THE Side Hustle Show

I’ve got another 20 Questions episode for you today, diving into the ol’ listener mailbag. As is customary on these episodes, I’ve pulled out questions from the Side Hustle Nation community from over the last few months and will attempt to answer those for your benefit and listening pleasure. This is the 14th installment of this series so feel free to check out the older ones: 498: Profitable Podcasting, Getting Clients, and $50k/mo in Passive Income: 20 Questions with Nick 451: Affiliate Marketing, Early Retirement, and Side Hustle Shifts Over 8 Years of Podcasting: 20 Questions with Nick 431: Fear of Selling, Protecting Ideas, Podcasting and More 412: Side Hustle Ethics, Charging Your Friends, the Side Hustles I’m Most Excited About, and More 365: Market Saturation, Mind Mapping, Miracle Mornings, and More 346: The Con of the Side Hustle, Beanie Babies, Affiliate Marketing, and More 320: Multiplying Money, Morning Routines, and $100k Side Hustles 291: Email, Ebooks, Platforms, and Conferences 271: Brilliant Blogging, Ruthless Productivity, and Guaranteed Success 245: Network Marketing, Imposter Syndrome, My Side Hustle Mistakes, and More 219: Growing Traffic, Monetization, List-Building, a Day in the Life, and More 198: Blogging, Branding, Book Writing, and Finding the Right Side Hustle for You 181: SEO, Affiliate Marketing, Self-Publishing, Udemy, and More A common piece of advice you’ll hear is to take audience questions and turn them into content, so here’s a meta example of that in action. We’re talking pricing, podcasting, pre-aged domains, privacy, personal growth, permission to go full time, and lots more. Enjoy! Full Show Notes: Pricing, Podcasting, Permission to Quit, and More: 20 Questions with Nick

How to Start A Side Hustle

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With inflation on the rise, more people are looking into how to earn some extra money to help soften the blow. A side hustle could be the answer you’re looking for — especially if you have a sought-after skill that you can monetize simply by sacrificing some of your spare time. If you’re wondering how to start a side hustle, the information in this article, including expert tips and recommendations, can help you get going.

5 Tips from the Experts on How to Start a Side Hustle

Starting a side business can be a scary prospect, but luckily many experts have been through this process themselves and can offer advice on how to get started. The following five tips will give you a good idea of how to get started with your new business idea.

1. Choose a side hustle that matches your skills and interests.

Before you begin putting any energy into a side hustle, you need to think carefully about what exactly you’re going to do. If you want to succeed, your side hustle should involve your skills and interests. If you’re good at writing but don’t enjoy it, trying to make money as a freelance writer likely isn’t the right path to take.

Make a list of what you enjoy and are good at. Are there any overlaps between the two? If you’re skilled at using photo editing software and enjoy graphic design, your perfect side hustle might be as a freelance designer. Do you like walking and love dogs? Perhaps you could try being a dog walker. Alternatively, if you enjoy driving, you might look into becoming a rideshare driver for Uber or Lyft or even a DoorDash Driver or Instacart shopper.

Once you have a few ideas for side hustles, it’s time to figure out how to get started.

2. Determine your time commitment.

If you already have a full-time job, you’ll need to consider how much of your free time you’re willing to commit. Committing too much time right off the bat can lead to burnout, which means your side hustle is less likely to succeed. But if you don’t dedicate enough time, you might not make as much money as you would like.

Keep track of your schedule for a few weeks and look for patterns. Do you find yourself scrolling social media in front of the TV for a couple of hours every night? That time could be spent on your side hustle instead.

3. Make a strong business plan.

Once you know how you want to make extra cash, you’ll need to create a business plan. Your business plan should focus on what you will need to make your side hustle successful. This may change over time as you start making extra money, so be flexible with your ideas.

Starting with an executive summary can help you figure out a few crucial items: an outline of what your business will do and what types of problems you’re solving. Do you have a lot of friends who struggle to find pet care when they are out of town? A pet-sitting business could help ease their burden while making you some extra cash.

Next, identify the type of customer you’re targeting and how you will find those customers and build your business. Word of mouth is huge, but you may also need to allocate time and money toward a marketing plan to attract more customers. Social media can be a tremendous asset here: it’s free to make a business page, and you can start inviting your friends to support your business and help you spread the word.

