Monday, June 13, 2022

How to Start a Side Hustle

Want to just get started? Click here to sign up for Incfile and register your side hustle as a business today. 

Side hustles are growing in popularity these days. The rising cost of living has forced many workers to pursue secondary and tertiary sources of income.

For others, a side hustle is a way to pursue their dreams and goals beyond a traditional career. Some want to create their own hours to travel, spend time with family and friends, or simply wake up whenever they want. Others want to escape the nine-to-five prison. And some just want to open up that online clothing boutique they’ve dreamt of since high school.

Creating a side hustle is hard, but it can also be very rewarding. When properly executed, a side hustle can help people achieve their dreams of doing work they’re passionate about, making some extra cash, or sleeping better at night knowing they have an alternate source of income.

But it’s important to get started on the right foot.

The Top Business Formation Services to Start a Side Hustle

Getting started on the right foot means registering your business as a legal entity. Whether it is an LLC, S-Corp, C-Corp, or sole proprietorship, you need to protect yourself and your business interests by registering with the state.

You can read our full list of reviews for each business formation service here.

5 Steps to Starting a Side Hustle

Now that you know the importance of registering your business, here are the next steps to take to get your side hustle up and running:

  1. Create a good business plan.
  2. Name and set up your business.
  3. Create a brand for your business.
  4. Start selling your products or services.
  5. Continuously grow your business.

The Easy Parts of Starting a Side Hustle

When starting a side hustle, you’ll find that there are a lot of things that are easier than they look. In an increasingly internet-based economy, there are plenty of resources to help you start that are free or very low-cost.

For example, if you want to open up an ecommerce store, it doesn’t take much. You could set up a Shopify store in mere hours. Or if you want to start a blog, you can do so easily with WordPress. In both cases, you don’t need to know much about coding, web design, or how to set up a website because these platforms have made it so straightforward (and inexpensive).

If you are ever confused or run into problems, YouTube tutorials, how-to blogs, and free online courses are readily available to help you out.

What’s more, there are now plenty of business services that have subscription models or free trials to help you get started without breaking the bank. For example, if you need a business email address, G Suite offers a 14-day free trial and is only $6 per month after that). And if you need to create and send invoices, Wave offers free invoicing and personal accounting for businesses.

Of course, not everything is going to be easy when starting a side hustle. But with the right mindset and some perseverance, you’ll be surprised at how quickly your side hustle can take off and everything can fall into place.

The Difficult Parts of Starting a Side Hustle

It goes without saying that everything worth doing is going to require some effort. And starting a side hustle is no different. The difficulties that people have with their own side hustles vary based on what their source of income is, how much time they can allocate to it, and who they are as a person. However, there are some common difficulties that most individuals face.

The most difficult part of starting a side hustle is usually the beginning. When you’re first starting out, there are a lot of unknowns and you can’t be sure if your idea will actually work or not. This can be scary and it’s often what prevents people from taking that first step.

Another difficult part of starting a side hustle is time management. When you’re working on another schedule while trying to grow a business on the side, it can be tough to find the time to do everything that needs to be done. This is where prioritization and time management skills come in handy.

Finally, it can be difficult to stay motivated when starting a side hustle. Unlike working for another business, you probably won’t see a check right off the bat. When you’re putting in the extra effort and not seeing results right away, it’s easy to get discouraged and give up.

This is why it’s so critical to have a clear vision for your business and what you want to achieve. Knowing your “why” will help you push through the tough times.

Step 1: Create a good business plan

Planning your business can seem stressful, especially if you have never done it before. A business plan is basically a roadmap for your business that will help you stay on track and achieve your goals.

Each business plan is different, but keep in mind that it doesn’t need to be perfect, nor does it need to be long. The best business plans are often simple and adaptable.

Here are a few things to consider throughout the planning process:

Identify your ideal customer profile (ICP)

As a small business owner, it’s essential to have a clear idea of who your target customer is. This is often referred to as an “ideal customer profile” (ICP). Knowing your target customer allows you to focus your marketing efforts and ensure that you’re appealing to the people most likely to buy from you.  

