You’ve been pondering this side hustle idea for some time now, wondering if this is the one. You don’t want it to take up too much of your day (or your wallet) to implement it, but you do want it to be successful.
Of course, there’s a far more important issue that’s bothering you. It’s more fundamental than your specific idea.
Perhaps the first question you should answer is, “Do I have what it takes to be an entrepreneur?” Whether or not you know it, starting a side hustle is no different from starting a business. Sure, there are differences in the magnitude of things, but the areas of focus are quite similar.
Once over this hurdle, you can focus on your specific side hustle idea. This begins with a series of questions.
Is it a good idea to have a side hustle?
Why are you even thinking about starting a side hustle? What do you want out of it?
These are crucial questions you’ll need to answer. Don’t worry. Everyone has a different answer. It all depends on where you are in life. You might need extra income. You might be bored. You might want a challenge. Your age doesn’t matter. You could be a twenty-something just starting your career or a retiree.
“Most people take jobs for the pay and benefits and do something they don’t really love,” says Stephen Davis, CEO and founder of Total Wealth Academy in Houston. “Your side hustle should be something that you love and enjoy doing. Success would be when the income from your side hustle exceeds your wants and needs and when you are enjoying the process.”
How should you evaluate your side hustle idea?
If you look at the two restrictions placed on the venture in the first paragraph above, you’ve already begun to answer the question.
“A side hustle should require low capital to start,” says James Bowersox, founder of Pindrop, based out of Maui, Hawaii. “The operation of the business should require no more than a couple of hours per day. Running the business should not have other employees at the beginning and the ability to easily outsource whatever jobs help is needed. It is best if the hours required to run it are fluid, meaning the work does not have to be done at exact times in order to accomplish the goals.”
Time and money rule the initial assessment. You don’t want to spend too much of either. Once you consider these “outflows,” the next thing to look at is the potential “inflows.” This would be the prospect of bringing in significant revenue from your side hustle.
“I always tell my students to start by picking low-hanging fruit: niche services in low competition areas,” says Nick Wood, founder and CEO of Digital Landlords in St. George, Utah. “The whole nature of side hustles is to hack the game a bit. It’s making quick, easy money in a smart, efficient way. Side hustles can be glamorous in nature, but in my experience, it’s the ‘dirty work’ side hustles that can really be monetized quickly.”
Of course, if you’re interested in diving deep into this rabbit hole, there’s no reason you can’t give your side hustle idea a complete vetting with thorough tactical business analysis.
“Evaluating a side hustle with time analysis is an excellent way to evaluate a side hustle,” says Sacha Walton, business strategist and CEO of SWI Management in Hampton, Virginia. “Identifying how much time it takes to perform a service or create a product is essential in balancing a full-time job and family. We have to ensure that the allotted time allows us to be productive while valuing self-care. Another evaluation is reviewing the income-to-debt ratio. We have to measure the cost involved to produce a product versus the established sale price. In many cases, people who have side hustles are busy performing and not accurately setting a price that ensures a positive profit margin. Quarterly reviews are necessary in determining if we are on track for a positive revenue gain.”
More broadly, you can assess whether your side hustle has what it needs to meet your expectations by reviewing it from a strategic level.
“Evaluating a side hustle involves looking at both the financial and non-financial aspects of the business,” says Pini Shemesh, co-founder & CEO of MyTower in Tel-Aviv, Israel. “Factors to consider when evaluating a side hustle include:
- Financials: Review the revenue, profit, and other financial metrics to assess the performance of the business.
- Market potential: Consider the size of the target market and the potential for future growth.
- Competitors: Evaluate the competition and how the side hustle stacks up in terms of products, services, and brand.
- Personal satisfaction: Consider how much enjoyment and satisfaction the side hustle brings and whether it aligns with personal goals and values.
- Scalability: Consider whether the side hustle can be scaled up and whether there is potential for future growth.”
How do you build a successful side hustle?
It’s only natural for you to then ask, “How do I make my side hustle successful?”
You measure the success of a side hustle just like any other business, only different.
“A side hustle needs to be treated as a business,” says Frenchie Ferenczi, founder and CEO of Frenchie Ferenczi Strategies in New York City. “It’s the scale and reach that is different. In general, however, if the goal of your side hustle is to transition to a sustainable full-time business, then focus on building out the leading indicators you need to set yourself up to achieve the outcomes you want when you do the transition.”
Remember, however, this is a side hustle, not a full-time business. This means that the “time and money” governor will restrict how much of each one you invest in the enterprise. You’ll need to take advantage of your talents to get things done without putting in a lot of time and money.
“The key to growing a successful side hustle is to start by growing an audience while minimizing your budget and input time,” says Ali Smith, founder & multi-award-winning dog trainer at Rebarkable.com in Westminster, Maryland. “Use your strengths as an entrepreneur and leverage your network as much as possible to get it off the ground.”
How do you keep track of your side hustle income?
To get a good idea of whether your side hustle is on track for success, you need to keep your accounting ledgers up to date. If you can’t answer how much you earned in sales, you’ve got a problem. If you don’t know what your costs are, you’ve got a problem. And if your sales aren’t covering your costs, you’ve got a problem.
The first thing to do is to separate your side hustle finances from your personal finances. From there, the sky’s the limit.
“Deposit your earnings from your side hustle into your bank account,” says Wood. “Does it pay your rent? Does it buy you food? Does it give you the freedom to travel or shop? If not, keep going until you start making more money. If yes… keep going until you’re making even more money. The side hustle is a way of life. If you are putting in the work, you will be counting those earnings and you will know if it is working.”
What is the best side hustle?
If you’re like other people, your side hustle idea might be good, but you’ve got this feeling gnawing at you. Is it good enough? Is it the best side hustle for you?
Ah, “for you.” That’s the critical qualifier. You don’t need the “best” side hustle. You need the best one for you.
“What’s the best side hustle? The one you take action on!” says Nick Loper, founder of Side Hustle Nation in Sammamish, Washington. “While most Side Hustle Show guests have started with a service-based business, the ones with the most scale are often content-based businesses—websites, podcasts, YouTube channels, Instagram accounts, etc. These usually are slower to see results with but can become really profitable assets over time. The reason is it takes the same amount of effort to create a post that 100 people see as one that 100,000 people see. And once you have that audience paying attention to you, you can monetize with advertising, affiliate partnerships, or your own products and services.”
So take your idea and run with it. You may discover it’s the most satisfying way to achieve your lifetime dream.
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