In addition, you’ll want to make sure you’re familiar with your competition. If you’re considering starting an online business doing marketing for small companies, look into similar businesses to see who they target and what they charge. If there’s a need for a specialized marketer for a specific type of business, consider going in that direction to help you stand out from the competition.

atOptions = { 'key' : 'b1b82abcf300361df1f0618e169f5755', 'format' : 'iframe', 'height' : 90, 'width' : 728, 'params' : {} }; document.write(''); ine;">Finally, you will need to determine how much, if any, money you’ll need to set up your business. If you’re planning to freelance as a writer, designer, or marketer, you likely have all the tools you need already at your disposal. But if you’re considering starting a meal prep business, you may need to invest in some professional kitchen equipment first.

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4. Figure out your earning goals.

When you begin your side hustle, you might not have a clear idea of how much money you’d like to make. After all, any extra cash is positive, right? That’s true, but if you’re only making $20 per week, you might think it’s not worth the spare time you’re sacrificing. You also don’t want to begin with unrealistic expectations. If you’re just getting started as a freelance writer or designer, it’s unlikely you’ll make thousands of dollars every month or earn interest on your savings accounts in any notable way.

Determining why you’re starting a side hustle is a good idea. If you want to pay down credit card debt, make a budget and determine how much extra money you need to achieve your goal. If you want to add to your online savings account to help pay for a dream vacation or to save a down payment to buy a house, figure out how much you need to put aside each week or month and go from there.

Next, research the average amount of money you could make from your chosen side hustle — for example, if you want to moonlight as a rideshare driver, look into the average earnings you can expect to make and compare that against the time you’re willing to commit. From there, you can set a realistic earning goal. Don’t worry about potentially undershooting or overshooting the mark. Your earning goal can always be modified at a later date.

5. Familiarize yourself with the law.

If you’re walking a few dogs in your spare time and only making a few hundred dollars a year, you may not need to worry about things like business entities and taxes. But if you expect to make a decent amount of money with your side gig, you may want to consider which of the following options will be best for you.

Sole proprietorship: You are the sole owner and responsible for all liabilities. This will likely be the best choice if you’re starting out and aren’t sure where your side hustle will take you.

Partnership: You share the business and its liabilities with one or more partners. This allows you to go into business with a friend if your side hustle takes off and you need a partner.

Limited Liability Company (LLC): You are not personally responsible for liabilities such as business debts and claims, meaning your personal assets are protected. This may be a good option if your business becomes popular and you’re making a lot of money. You can arm yourself with online legal services providers such as LegalZoom, to assist with the formation and maintenance of your LLC, providing peace of mind and legal protection.

Corporation: The business is solely responsible for all liabilities. Unless your side hustle turns into a full-time, thriving business, you likely won’t want to register it as a corporation.

Consider insurance for added protection: As you familiarize yourself with the legal structure of your side gig, it's also important to think about insurance to protect yourself and your business from potential risks. For example, Next Insurance offers tailored coverage specifically for small businesses, providing an additional layer of security as your side hustle grows. This can help you focus on your work with peace of mind, knowing that you're safeguarded from unexpected liabilities.

Your tax situation will depend on how much you make and which of the above options you choose. It’s wise to consult a financial advisor or be prepared for tax season with a tool like Found that helps freelancers and independent contractors manage their taxes by automatically setting aside a percentage of their income for taxes.

Key considerations for starting a side hustle

Before you get the ball rolling with your side hustle, there are several things you’ll need to consider. Starting with the following can help make your business a success.

Research your competition. If your area is saturated with Uber drivers, you will have difficulty making money and might want to consider a different path forward.

Set your prices. Many people undersell themselves by not asking for what they are worth. Look into what your competitors charge and compare it to your experience level. If you’re just starting out as a freelance social media marketer, you’ll likely charge less than you would if you had a decade of experience.

Rework your schedule. Dedicating 10 hours to your side hustle one week and 30 minutes the next will make it harder to get started. Set aside time each week to work on your business. And be realistic so you can stick to your plan.

Make a goal. What do you want to achieve with your side hustle? This could be an amount of money you want to try and make each month, an amount of time you want to spend on your business each week, or a less tangible goal related to success.

FAQs

Before starting a side hustle, you may have several questions about how to get started and how much you can expect to make. The following are frequently asked questions that can help you determine what’s realistic so you can begin making extra cash.

How do you start a side hustle with no money?

There are several ways. If you want to join the gig economy and drive for Uber, Lyft, or DoorDash, you won’t need to front any money to get started, assuming you already have a car. Similarly, if you want to make money writing articles, you can easily create a blog with Squarespace (use TIME10 promo code and get 10% off) or register with a platform like Medium to build your portfolio and show potential clients what you can do. The best side hustles can help you make money with very little initial investment.

