The Ultimate Guide to Creating a Successful Side Hustle | INVESTEDMOM
Starting a side hustle on top of your full-time job can be a rewarding but difficult task. Just like with any other business, the hard part is starting.
Many things go into starting a side hustle, so feeling overwhelmed and not knowing where to start is normal, but if you're willing to put in a few hours of work every day, you can generate a serious income stream alongside your current job.
In this guide, we’ll explore how to create a successful side hustle that could generate a reliable second income.
What is a Side Hustle and Why Should You Start One?
A side hustle is an additional income stream or business you do on the side - alongside your day job. Having a side hustle is incredibly common in America. A recent survey estimates that around 44% of Americans have a side hustle that they actively work on, with Gen Z leading the trend.
"With inflation running rampant, more and more people have embraced side hustles out of necessity. Life is really expensive today, and many people need that extra side hustle income to make ends meet or to provide themselves with a little bit of financial wiggle room. Yes, many Americans have started side hustles to follow dreams and chase big goals, but for others, they're doing it because they need to." - Matt Schulz, Chief Credit Analyst at LendingTree.
Apart from combating rising costs, a side hustle can bring in significant income that could help you buy things you’ve always wanted. This could be that car you’ve always wanted or that vacation at the top of your bucket list.
Regardless of what you might’ve heard, a side hustle isn’t just a way of bringing in a “few extra dollars”. Many side hustlers can break the $1000+/month mark. This extra revenue on top of their full-time job helps them gain financial freedom.
There are many other reasons people consider starting a side hustle:
Paying off student loans while studying
Supporting their full-time income while generating extra revenue
Filling their spare time by doing something productive and profitable
Improving financial status and gaining better stability
Allow creatives to effectively monetize their skills which would otherwise be difficult
Whatever your reason is to start a side hustle, the most important thing is to start strong.
According to a survey conducted by BankRate, average side hustlers bring in about an extra $1,122 per month, but they also found that 1 out of 3 Americans still struggle to make ends meet despite having a side hustle on top of their day job.
So, in the following sections, we’ll explore in detail how to start a successful side hustle from scratch so you can transition into a part-time job or even quit your day job and grow your side hustle to a proper, stable business entity.
How to Start a Successful Side Hustle
We’re going to walk you through the exact steps you’ll need to take to get your side hustle going even if you are working full time. 43% of full time workers say they have a side hustle. Let’s dive in…
Identify Your Skills and Passion
The first step to starting a side hustle is knowing what you’re good at and what you’re passionate about. Remember that both skills and passion are important when deciding on a side business - passion without skill will leave you chasing something you can’t manage. Without passion, you’re going to be stuck doing something you hate (which is probably what you’re trying to escape at the moment.).
So, how do you go about this logically?
Determine What You’re Good At
If you’ve been surfing around online for a while you’ll see every other business page talking about the huge amounts of cash people are bringing with [insert highly profitable business idea here]. According to IncFile, 37% of Americans started a side hustle as a passion, but 41% started to spend more time doing this that they love. .
But, here’s the reality, most of the people that are getting a high ROI from those side hustles have a very good idea of what they’re doing. They know who to target, what they want, and how to sell it to them. Rarely is someone that skilled in their field.
For example, flipping properties can be a highly profitable side hustle if you have the money to do it, but if you don't know anything about house flipping, you'd risk biting off more than you can chew.
Determine what you’re good at by brainstorming your skills. At this stage, don’t fixate on whether you’re an expert. You don’t have to be an expert, but you have to have a good idea of what you’re doing to offer some value to your potential customers.
On the flip side, if you have an idea for a side hustle you know very little, or nothing, about, that doesn’t mean it would be impossible. It will just take more hard work. You can find a mentor who is already successful at doing what it is you want to do, or you can put in the time to research and learn as much as you can on your own. The key is to be as knowledgeable as possible before starting.
Offer the Solution to a Problem
If you’ve managed to find a skill you’re passionate about, you may have some information about that specific niche (more on niches later). With that information, ask yourself, is there a problem that other people you know are facing? If yes, how can your specific product or service help solve that?
As we discussed before, you need to be able to offer some value to your customers, and offering a solution to a problem they’re facing can be an excellent way for your side hustle to gain traction.
Can You Monetize It?
Making money from your side hustle may not be the only goal, but it surely tops the list. But investing significant time and money into a side hustle that isn’t profitable simply isn’t a smart decision.
This requires some thinking, but you need to ask yourself whether or not you can put a price on your offer. You’d need to look at it from the customer’s point of view.
For example, nobody would be willing to pay you to get family photos taken with your phone camera, but if you’re good at taking pictures, you could invest in a nice camera and start charging for photo sessions.
Think about what you enjoy and what you’re good at it. Could it provide value for someone?
Choose a Profitable Niche
A niche is a specialized segment of a market. Within a niche, you focus on specific customer segments of a broader market, for example, a web designer offering design services to local dentists.
Many people think that choosing a narrow niche would mean fewer customers, but in reality, you’ll gain more targeted customers who’d be willing to buy from you. This is because by specializing in a niche you can gain authority and better cater to your customers’ needs - eventually leading to you becoming an industry leader within that specific segment.