An ideal customer profile is a detailed description of your ideal target customer. It takes into account factors like age, location, gender, income level, and interests. By taking the time to create an ideal customer profile, you can ensure that your marketing efforts are focused on reaching the right people. 

There are a few key steps to creating an ideal customer profile. First, you need to consider who would be most interested in your product or service. Then, you need to gather data about this group of people. This can include demographic information like age and income level, as well as psychographic information like interests and lifestyle choices.

Once you have this information, you can start to create a picture of your ideal customer. Keep in mind that your ideal customer profile is not set in stone – it can change over time as your business grows and evolves. The important thing is that you have a starting point from which to focus your marketing efforts.

Figure out your business model

Your business model is how you plan to deliver your products and services to your customers. It is important to have a well-defined business model because it will help you to identify your target market, understand your costs, and determine your pricing strategy.

There are many different types of business models, so it is important to select the one that best fits your company’s strengths and weaknesses. For example, a subscription-based business model might be a good fit for a company that offers recurring or digital products and services. This type of model allows customers to pay a monthly or annual fee in exchange for access to your products and services.

In contrast, a marketplace business model might be better suited for a company that offers physical goods or services. This type of model allows customers to browse and compare different products and services before making a purchase.

Ultimately, the best business model for your company will depend on a number of factors, including the type of product or service you offer and the needs of your target market.

Decide what products and/or services to offer

If you are creating your side hustle, chances are you already have a good idea of the products and services you want to offer. However, it is important to take some time to think about your offerings in detail.

What exactly are you offering? What are the benefits of your product or service? How is your offering unique? Taking the time to answer these questions will help you to create a clear and compelling value proposition for your side hustle.

Additionally, thinking about your offerings in detail will help you to identify any potential areas of improvement. For example, if you are offering a product, can you improve the quality or packaging? If you are offering a service, can you streamline the process or offer additional features?

By taking the time to think about your offerings in detail, you can ensure that your side hustle is positioned for success.

Calculate startup costs

Estimating the startup costs for your side hustle is an essential part of the business planning process. Without a clear understanding of the financial investment required to get your business off the ground, it can be difficult to make sound decisions about how to progress.

There are a few key factors to consider when calculating your startup costs:

  • One-time expenses involved in getting your business up and running, such as website design or market research costs
  • Ongoing costs, like subscription fees or equipment rentals
  • The cost of your time; if you’re working on your side hustle after hours, you’ll need to account for the opportunity cost of foregone wages, missed opportunities with friends, and weekends you may need to forfeit.

By taking all of these factors into consideration, you can develop a realistic estimate of the startup costs for your side hustle.

Research your competitors

Researching your competitors takes time and effort, but it is essential if you want to stay ahead of the game. Here are a few tips for effectively researching your competitors:

First, take some time to identify your key competitors. Make a list of companies that offer similar products or services to yours. Once you have a list of potential competitors, narrow it down to the three or four that pose the biggest threat to your business.

Next, visit the websites of your chosen competitors and take some time to assess their strengths and weaknesses. Identify any areas where they are outperforming others and try to determine why this is the case. Likewise, look for any weaknesses or mistakes that you can exploit.

Finally, keep an eye on their activity on social media and other online platforms. This will give you an idea of what they are doing right and what could be improved. By keeping tabs on your competition, you can ensure that your business stays ahead of the curve.

Step 2: Name and set up your business

Once you have a solid plan in place, it’s time to start setting up your business. This includes choosing a name and registering your business with the appropriate authorities.

Choose a name for your business

A business name is more than just a label; it’s the first step in creating your brand identity. It’s important to choose a name that is both memorable and relevant to your industry.

The best business names are usually short and easy to pronounce, making them easy for customers to remember. You should also avoid names that are too generic, as this can make it difficult for customers to identify your business amongst its competitors.

