What to know before starting a side hustle

May 23, 2024

5 mins

What to know before starting a side hustle

Gone are the days when a 9 to 5 job was enough to pay your mortgage, buy a car, support your spouse, and raise children. Today, full-time workers struggle to scratch out enough to pay the rent in most American cities as housing prices continue to soar and the cost of living crisis smothers any hopes of attaining the American dream for most young workers.

In lieu of an economic revolution, many people are turning to a new revenue stream to keep their heads above water: creating a side hustle. While the idea of having a secondary job or small business to supplement your income is not new, the number of workers who aren’t making enough to make ends meet is. A shocking 45% of Americans currently have a side hustle, devoting an extra 5 to 10 hours per week on average to the endeavor.

Although the fact that nearly half of Americans are working more than one job may spell doom for our economy, starting a side hustle can be a lucrative decision if you have the energy to keep working after you clock out. Aside from the obvious benefits of having extra income each month, side hustles can also provide security in an uncertain economy as many workers face inflation and layoffs. Having a secondary income allows you to not rely solely on your 9 to 5, and can be used as a safety net when times are tough.

Apart from the financial aspects, launching a side hustle can also provide you with valuable opportunities to advance your career, expand your network, build new skills, or even explore a different industry. Whether you’re ready to start your side hustle or you are just exploring the idea, there are some key things to consider before you begin. So, what do you need to know about side hustles before taking the leap?

Side hustles are a real business

One of the most important reality checks you’ll need to face before starting your side hustle is that no matter what industry you’re in or how much time and resources you have to manage it, a side hustle is a real business. While it may not provide you with the same income as a full-time position, it requires just as much commitment. If you treat it as a hobby or something to do only when you have the energy, you’ll have a much harder time making it a success.

Before you take on additional work, it’s important to know how you can prioritize your side hustle. Remember that you will have real customers and clients to satisfy who won’t be happy if you’re leaving their project on the back burner or missing deadlines in order to prioritize your day job. Therefore, it’s crucial that you have the necessary time and energy to take on additional work before you make any commitments.

Preparation makes perfect

Once you’re sure that you have the bandwidth to successfully run your side hustle, the next step is planning. Perhaps you’re an entrepreneur with plenty of experience starting new projects, or maybe this will be your first time freelancing, starting a small business, or working part-time. Either way, there’s no such thing as being over-prepared when it comes to launching a side hustle. To ensure that you’ll be able to balance your new work with your 9 to 5, there are a few essential things to iron out before you begin.

The first is your schedule. You’ll need to decide how much time you want to set aside for your side hustle, and when you’ll be able to work on it. Everyone’s situation will be unique, so you’ll have to reflect on your current work situation and come up with a strategy that works for you. Do you have a flexible work schedule that will allow you to juggle responsibilities during the day, or will you have to carve out time every evening or during the weekend?

On that note, the second thing to consider is burnout. Many workers experience burnout at their full-time jobs, and adding a side hustle to your workload only increases the chances of spreading yourself too thin. So, it’s essential to monitor your work-life balance and make sure that you still have time to safeguard your time with friends and family, as well as your mental health.

Next, you’ll need to start building your business plan. It doesn’t need to be a manifesto, but it will be helpful in the long run to have an idea of how you’re going to price your goods or services, find customers and clients, network with other professionals, and manage your finances.

Consider the risks

There are many benefits to starting a side hustle. From increasing your financial security to advancing your career, working outside of your regular 9 to 5 can pay off in many areas of your life. However, before you dive in, it’s important to consider the potential risks and consequences of launching a side hustle. The first thing to consider is if your company has a policy on side hustles, and what their attitude towards it is. While you may not think that your day job would have any say on what you do outside of the office, some companies may want to keep you all to themselves.

Although most organizations won’t flat-out forbid having a second job on the side, they may still hold it against you. So, it’s important to think about your company culture and how it might impact your side hustle. If you can imagine your manager saying that you should be channeling 100% of your energy into your full-time job, or fearing that your new venture may compete with their business, you might want to take extra precautions. Even though companies can’t stop you from starting a side hustle for it, they could fire you for it.

In the US, most work contracts exist on an at-will basis, meaning that apart from various forms of discrimination, workers can be fired at any time, for almost any reason. So, it’s crucial to know that your full-time job will be safe if you choose to start a side hustle. If you’re not sure, try reviewing your contract, speaking to your manager, or reaching out to HR to learn more.

Another important factor to consider is the personal risk you take on, especially with entrepreneurship. At your day job, you won’t be held personally accountable for any financial or legal mistakes you make on behalf of the company, but when you work for yourself it’s your wallet on the line. Launching a side hustle is a great option for many people, but remember that it can open you up to legal risks from customers and clients in a way that you are normally shielded from at a 9 to 5.

Apart from possible legal issues, you are also assuming financial risk for any expenses your side hustle incurs. If you aren’t careful about how you take out loans, make purchases, and manage finances for your side hustle, you could wind up in a worse position than you were before in terms of income. This doesn’t mean that you should give up on your project, only that you should always take every precaution and be prepared when it comes to starting a new venture. If you manage it correctly, your side hustle could be the perfect next step in your journey to level up your career and finances!

Photo: Thomas Descamps for Welcome to the Jungle

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