Jump to:
- Pros and cons of starting a side hustle
- Taking inventory before getting started
- Five things to know when starting a side hustle business
- Finding the right bank for your side hustle
We could all use a little extra cash. From making a big-ticket purchase to taking care of regular expenses, having more money can help you reach your goals and provide much-needed breathing room in your budget.
If you’ve been exploring ways to build up your monthly income, you’ve probably heard how people use “side hustles” to earn cash. Recent reports have shown significant growth in the number of Americans with side hustles, stating that 40% of employees with full-time jobs have another source of income.
While this term has recently grown in popularity, having a secondary job outside of your primary employment or commitment (school, parenting, etc.) is nothing new. Part-time employment or business ownership, also known as “moonlighting,” has always been a way for fiscally focused individuals to pay bills, build up their savings and gain financial independence.
However, the integration of technology and instant communication into our lives has made it easier than ever to discover new opportunities and monetize skills. If you’re considering jumping to a side hustle but are wondering if it’s right for you and how to get started, keep reading to learn more.
Pros and Cons of a Part-time Job or Side Hustle
Side hustles can come in all shapes and sizes. However, these extracurricular forms of employment are not for everyone. You may not have time to tackle another job, or your employer may bar you from participating in such work.
Let’s review some of the biggest pros and cons of a part-time job before jumping into how to get started.
Pros of a Side Hustle
- Extra income: The biggest benefit of a side hustle is the additional income you can make from it. This secondary cash flow can help you recover from setbacks and accomplish your financial goals faster.
- Flexibility: When performing work outside your normal 9-5 obligations, you can work at your own pace on your schedule. The flexibility of a side hustle makes it an intriguing way to earn income. One survey found that more than half of respondents spent five hours or less on their side hustle each week.
- Skill development: Whether you have a skill you don’t use at work or want to learn a new skill, side hustles can help you hone your craft as you serve customers.
Cons of a Side Hustle
- Time commitment: While you can set your own hours with a side hustle, you may find that the time commitment is more significant than you first realized. A number of responsibilities come with running your own business or part-time employment outside of the task at hand, including marketing, paperwork, commuting and bookkeeping.
- Potential legal requirements: Speaking of extra time commitments, if you plan to scale up your business at any point, you may need to consult with a lawyer or accountant to make sure that your liability and tax burdens are accounted for. The last thing you want to do is lose the money you earned due to an unknown or unexplored protocol.
- Startup costs: Finally, if you plan to start a side hustle that requires equipment, training, legal fees or rented space, these costs can eat away at the earnings you want to preserve for your financial freedom. Make sure you are prepared for costs that may come your way.
Now that we’ve reviewed some potential positives and negatives of the side-hustling lifestyle, let’s discuss the items you need to review before getting started.
Taking Inventory
Before deciding on your side hustle, you need to review why you want to start your new gig, what skills you can offer and how much time you can realistically dedicate to making secondary income.
The Goal of Your Side Hustle
While making extra money seems like a straightforward goal, establishing a set, measurable earning target can make it easier to accomplish. We suggest taking an hour or two to sit down and really dig into your financial situation to set these goals. You may find that setting and sticking to a budget can help you reduce the time you need to dedicate to your side hustle.
What Skills Can You Offer?
When you start looking for your side hustle, it’s a great idea to evaluate what skills you already have that can be useful to others. Did you learn how to edit photos in college? Are you a talented musician who works a 9-5 office job? Perhaps friends and family members always say you should sell your famous baked desserts.
If you don’t have a specific skill you can offer in a part-time capacity, that’s okay! Many side hustles, like food delivery, ride-sharing and pet sitting, are entry-level with established marketplaces, making it easier to start with little or no experience.
Are There Any Upfront Costs to Getting Started?
As you narrow down your options for your side hustle, you want to make sure you either have the proper equipment to get started or determine how much the necessary supplies will cost.
Some side hustles, like ridesharing or freelance writing, may only require tools you already have. Others, like food or merchandise production, may require a more extensive equipment investment. Recurring costs for software or materials may be an ongoing expense you will need to account for as well.
Having a realistic understanding of these upfront and ongoing costs can help you decide whether or not you can pursue a side hustle.
What Does the Market Look Like?
What needs do people in your area have? You want to make sure that your side hustle aligns with the needs of your community. If not, can it be translated into the internet? The web offers opportunities to discover a niche market for your service or product. Some side hustles, like ride-sharing, house rental and pet-sitting services, have apps that can connect you directly to consumers, making it easier to find interested customers.
How Much Time Can You Dedicate?
Finally, you need to know how much time you can truly commit to your side hustle. One survey on side hustles found that 30% of respondents had difficulty finding enough time to start their part-time gig.
If you want to run a business, you need to be reasonably available to your customers, as they may be frustrated if they can’t contact you for long periods. Some jobs may require more time than you have. Spend the week or even month examining how you use your time to see if a side hustle is feasible.
Five Things to Do Before Starting a Side Hustle Business
If you decide that you want to start your own side hustle business rather than find a part-time role with an established company, here are a few steps you can follow to get started:
- Create a business plan: Your business plan doesn’t need to be overly in-depth, but it should state what your business does and what problems you are solving. Documenting what you offer and your goals as a business can help you when you begin marketing to potential customers or clients.
- Start small: Trying to hit your earnings goal in a short period can quickly lead to burnout. Slowly work your side hustle into your routine. As you become more accustomed to the demands of a side business, you can ramp up your operation to earn more.
- Make sure you are staying legal: The last thing you want to do is lose your hard-earned money in penalty fines or legal fees. Consulting with a lawyer can help you make sure you can legally operate your business, and an accountant can help you determine how much you will owe in taxes.
- Market yourself: Again, starting small is a good idea. Start with your network. Do you have friends, family members or neighbors who need your help? Word-of-mouth marketing is a powerful way to find more business. Once you’ve established yourself, you may want to begin branching out to find new customers through traditional or digital marketing.
- Measure your earnings: Finally, you want to make sure you are measuring how much cash you are retaining after your expenses. If you put a lot of time into your side hustle but don’t see returns that meet your goals, you may need to reassess your business or look for a new opportunity.
Find a Bank That Can Keep Up With Your Side Hustle
Having an established bank with a wide range of offerings and excellent customer service can help make managing money from your side hustle a breeze. The team at Community Point Bank has helped countless businesses in the mid-Missouri area get started on the right foot. Go to our contact page to find a location or send us a message to learn more.