Other factors to consider when choosing a name for your business include:

  • Is there a web domain available?
  • Is the name easy to spell?
  • Does the name have a positive connotation?
  • Is the name associated with an existing brand or company in the same space?

If you are stuck between a few different names, try imagining your business as a brand. Which name would work best as a logo or tagline? You can also try saying the names out loud to see which ones are the most fitting.

Register your business

How you decide to register your business depends significantly on the business structure you have chosen. There are a few different kinds of entities you can set your business up as:

  • Sole proprietorship: A sole proprietorship is the simplest and most common structure for small businesses. This type of business is owned and operated by one person, and there is no legal distinction between the owner and the business itself.
  • Partnership: A partnership is a business owned by two or more people. Partnerships can be either limited or unlimited, and there are several different types of partnerships, each with its own advantages and disadvantages.
  • Limited liability company (LLC): An LLC is a business structure that offers limited liability protection to its owners. LLCs can be either single-member or multi-member, and they are often used by small businesses because they offer flexibility and tax benefits. For most tax purposes, single-member LLCs are regarded as self-employment, but the LLC is valuable because it protects your personal assets from business debts and liabilities.
  • Corporation (C-Corp or S-Corp): A corporation is a legal entity that is separate from its owners. Corporations offer limited liability protection to their shareholders, meaning that the shareholders are not personally liable for the debts and liabilities of the corporation.

Once you have chosen a business structure for your side hustle, you will need to register your business with the appropriate authorities. This usually involves filing paperwork with your state, county, or city government.

You will also need to obtain any licenses or permits that are required for your business. The requirements vary depending on your business type and location, so it’s important to research what you’ll need before you get started.

Step 3: Create a brand for your business

Now that your business is validated and you have a plan in place, it’s time to start working on your brand.

Creating a strong brand is essential for any business, but it’s especially important for small businesses and side hustles. A well-defined brand can help you attract new customers and build loyalty among your existing ones.

There are a few key elements that you’ll need to consider when creating your brand:

Create a logo

When you are creating a logo for your business, there are a few things to keep in mind. You want your logo to be memorable and eye-catching. A simple, well-designed logo will be easy for customers to remember and will help to build brand recognition.

Additionally, your logo should be reflective of the overall tone of your business. If you are a professional service provider, your logo should convey that sense of professionalism. Conversely, if you are a more casual business, you can afford to be more playful with your logo design.

Keep in mind that your logo will likely be used in a variety of applications, from websites to print materials. Make sure that it is versatile enough to work well in any context.

If you aren’t sure where to start or don’t know how to design a logo yourself, there are numerous online logo makers on platforms like Fiverr and Upwork that can help you create a professional-looking logo for your business.

Design your website

In today’s digital age, having a website for your business is more important than ever. Not only does it give potential customers a way to learn about your products or services, but it also allows you to reach a wider audience than you ever could through traditional marketing methods. 

Start by choosing a domain name that is short, easy to remember, and relevant to your business. Once you have registered your domain, you will need to find a web hosting service. There are many different options available, so be sure to do your research to find one that meets your needs and budget.  

Once you have secured your web hosting, it’s time to start building your site. If you’re not familiar with HTML, CSS, or Javascript, there are numerous drag-and-drop site builders that can help you create a professional-looking site without any coding knowledge.  

Finally, don’t forget to promote your new website. Include the URL on your business cards and in any other marketing materials you use. You can also promote your site on social media or through online ads.

Create content for your business

As a business owner, you know that creating content is essential for promoting your products or services. But with so many different types of content out there, it can be tough to know where to start.

A good place to begin is by thinking about what kinds of content will be most useful for your target audience. If you sell products, for example, you might want to create product videos or demo videos. If you offer services, you might want to create how-to guides or case studies.

Once you have a general idea of the type of content you want to create, you can start brainstorming ideas for specific pieces. Remember, your goal is to create content that is informative and helpful to your audience.

With that in mind, consider what kinds of questions they might have about your products or services, and make sure your content provides answers.

