track of physical inventory, and price your product correctly.
- To pet sit or deliver food, you must ensure you have reliable transportation that won’t cost more than your side hustle earns you.
- To invest money in rental properties, you need to consider your down payment, property management, and how you can generate a net positive cash flow after your monthly payment.
Every business plan will also include information about your target customer, their problem, and your solution to their problem.
Step 3: Set up your business
When you start a revenue-generating side gig, you’ll have to pay taxes and file a Schedule C with the IRS.
This means that you need to register your own business, set up a bank account, and set up your business processes.
Registering Your Business
You can make money from your side hustle idea without registering it as a business, but you shouldn’t.
I promise you, it’ll be a major headache come time to pay taxes if you don’t.
For most small business ideas, a Limited Liability Company (LLC) makes the most sense.
Benefits include:
- Protection for your personal assets, in case something goes wrong with the business
- Favorable taxes compared to sole proprietorships
- The ability to separate your business and personal finances
Depending on where you live and they type of side hustle you start, the laws and processes for setting up your LLC and paying taxes will vary.
In any case, you can set up your LLC in minutes using an online service like ZenBusiness or LegalZoom.
Setting Up a Bank Account
Business banking keeps your personal finances separate from those of your business.
It’s also important for tracking your revenues, expenses, and profits.
You can open a business bank account with any major bank or credit union as long as you have your LLC paperwork, but an online platform like Mercury is a better choice.
Online banking platforms integrate with your other software, making bookkeeping, invoicing, project management, and other business processes easier.
Plus, most of them don’t come with monthly fees like traditional banks do.
Setting Up Business Processes
You won’t need much when you’re just starting out, but you will need the right tools to do your side hustle job.
This might include:
- Bookkeeping software
- An invoicing app or payment processor
- A website, domain, and hosting
- Project management software
- Communication software for team collaboration
- A third-party side gig platform like Upwork, Fiverr, Uber, or Airbnb
Most of these tools are free. And the ones that aren’t are certainly affordable.
Step 4: Start small
Many people think it takes a ton of money, time, and resources to get a side hustle off the ground.
In truth, you can start a side hustle by investing only your own energy and time. From there, you can grow your business and make more money over time.
During this phase, there will be lots of guesswork, and you probably won’t make much extra income right away.
Remember, the primary goal for your new side hustle is to make money.
You don’t need:
- A fancy website
- A perfect product or service
- A marketing budget
All you need is:
- Knowledge of a particular subject (or a willingness to learn)
- Free time to do manual tasks like finding new clients or side gigs
- The ability to connect with people online and offline
For side hustles that involve service offerings, such as freelance writing gigs and SEO services, simple cold outreach through LinkedIn and email can help you land your first clients. Upwork is also an invaluable tool for connecting with prospects.
For product-based gigs, like selling handmade crafts or software products, setting up a Shopify store is the easiest way to get started.
For other kinds of online stores, Amazon, Etsy, and eBay are great options too.
You’ll have to do some research on your own to find the best platforms to monetize on, but the important thing is that you start first and learn as you go.
Step 5: Market your side hustle
Once everything is up and running and you have a bit of side hustle income, you can start to think about marketing your side hustle.
Marketing can be done in a number of ways:
- Creating content, such as blog posts and videos
- Social media campaigns on Facebook, Instagram, Twitter, YouTube, etc.
- Networking and cold outreach to influencers and potential clients
- Paid advertising through search engines like Google or social media platforms like Facebook
- Developing an email list for your customers and subscribers
- Creating a referral program
Personally, social media has given me some tremendous wins over the last few years. But the key to successful marketing is focusing on the channels that are most likely to get you in front of your target audience.
What’s next?
The beauty of side hustles is the freedom that comes with them.
Whether you just want to work on your own schedule and keep your business where it is or scale it until you can leave the corporate world, the choice is yours.
You can take your business wherever you want.
And that’s what makes it so rewarding.
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