A common misconception about side hustles is that they need to be a huge business when, in fact, the opposite is true. A side hustle, for example, could be as simple as babysitting neighbours’ kids or walking dogs around your neighbourhood. As long as it brings in an income, it is, of course, a side hustle.
Understanding Side Hustles
Side Hustle Definition
Officially, the definition of a side hustle is money generated outside of your employment or primary source of income. In short, it is a second or third job, but commonly today, a side hustle is used as an interchangeable term for someone’s first steps into self-employment or entrepreneurship.
Is Starting a Side Hustle Really Worth It?
Make no mistake; there will always be challenges when starting to build your own business. However, the upside and opportunities that come with it also make a lot of sense. Below, we’ll look at each of these so that you can make an informed decision on whether or not you want to start your own personal side hustle.
Challenges of Starting a Side Hustle
Anyone who tells you that starting your own business or your own side hustle is easy is a liar. Every business owner or entrepreneur will face challenges in their career. It could be staffing issues, manufacturing issues, or challenges getting paid. Every day you will face new issues in your business that will test your resolve. Many people find this incredibly difficult. There were a handful of times over my career when I wanted to give it all up. Thankfully, I was able to work through these and made it to the other side!
Starting a Side Hustle Isn’t Easy
When you work in a job and are in employment, generally you’re tasked with a certain body of work that relates to specific roles within the business. When you start your own business or your own side hustle, every area of the business is your responsibility. Many of these tasks and business functions will be beyond your current skill set, and you’ll need to learn quickly about many different areas of business: sales, marketing, accounting, production and if your business needs it, the services that you are providing. You need to be adaptable and willing to learn new skills. Some of these you will find that you love, and others you will hate.
Running a Business is Stressful
Some of the most stressful times I have had in my career have been when I was running my own business. As the owner of your own side hustle, the final say or decision-making lies with you. Any complaints from customers or HR issues with your staff generally fall at your feet. I can promise you this: it becomes stressful, and even those who manage stress well may find greater challenges than in their current normal employment.
Dealing with stress and burnout is a huge concern for many entrepreneurs, and knowing this at the start of your entrepreneurial journey is a great way to be able to combat it head-on.
You Might Lose Money
I have been challenged by many people in interviews about business and my views are skewed because of survivor bias. It’s true that I had a successful business and was able to successfully exit, and it’s also true that many businesses do not survive and their owners lose money in their venture. I have worked with thousands of entrepreneurs over the last 20 years, and I can tell you that those who plan for the worst-case outcome, who put the effort in, and who are relentless in their endeavours, are generally the entrepreneurs who succeed.
I will add a caveat: not every business will succeed because there are so many factors outside of your control. It is your job as the entrepreneur and owner of the business to understand as many of these risks to your side hustle as possible. The first step to mitigating these risks is knowing them. The second is planning to avoid them.
Turning Challenges into Opportunities
From every headwind, an opportunity arises, and if you put the effort in to overcome the challenges you face in business, you will grow as an entrepreneur, and your business will grow alongside you. As well as that, there are huge opportunities when you start your own side hustle and begin working for yourself. Below, we’ll document some of the core opportunities. And in case you are wondering, this is a pro-side hustle article.
If you’re looking for a sign to start, this is it!
Increasing Your Income
When was the last time you got a 10% pay rise from your employer? Chances are if you’ve got it once, it was a one-time deal only. However, with a side hustle, you can generate 10%, 20% or more each and every year.
Let’s look at your current salary: if you earn £20,000 per year, to generate a side hustle that increases your income by 10% would mean increasing your income by only £2,000 a year, or just over £38 a week, or around £5.50 per day. With a straight face, tell me that you don’t think you can earn £5.50 a day.
And this is just the beginning also. Much like compound interest working for your finances, when you build a business, every bit of effort and focus supports the business. Every new client can become an ongoing customer. I’m excited for you, just writing this out.
Using Extra Income to Pay Down Debt
As an entrepreneur who has successfully retired early, I genuinely believe that entrepreneurship is the quickest and most secure way to financial independence. The journey towards financial independence starts with financial security. Being able to use your profits from your side hustle to pay down debt and then create an emergency fund is a huge deal. Start with your high-interest loans, pay these down and use any money that you would have paid toward these each month to snowball payments into your other debts.
Supercharging Your Wealth Building
After paying down your debt and achieving some financial security, the next question you might have is whether to pay down your mortgage or invest the money instead. The answer depends on your own personal situation. I have had coaching clients who use the profits from their side hustle to further grow and build their side hustle. I have had other clients who use these profits to pay down their mortgages or pay off their car loans. The correct answer will always be dependent on your personal situation and financial goals.
Personal Financial & Business Coaching
If you want to supercharge your wealth-building efforts, I offer a financial coaching service for entrepreneurs. It gives consideration at all times to your business and your own financial well-being. I offer a small number of personal financial coaching sessions each month, and if you want to discuss this further, you can get in touch with me directly.
Building Multiple Sources of Income
Having many sources of income provides security. In the past, most people considered having a job as the most secure path to their retirement. However, since 2007, we’ve had a huge recession, a global pandemic, the crisis in Ukraine, and a cost of living crisis. With not just one Black Swan event, but many, each of these events has had a huge impact on the world as we know it. As a result, many businesses have changed their work structures, and roles that would have been previously secure have been made redundant.
Building multiple sources of income outside of your normal 9-to-5 is a wise move to protect your financial well-being. In the linked article above, I explore seven independent sources of income that you can use to secure your financial future. Each of these is independent of the others, and if one fails, you can offset this with your other streams of income.
