You’ve been thinking about this side hustle idea for some time now, wondering if this is it. You don’t want it to take too much of your day (or your wallet) to implement it, but you do want it to be successful.
Of course, there is a much more important matter on your mind. It is more fundamental than your specific idea.
Perhaps the first question you need to answer is, “Do I have what it takes to be an entrepreneur?” Whether you know it or not, starting a side hustle is no different than starting a business. Sure, there are differences in the size of things, but the focus areas are pretty similar.
Once you get past that hurdle, you can focus on the specific side hustle idea. This starts with a series of questions.
Is it a good idea to have a company?
Why are you even thinking about starting a side hustle? What do you want from it?
These are critical questions that you will need to answer. Do not worry. Everyone has a different answer. It all depends on where you are in life. You may need additional income. You might be bored. You might want a challenge. Your age doesn’t matter. You may be a twenty-something just starting out in your career or retired.
“Most people take jobs with pay and benefits and do something they don’t really like,” says Stephen Davis, CEO and founder of Total Wealth Academy in Houston. “Your sides should be something you like and enjoy doing. Success would be when the income from your hustle exceeds your wants and needs and you enjoy the process.”
How should you rate the side hustle idea?
If you look at the two constraints placed on the venture in the first paragraph above, you’ve already begun to answer the question.
“A side hustle should require low capital to start,” says James Bowersox, founder of Maui, Hawaii-based Pindrop. “The operation of the business should not require more than two hours a day. The business operation should have no other employees at the beginning and the ability to easily outsource any help needed. It’s best if the hours required to run it are fluid, meaning that work doesn’t have to be done at precise times to achieve goals.”
Time and money determine the initial assessment. You don’t want to spend too much on either. Once you’ve considered these ‘outflows’, the next thing to consider is the potential ‘inflows’. This would be the prospect of making significant income from your hustle.
“I always tell my students to start by picking low-hanging fruit: niche services in low-competition areas,” says Nick Wood, founder and CEO of Digital Landlords in St. George, Utah. “The whole nature of side hustles is to hack the game a little bit. Make quick and easy money in a smart and efficient way. Side hustles can be glamorous in nature, but in my experience, it’s the ‘dirty work’ side hustles that can really make money fast.”
Of course, if you care to dive deep down this rabbit hole, there’s no reason you can’t give your side a full audit with thorough tactical business analysis.
“Evaluating a side hustle with time analysis is a great way to evaluate a side hustle,” says Sacha Walton, business strategist and managing director of SWI Management in Hampton, Virginia. “Determining the time needed to perform a service or create a product is essential to balancing a full-time job and family. We need to ensure that the time available allows us to be productive while valuing self-care. Another assessment is to review your income-to-debt ratio. We need to measure the cost involved in producing a product against the set selling price. In many cases, people who have side hustles are busy executing and don’t accurately set a price that ensures a positive profit margin. Quarterly reviews are essential to determine if we are on track for positive revenue growth.”
More broadly, you can assess whether your side hustle has what it takes to meet your expectations by looking at it from a strategic level.
“Evaluating a side hustle involves looking at both the financial and non-financial aspects of the business,” says Pini Shemesh, co-founder and CEO of MyTower in Tel-Aviv, Israel. “Factors to consider when evaluating a side hustle include:
- Financials: Review revenue, profits and other financial metrics to assess business performance.
- Market potential: Consider the size of the target market and potential for future growth.
- Competitors: Assess the competition and how the side hustle stacks up in terms of products, services and branding.
- Personal satisfaction: Consider how much enjoyment and satisfaction the side hustle brings and whether it aligns with personal goals and values.
- Scalability: Consider whether the side hustle can scale and whether there is potential for future growth.”
How do you create a successful side hustle?
It’s natural to then ask, “How can I make my company successful?”
You measure the success of a side hustle just like any other business, only different.
“A side hustle should be treated as a business,” says Frenchie Ferenczi, founder and managing director of Frenchie Ferenczi Strategies in New York. “The scale and scope is different. In general, though, if your sideline goal is to transition into a viable full-time business, then focus on developing the top metrics you need to set to achieve the results you want when you make the transition.”
Remember, though, that this is a side hustle, not a full-time business. This means that the “time and money” ruler will limit how much of each you invest in the business. You will need to use your talents to get things done without spending a lot of time and money.
“The key to growing a successful company is to start by growing an audience while minimizing your budget and onboarding time,” says Ali Smith, founder and award-winning dog trainer at Rebarkable.com in Westminster, Maryland. “Use your strengths as an entrepreneur and leverage your network as much as possible to get you started.”
How do you track your side hustle income?
To get a good idea of whether your side hustle is on track for success, you need to keep your accounting books up to date. If you can’t answer how much you made in sales, you have a problem. If you don’t know what your costs are, you’re in trouble. And if your sales don’t cover your costs, you’re in trouble.
The first thing you need to do is separate your finances from your personal finances. From there, the sky is the limit.
“Deposit your hustle profits into your bank account,” says Wood. “Does he pay your rent? Does he buy you food? Does it give you the freedom to travel or shop? If not, keep going until you start making more money. If so… keep going until you earn even more money. Side hustle is a way of life. If you put in the work, you’ll measure those gains and know if it’s working.”
Who is the best company?
If you are like other people, your idea of your side may be good, but you have this feeling gnawing at you. Is it good enough? Is it the best company for you?
Ah, “for you.” This is the crucial qualification. You don’t need the “best” side hustle. You need the best for you.
“What’s the best company?” The one you are taking action on!”. says Nick Loper, founder of Side Hustle Nation in Sammamish, Washington. “While most visitors to the Side Hustle Show started with a service-based business, those with the largest scale are often content-based businesses – websites, podcasts, YouTube channels, Instagram accounts, etc. These are usually slower to to see results with can become truly profitable assets over time. The reason is that it takes the same effort to create a post that gets 100 people as it does to get 100,000. And once you let that audience give you attention, you can monetize with ads, affiliate partnerships, or your own products and services.”
So take your idea and run with it. You may find that it is the most rewarding way to achieve your dream.
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