"People fear that niching down means 'missing out, 'that's a false assumption. Creating a niche for your business allows you to simplify your messaging so you don't have to do as much ‘marketing’ or explaining. It allows you to simplify your product so you don’t spend time building or creating things no one wants. Niching down helps you level up - your customer experience, your focus, and your value.” - Misti Cain, Business Strategist and Founder of Whyzze
When starting your first side hustle, it can be challenging to find a profitable niche, so here are some ways to do so.
Perform Market Research
From our previous sections, we discovered some of the skills, passion, and resources you have to start your side hustle. Now you have to look for a profitable niche to operate in.
When finding a niche, you should ensure it’s not too broad or too narrow so that you can effectively stand out. To do so, you need to perform market research.
There are two main ways of conducting market research:
Primary market research - This refers to the research you do and the information you collect first-hand. Initially, you may not have a lot of funds to conduct large-scale research so you could gather information from your potential customers by interviewing people or creating and distributing questionnaires.
Secondary market research - This refers to research that you gather from other existing sources of research. This can be something as simple as searching online for the product or service you plan on selling and determining whether there’s a demand for that specific thing.
Market research is conducted to validate your business idea and see if there is a demand for your product or service. Conducting both primary and secondary research reduces the risk of failure and can result in a more customer-focused solution.
If you conclude that there isn’t a high demand for your product/service, you can pivot and adjust your offer to appeal to a larger audience.
Take a Look at Your Competitors
Alongside market research, conducting a competitive analysis is important to assess your current competitor’s strengths and weaknesses.
To conduct a competitive analysis, you have to identify your industry competitors. A good practice is to make a list of the top 5 competitors in your industry and perform a SWOT analysis to identify their strengths and weaknesses.
“In war, the way is to avoid what is strong and to strike at what is weak” Sun Tzu, Art of War
Your main goal is to target what your competitors are missing and make sure you provide everything plus that.
Create a Detailed Plan
“By failing to plan, you are preparing to fail” - Benjamin Franklin
Plotting out a detailed business plan before investing in your side hustle is essential to success. Your plan will outline your goals and how you will achieve them. A detailed plan can increase your chances of success and guide your decision-making.
Everyone’s plan will be different, but here is a basic outline to get you started.
Set Your Goals and Objectives
Decide what you want to achieve with your side hustle. Most people might build a side hustle out of necessity or as a new hobby. Either way, you need to state your goals clearly as it will give you a clear view of what you want out of your side hustle.
A time-tested technique for setting effective goals is using the SMART principle. Here’s a breakdown of how to set SMART goals:
Specific - Have a specific goal in mind and make it narrow enough to pinpoint exactly what you want out of your side hustle.
Measurable - The goals you set should be measurable to determine if you’re making any progress or not.
Achievable - Set realistic goals that you are confident can be achieved within the time you’ve set.
Relevant - Your goals should be relevant to your business values and align with your long-term corporate objectives.
Time-bound - Set deadlines for achieving your goals to prioritize tasks and keep yourself disciplined.
Decide How You’re Going to Fund Your Side Hustle
After setting your goals and objectives, you need to decide how you’ll be funding your side hustle
You’ll often find people investing their valuable time and money into the “next big thing.” However, when you’re starting a side hustle, it’s wise to keep your costs at a minimum. 32% of side hustlers spend only 5-10 hours per week working on it!
Look for what you can do with your current resources. You might think that starting a taxi service can be a great side hustle but when you’re just starting out, it isn’t worth being thousands of dollars in debt for.
We discussed earlier that you shouldn’t invest a lot of money into your side hustle when starting out and should look for alternative sources of funding.
Some potential sources of funding worth exploring are:
Savings - self-funding your side hustle is typically your first resort and is a safer way of starting your side hustle. You may not have a lot of money to invest but you can start with inexpensive or free resources and gradually work your way up to using premium tools and platforms and launching your own product line
Bank loans - getting a loan from a bank can be a great way to get your side hustle up and running faster. However, you’ll need good business credit and would also be starting with debt - which is usually a bad idea when running a side hustle
Angel investors - Angel investors are investors who may be interested in your idea and who would invest in your business in exchange for a share of the business.
Family and friends - borrowing money from family and friends can be a reliable way to fund your business as you can trust them. However, to avoid personal conflict, it’s often recommended to not get family and friends too involved in your business.
Crowdfunding - if you believe you have a valuable offer, you can get funds from people who may be willing to contribute to your product/service through online crowdfunding platforms. The positive is that you don’t have to give up a share of your business nor would you be going into debt, but by running a crowdfunding campaign, paying taxes on the generated amount, and also paying the fee of the crowdfunding platform you’d be set back a significant amount.
Create a Financial Roadmap
A financial roadmap will help you visualize your financial status and keep track of your long-term financial goals. This roadmap will incorporate anything money-related to you and your side hustle.
To create an effective financial roadmap, you should:
Determine your total costs, expenses, assets, liabilities, and spending.
Set goals and milestones that align with your long-term financial goals.
