This is the era of the “side hustle,” a time when many people are turning their ideas, interests and skills into cash. For those who have full-time jobs or are busy otherwise, these mini-jobs help them put gas in the car, pay for groceries and in some cases, even cover monthly mortgage payments. You probably know people who are doing this right now.
But it doesn’t have to be a side job. Many people who lose their jobs or decide to quit or retire from their full-time employment start small businesses of all kinds. Some scour estate sales and sell found items on eBay at a profit. Others make money in the collectors’ market, acting as dealers for everything from old records and vintage magazines to comic books and movie posters. It’s all about what interests you.
The good thing about a small business is that pretty much anyone can start one. All it takes is a good idea, a little time to set up shop, a system for doing business, and a few extra hours a week. Ready to get started?
Here are a few things to keep in mind.
Especially if you’re planning to start a new venture while continuing to work at your day you, it’s wise to build your business customer-by-customer from the ground up. Let’s face it: we’re in a very unpredictable economy, and extra income is always a great incentive, but you need to balance your time. Maybe you have a hobby that you can parlay into a small business, like making arts and crafts or restoring furniture. Start small, then grow as demand allows.
“Aspiring entrepreneurs with a strong drive can look to a side hustle as a stepping stone toward financial freedom,” says Ryan Robinson, host of The Side Hustle Project podcast. “Your side hustle can also allow you to focus on what you’re most passionate about if you don’t get that satisfaction from your full-time work. It can give you the flexibility (and extra savings) to travel the world, care for the environment, or pursue causes in a more meaningful way.”
Use your skills.
After John Fielding retired at a young age from playing professional hockey in Europe, he and his brother started a small marketing business in Canada. Although launched as a full-time business rather than a side hustle, their venture started very humbly. But because they had excellent skills and were very marketing-savvy they were able to grow their business into a large company, Array Marketing, an innovative, global retail merchandising company that today counts Estee Lauder, Chanel, Sephora, and many other prominent brands among its clients. Since then, John Fielding has gotten involved in a number of other ventures as well. He says he loves what he does, but it’s not easy.
“There’s no nine-to-five in the entrepreneurial life, especially in the beginning,” he says. “There’s a good bit of creativity out there and many good ideas that are being brought to fruition. I also think technology – and the speed with which it’s being developed and how it’s changing our lives – will continue to be a major factor. Today’s young entrepreneurs realize just how impactful technology has become and they are using that to build new businesses, which I think is tremendously exciting.”
Do what you know.
If you were a doctor working 60 to 70 hours a week, would you even want to start a side hustle? Shaan Patel did. As a resident physician in a hospital, he was earning about $15 an hour. But he also had good ideas that he wanted to take to market, so he did, launching not one but two startups. Today, he continues to work at the hospital but his side businesses are earning a combined $10 million a year.
He believes his success is due in large part to doing what he knows. “One of the biggest mistakes I see entrepreneurs make is attempting to enter an industry that they are not familiar with,” he writes. “If you have no knowledge of an industry, you are shooting yourself in the foot before you even start the race. But if you have deep knowledge of a particular topic, you immediately have a competitive advantage. This is why I keep my day job as a physician. I want to gain specialized medical knowledge in dermatology so that I can start a skincare company that makes use of the thousands of hours I spent becoming an expert on the subject.”
Watch your money.
As in all things it’s important to keep an accurate accounting of the money that goes in and out of your small business. If you have a personal accountant who handles your taxes, ask him or her to help you understand what you should be tracking as well as what business expenses you can use against your taxes. Also, don’t spend money until you need to. “It’s tempting to think ahead, to forecast need, then spend money based on those forecasts,” writes Inc. contributing editor Jeff Haden. “Like needing more supplies before you actually have demand. Or needing more equipment before you actually have demand.”
Haden writes that before you spend money, always ask yourself if it touches the customer. He advises spending what money you have where it makes a real difference to your customers.