Step 4: Start selling your products or services

Once you have your online platform set up, you’re ready to start selling! When doing so, there are a lot of factors to consider, including marketing, pricing, and tracking your sales.

Market your business to others

To market your products or services, you’ll want to take advantage of all the channels at your disposal, including social media, email marketing, and online ads. You’ll also want to make sure your website is optimized for search engine ranking so potential customers can easily find you when they’re searching for what you sell.

As you create your marketing materials, be sure to focus on the benefits of your products or services. What needs do they address? How will they make your customers’ lives easier?

If you plan on advertising, make sure to A/B test different ad copy and strategies to find what works best for you. It’s also important to keep track of your marketing efforts so you can see what’s working and what isn’t.

Pricing your products or services

When setting prices for your products or services, it’s important to consider the total cost of goods sold (COGS). This may include:

  • Manufacturing costs
  • Shipping and delivery costs
  • Software expenses
  • Cost-per-click (CPC) advertising

You’ll also want to make sure your prices are competitive with other businesses in your industry. Take a look at what others are charging for similar products or services, and adjust your prices accordingly.

It’s also important to consider the perceived value of your products or services. In other words, how much do customers believe your products or services are worth? This can be influenced by factors like your branding, the quality of your products or services, and customer reviews.

Track your sales

Once you start selling, it’s important to track your sales so you can see how well your business is performing. There are a number of different software programs that can help with this, including:

  • QuickBooks
  • FreshBooks
  • Xero
  • Wave Accounting

If you use a platform like Shopify or a CRM tool, that software will be able to give you analytical insight right away.

In addition to tracking your sales, you’ll also want to keep an eye on your website’s traffic. This will give you an idea of how many people are visiting your site and what kinds of products or services they’re interested in. Key metrics to pay attention to include:

  • Bounce rate
  • Pages per visit
  • Average time on site

You can track your website’s traffic using Google Analytics or another similar tool.

Step 5: Continuously grow your business

Once you begin to get traction, you’ll probably want to get more customers and grow your business. There are a number of different ways to do this, including:

  • Adding new products or services
  • Improving your marketing efforts
  • Offering discounts or promotions
  • Creating new content

You’ll also want to keep an eye on your finances and make sure you’re reinvesting enough money back into your business to support its growth.

Hire additional people to help with your business

Hiring people doesn’t have to mean paying them a salary and working with them full-time. There are a lot of inexpensive hires you can make that can prove invaluable to your business.

For example, a virtual assistant (VA) can help with tasks like customer service, project management, and basic management tasks that you may not have time for. You can find VAs on platforms like Fiverr or Upwork.

You can also hire contractors to help with specific projects as needed. For example, if you’re looking to improve your website’s SEO, you could hire an SEO expert to help you out.

Interns are also an excellent option, especially if you’re a small business or just starting out. Interns can help with a variety of tasks, and they’re often willing to work for free or for very little pay.

Get funding to scale your business

If your side hustle is beginning to take off and you’re ready to start scaling, you may need additional funding. There are a number of ways to get funding, including:

  • Self-funding: If this is a side hustle, chances are you are already doing this. But if you have some extra cash, reinvesting it back into your business can be a great way to fuel its growth.
  • Small business loans: These loans can be used for a variety of purposes, including expanding your business, hiring additional staff, or buying new equipment.
  • Crowdfunding: Platforms like Kickstarter and Indiegogo allow you to raise money from a large group of people.
  • Business credit cards: Business credit cards can give you access to cash that you can use to grow your business.
  • Angel investors: Angel investors are individuals who invest in businesses that they believe have high potential.
  • Venture capitalists: Venture capitalists are firms that invest in high-growth businesses, but there are strings attached.

You’ll want to do your research and choose the option that makes the most sense for your business.

Scaling your business can be an exciting time, but it’s also a lot of work. Be prepared to put in the extra effort and you’ll be on your way to success.

from Quick Sprout