Evaluate your budget quarterly, monthly, or yearly and make adjustments.
Save money for business emergencies.
It’s worth noting that a financial roadmap doesn’t just incorporate your business finances, but provides a guide for your overall financial self-care.
Determine How You’ll Monetize Your Product/Service
It’s best to figure out how you’ll monetize your side hustle during the initial planning stage. This will save you a lot of regret for starting a business that can’t seem to stay afloat.
If you’re starting a side hustle online, you have a multitude of ways to monetize your business. Some ways you can monetize your side business online include:
Selling a Product/Service
Selling your own product or service can be one of the most reliable and profitable ways to monetize your side hustle. If you work as a skilled professional you may be able to create your own product but if you can’t you can also resell products from wholesalers such as Alibaba. Another way is to sell digital products such as an eBook or online course.
Display Advertising
This is one of the most common ways to make money from your side hustle. How it works is that you display ads on your website that are typically served through an ad network like Google Adsense. As you gain website visitors, and in turn views on your ads, you get paid directly or indirectly from marketers running marketing campaigns on your website. Display advertising is best for monetizing blogs, online tools, and forums.
Sponsorships
As your side hustle gains traction you can reach out to brands and offer to sponsor their products/services. Sponsorships are the typical monetization method influencers and YouTubers use to generate the bulk of their income. To get a sponsorship you can start by going to a relevant brand’s website and email them showing interest in mentioning their product or service to their followers. Keep in mind, this method is effective only when you have an active and engaged audience.
Affiliate Marketing
Affiliate marketing is a business model where you recommend a product or service to a potential customer and when they buy from you, you earn a commission on the offer. You can get started with affiliate marketing by registering on an affiliate network or reaching out to brands in your niche to get directly affiliated with them. Once partnered with a brand they will give you a unique link which will track your conversions and be used to send you your commissions.
These are some of the common ways people monetize their online side hustle. However, a better idea of how you can monetize your business would be to analyze the data you gathered from your market research and competitive analysis.
See how other people in your niche are monetizing their side hustles - are they selling digital products, earning commissions from affiliate offers, or offering services directly to clients? Etc.
Also, try to develop an understanding of the market you’re in.
For example, making and selling online courses on how to learn English to your foreign audiences can be a great way to earn extra money. But, it might be that foreign speakers highly value the physical interaction with their teacher to better grasp the language - this means that teaching an interactive class would be a much better side hustle idea than selling digitally.
Market Your Idea to the World
“Ignoring online marketing is like opening a business but not telling anyone.” - KB Marketing Agency
You might have a great business idea, but you're the only one who knows about it. In the case of a successful side hustle, it's not a "build it, and they will come" situation.
You’re going to need to get the word out.
Good marketing is the foundation of any successful business. The key is to reach your target audience. So, how are you going to do that?
Create Your Business’s Social Media Accounts
An online presence is essential to reach a wider audience and get your brand's name out there. You can start by creating an account on each popular social media platform. These include:
Facebook
Instagram
Twitter
YouTube
Pinterest
Even if you don’t think one of the above platforms is right for your business, it’s still important to claim your business name and create a relevant handle (@yoursidehustle) for your account before it gets taken.
Next, after registering yourself on social media, go ahead and fill out the basic details, including your business name, contact, email, image, etc. You should also add an attractive cover image and a few posts to make your pages professional.
Register Yourself on a Platform
Depending on what your side hustle is, there should be a platform that will help you get started.
For example, if you plan on making extra money as a driver, you can register on Uber or Lyft. If you’re a skilled writer, you can register as a freelancer on Fiverr or Upwork.
Find a platform to help you get noticed, gain some early traction, and find clients early on.
Make a Website for Your Business
Having a website for your business is essential in the modern internet era. It helps people discover who you are online and see what you offer. You can create a professional custom website with WordPress or a simple free one with Google Sites.
Whichever platform you choose to host your site, make sure to include an attractive homepage, an about page, the services you offer, and a way for customers to contact you.
Wrapping Up
A side hustle can be a great way to make an extra income alongside your full-time job. The US Side hustle market is valued at over $2.58 trillion! We’ve learned that running a successful side hustle is no easy task. It takes a significant amount of time to get your business up and running, making patience your most valuable asset in the initial stages.
We’ve also learned that through hard work, you can create something great.
For more help getting started, contact me today!
Meet the Author:
Inge was born and raised in Cape Town, South Africa, and moved to Canada in 2010 looking for a better life. She always had an entrepreneurial spirit and started her first side hustle when she was 9 years old – selling fudge at school during lunch breaks.
It wasn’t until much later that she realized that saving isn’t enough to get ahead. She was always very interested in real estate, but saving up for a down payment was grueling and slow, and the demands of life kept getting in the way.
She started investing in herself and upgrading her skills while learning how to invest. She quickly became debt free and compounded her money at a staggering rate.
It wasn’t until she became a coach that she realized how significant an impact she can make in people’s lives by sharing her journey, learnings, and processes.
So here she is, advocating for everyone who is invested and wants to build their wealth, especially the mommas!