Generally speaking, side hustles are operated and managed during hours outside of your normal working environment. You can work on them in the evenings or over the weekends. The schedule you set for your side hustle is completely flexible, based on your own personal circumstances.
Coast FI: Achieving Financial Independence
Many of those on their path towards financial independence reach a stage where the money they have saved and invested will eventually grow to meet their expenditure if they leave it invested for a significant period of time. At this point, they are able to coast towards their financial independence goal. This is known as Coast FI.
At this point on your financial journey, many people choose to downshift considerably, possibly taking part-time jobs or starting their own side hustle to create an income that will meet only their current expenditure. Any future costs will be met by the savings and investments they have already put away. Starting a side hustle now won’t just let you reach your financial goals earlier, but it could become your Coast FI business that lets you downshift a few years from now. I recently interviewed a doctor who has taken action to start their own private clinic. They are in the process of launching their clinic and will use this as their own catapult into early retirement.
Networking: Building Connections for Business and Personal Growth
There are many benefits to starting your own side hustle, and one of my favourites is the networking opportunities that a side hustle creates. Personally, the network I created over 13 years running my business has helped me in all aspects of my life, both business and personal.
Creating a robust network in your chosen side hustle industry will open up new opportunities yet to be discovered. I have known some people who started their side hustle in a new industry and were quickly snapped up by huge employers, offering them the dream job they never considered themselves to be experienced enough for. Your side hustle today may not be your side hustle forever, but it will be the next step on your journey.
Transitioning to Full-Time: Turning Your Side Hustle into Your Main Job
If you work incredibly hard and are successful with your side hustle, you could increase your income significantly, and at some point in the future, you may begin to question whether or not it is worthwhile to continue with your current nine-to-five employment. This usually happens when your side hustle starts to take off, and you make enough money that you question continuing to work in the evenings and weekends, or you come to the realisation that if you did this full-time, you could significantly increase the earning potential of your side hustle.
4 Steps to Start a Side Hustle Successfully
Make no question about it, starting a side hustle can be a huge challenge, especially if you go into it without careful consideration and planning around all aspects of the business. In the following section, we’re going to look at some of the key things you might want to consider when starting your own side hustle.
1. Understand What Product or Service You Can Sell
When speaking to aspiring entrepreneurs, the largest hurdle they often face is deciding what products or services they can sell as part of their side hustle. Look at your current job and the tasks and services that you provide – are these transferable skills that can be utilised in a side hustle? If not, consider your hobbies and interests. Your side hustle doesn’t have to be a brand-new idea; you can simply look at other businesses serving similar markets poorly and provide a better product or service.
Once you have decided on the product or service, consider its costs and what you might be able to sell it for. Do market research to understand if your pricing is competitive, but don’t fall into the trap of feeling that you need to be cheaper than the competition. Competing on price is a slippery slope.
2. Make Time to Work on Your Side Hustle
If you’ve decided it’s time to start your own side hustle, you’re probably wondering where to find the time. Working on your side hustle in the evenings or weekends requires discipline – discipline to turn off Netflix and work when you’d rather relax, discipline to turn down events or holidays in favour of building your business, and discipline to work on your side hustle when you don’t feel like it.
If you spend an hour or two watching Netflix every night, you have enough time to start a side hustle. Add in a few hours on Saturday and Sunday, and you will be able to set up robust systems to make money in your business.
3. Create a Plan to Make Money with Your Side Hustle
If you’re selling a product, determine where you will source or create the final product you’re going to sell. Understand where you might be able to sell it – online or offline, on your own platform or someone else’s. If it’s offline, do you need to rent or buy a retail space or do you intend to sell your products through other channels?
How will your customers find out about your products? Consider the type of sales and marketing strategies needed to meet your objectives. Remember, a sale isn’t a sale until the money is in the bank. Have a plan for ensuring you get paid for your products or services in a timely manner. Aim for payment upfront, where possible.
4. Follow Your Plan
Creating a plan is one thing, but following it is another entirely. Plans given great consideration at the outset often become the basis for much greater achievements. Be prepared to deviate from your plan if necessary but know that you can always revert back to it. Plans are often written without emotion, detailing what will happen in certain scenarios so that you have a considered process ready to go.
Many entrepreneurs are attracted by the next big thing or the next shiny object. It’s in our nature. So always be mindful to love the business you are creating and stick with it. Many fantastic side hustles or businesses happen because their owners relentlessly follow their plans.
94 Side Hustle Ideas
Recently, Connor and our team of video editors have created a huge series of side hustle ideas, and as it stands right at this second, the total number of them is 94. You can read all about them on our side hustle ideas page or head over to our YouTube channel, where Connor and his team are recording each of these side hustle ideas and adding a little bit of advice on how to get started with each of them.
Frequently Asked Questions
Can I make money with a side hustle?
While business isn’t easy, making money through side hustles can be a very lucrative way to increase your income. Using your current skills and knowledge, you can provide services to businesses who may need your skillset, or you can create a product that can be sold both online and offline. The core benefit of making money with a side hustle is that your earning potential is uncapped.
What is a good side hustle?
The best side hustle is the one that most aligns with your skills and experience. Whether you enjoy the side hustle and does it make you money are other huge factors. Check out our list of good business ideas so that you can start a home with little to no money.
What side hustles can I start with little or no money?
Many service-based side hustles such as freelancing, graphic design or copywriting are great examples of businesses you can start with little money. In addition, using services like Amazon Merch or Amazon KDP (Kindle Desktop Publishing), means that you do not have to buy physical products to sell to prospective clients.