How can I make $1,000 a month from a side hustle?

It’s difficult to gauge the exact amount of money you can make from a side hustle. If you only have an hour a week to commit, you’re unlikely to make $1,000 per month. It also might take some time to get to that earning level since you’ll need to get established. But if you have the time and the drive, you can easily make $1,000 each month from a side hustle.

What is the most profitable side hustle?

There is no one most profitable side hustle. You can earn decent money doing a range of things, including moonlighting as a tutor, an assistant, a rideshare driver, a freelancer, or a photographer.

5 Hidden Costs of Side Hustles

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Side hustles are a great way to make ends meet when your full-time job isn’t cutting it.

Check Out: 7 Ways To Earn Money on Upwork With ChatGPTDiscover: What To Do If You Owe Back Taxes to the IRS

A side hustle can refer to any extra income you make outside of your primary job, whether it be as a driver, freelance writer or selling your own creations. In fact, 39% of Americans have a side hustle.

But not every side hustle is a great success story. It’s important to go into your new venture with eyes wide open. Here are a few hidden costs of side hustles to take into consideration before you embark on your own.

Time

Every business venture takes time. Not only to establish, but also to operate. Make sure before you dip your toe into taking on a side hustle that you have the time you need to dedicate to it. You’ll have to fit your side hustle in between your full-time job and other responsibilities.

A 2022 survey from Zapier revealed that half the people with side hustles spend around 10 hours per week on them. That said, the more time you put into a side hustle the more money you make.

According to Website Builder Experts 2023 statistics on side hustles, dedicating 12 hours a week will net on average $1122 per month.

baseline;">Time Magazine reports that one way to figure out how many hours you have to dedicate to extra employment is to keep track of your schedule for a few weeks to see where you consistently have extra time. The time you spend watching TV or scrolling through social media could become time spent working on your side hustle.

Side Gig: Earn Up To $200/Hour With This Easy-To-Start Job, No College Degree Required

Start-Up Funds

A whopping 55% of people dream of turning their hobby into a side hustle. But turning your favorite pastime into a business takes start-up capital.

On average, you’ll spend $16,000 in the first year to launch your business. That said, most side hustles only bring in around $5700 per year.

So, if you’re starting your own business, you may not see a profit until year two. It’s important to assess your finances and decide whether or not the long game is right for you.

Taxes

The IRS requires you to file taxes if you make $400 or more — even on a side hustle. Know that filing taxes for a self-owned or freelance business is different from filing taxes for a full-time job.

If your side hustle is working freelance for an outside company, you’ll pay a self-employment tax and receive a 1099 form at the end of the year.

This means your employer isn’t responsible for withholding taxes from your paycheck, so you’ll need to pay these taxes quarterly or in one lump sum at the end of the year.

If you’re self-employed, you’re required to do something similar, although there may be different tax documents involved depending on the nature of your business and where you live.

In both cases, you’ll want to keep a good record of income, expenses and deductions so that you’re not scrambling come tax time.

Maintenance Costs

Depending on your side hustle, you may encounter maintenance costs that you’ll need to factor ahead of time, or risk being caught with a bill you can’t pay.

If you’re using your car to drive for an app you’ll have to pay for gas, repairs, inspections and regular cleanings. Plus, depending on where in the country you’re located, you may need to apply for a special license known as a TLC driver’s license, a TLC vehicle renewal and a yearly commercial motor vehicle tax. Altogether these fees can add up to around $1000 per year.

If you’ve decided to invest in a rental property as your side hustle, you’ll need to factor in money for things like repairs, landscaping and taxes. According to Homee.com, rental owners should set aside 50% of the rent each month for repairs, maintenance, taxes and insurance. And if you’re worried about spending this money, place it in a separate account.

Even people who’ve transformed hobbies into side hustles will need to factor in the cost to replace supplies. If you’re selling your wares via an e-commerce platform, you’ll have listing fees, transaction fees and shipping fees.

Burnout

Juggling multiple jobs along with everyday life responsibilities can be a recipe for burnout. If you’re feeling overwhelmed or lackluster about your side gig, it may be time to reassess.

An August 2022 article in Vox by Eliza Brooke, suggested reassessing why you started the business in the first place. If the initial reason still stands, reframe the problem.

If it doesn’t, it may be time to say goodbye your second gig.

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