How to Turn Your Side Hustle Into a Small Business
The gig economy in the United States has been booming for a few years, and you’ve likely taken part in it. According to a Gallup poll, more than one-third of Americans have some side hustle.
As the labor market shifts, people and companies must change how they approach jobs. For instance, Gallup’s poll showed that more than 60 percent of people working gig jobs prefer their side hustle to their full-time job.
The freedom and flexibility you can get as a gig worker are unrivaled. What if you could turn your gig job into your own business, truly be your own boss, and reap all the benefits? While it sounds too good to be true, you can turn a side hustle into a small business with some hard work and an entrepreneurial spirit.
How To Know You’re Ready
Wanting to run your own business and being ready to start are very different things. Before all else, you must be honest with yourself, know your limitations, and carefully plan your future.
1. Manage Your Finances
Odds are, if you’re working a side hustle, it may be because your primary source of income isn’t great. While that’s not a problem, you should have some money saved up and good credit before you attempt to start your own business.
To get off the ground, you’ll probably need to take out some loans and might struggle to pay yourself for a while. Take time to build up savings that can last you a few months, and look for ways to raise your credit score. The extra time you take to prep your finances can also help you map out your long-term goals. A little preparation goes a long way.
2. Know Your Field
Every industry is different, but the best way to be successful is to keep up to date with trends in your field. The better your grasp is on the market, the better your chance is of succeeding. Study other businesses that failed early, and see what mistakes they made. You’ll learn as much doing this as you would trying to copy previously successful models.
Regardless of your industry, you should know your costs, business model, and growth plan before you get started. This will help ensure that once you start your small business, it’s here to stay.
3. Build Your Brand
One of the scariest parts about starting a business on your own is exactly that: you are on your own. To truly be successful, you need to know how to promote yourself, since no company will do it for you.
If your online presence is expanding and more people are reaching out about your work, it’s a good sign that you’re ready to start your own business. To help get yourself there, shamelessly self-promote. If you’re confident enough to start a business, you should have the confidence to tell anyone about it too. Networking and self-promoting is an easy way to get clients when you open up shop.
Starting Your Business
1. Foundation into Structure
Now that you’ve laid the groundwork to get up and running, it’s time to launch your business. The first major decision you need to make is how to structure your business. This will affect how you get taxed and how much control you have over your business, among other things.
The simplest way to form a business is a sole proprietorship, where you have total control and full liability. You might consider filing as a limited liability company (LLC) or a limited liability partnership (LLP) if you’re working with others and want to mitigate risk.
Once you’ve done that, you should formally register your business, apply for any permits you may need, and get your tax ID information.
The U.S. Small Business Administration has a helpful guide to navigate the different types of businesses.
2. Think Big
While it’s always important to be realistic, don’t be afraid to swing for the fences. Set smaller benchmarks with aggressive targets to help motivate yourself when setting growth goals. This is an area where your mindset and attitude can drive or stall your business.
If you find yourself in a rut, take a look at what got you there. Are you hesitating to take on new projects? Or maybe you’re nervous about pitching new clients and that’s kept you stagnant for a while? Whatever the issue is, confront it with an aggressive, forward-thinking approach. That’s the only way to ensure your business grows.
For example, if you do find yourself nervous about pitching clients, ask why. If you’re not entirely confident in your business model, develop it until you’re content with sharing it. Always keep an eye on how to improve, and don’t let the fear of failure hold you back.
Be Willing To Sacrifice, But Stay Optimistic
You probably started your side gig because it was something you felt passionate about and love doing. That’s the key to any good business, but the struggles of starting a business might dim your passion.
Shifting from a side gig to a small business is hard work, and you must make sacrifices. You’ll be looking at long weeks without much return for a while (maybe even a couple of whiles). That means what once was a hobby you enjoyed may feel more and more like a time-consuming stressor.
This can be discouraging, but it’s part of the process. Even after you’re up and running, you’re still laying the foundation of what your business can become, so keeping your positive, long-term goals in the back of your mind can help in the short term. Know that everything you’re doing now will pay off in the end.
Great Minds Think Alike, But Fools Seldom Differ
One of the biggest pitfalls for new entrepreneurs starting a side hustle is a lack of different voices around them. Even if you plan to scale your business down the road, you won’t have a full team around you early in the process — if you have employees at all.
It can be easy then to only use your own ideas and rarely seek outside opinions. It is, after all, your business. But to succeed, you should surround yourself with smart, innovative people and be willing to take new ideas and criticism. This doesn’t just mean the employees you hire; anyone in your life can be a resource to help formulate ideas.
Adding a second set of eyes, especially from someone less attached to the project, can help you see things you may have been missing. Whether it’s friends or family, ask for help from those around you and listen when they have a different idea.