How to get your side hustle off the ground
Intro
Put simply, a side-hustle has the potential to change your life.
There are many reasons why side-hustles are one of the best decisions you can make. Firstly, and perhaps most importantly, they help you to make more money and reach Financial Independence (FI) sooner. They’re also a great way to build new skills and make new connections. Finally, they allow you to reclaim your time and live life on your own terms.
The beauty of side-hustling is that once you initiate your first business idea, you begin to build an enterprise mindset and see money-making opportunities everywhere. Suddenly, the smallest of ideas can become a revenue stream.
In this blog, we’ll cover the time trade-off, how to pick the perfect side-hustle, market analysis and how to turn your side-hustle into a lifestyle business.
But first, let’s look at the benefits of side-hustles in a bit more detail…
Benefits of a side hustle
The reality is most people view side-hustles too narrowly, seeing them as a means to earning an extra $100 or $200 a week to spend on the weekend. But if you get them right, side-hustles can be transformative, providing you with vast sums of money that can subsequently be used to invest and compound. Once you have the revenue stream in place, it will have a profound impact on the time it takes you to reach FI.
However, it’s not all about the money. Starting a side-hustle also allows you to learn new skills on-the-job, whether that’s building a website, accounting, or learning how to analyse a basic client contract. All these skills then become a future currency that can be used to make money. There are also financial benefits, such as having the ability to run expenses through your business and consequently reducing your tax burden. As society moves increasingly online, having a personal brand is becoming ever more important. Again, a side-hustle can be used as a vehicle to discover what your personal brand might be and etch it into stone. Finally, in the long-term, you may be able to sell your business and earn a significant sum of money.
With all of this in mind, you’re probably wondering where to start? Luckily for you, our co-founder Grant has developed a 9-step framework that will help refine your thinking and put you on a path towards success.
9-step side hustle framework
How much time do you have? You need to map out when you’re free and how much time you can realistically commit to your project. Once you’ve done this, you can find a side-hustle that fits.
What are your hobbies and skills? Make a list of your top hobbies and skills – this will undoubtedly spark some ideas in your head and ensure that you enjoy selling your product or service.
Are you looking to create a product or service? There’s always the option to sell both!
Is there demand? You may think you have the greatest idea the world has ever seen. However, without demand, your idea will be worthless and you’ll end up wasting money and time.
Why would someone buy from you? It’s important to have a think about what your competitive advantage might be. How are you going to stand out from the crowd? What makes what you’re selling unique?
How much are you going to charge? Make sure that you never sell your time for less money than it’s worth.
How are you going to sell? Remember, your first five clients are the most important. Once they’re on board, learn from them and expand.
Are you going to hire help? Connecting supply and demand is an easy way to grow your business. Work out where the demand is, and if the supply is too low, hire people to fill it.
How are you going to turn your side-hustle into a lifestyle business? This is something we’ll come onto later, but start thinking about how you can convert your side-hustle into a passive income opportunity.
The time trade-off
The time trade-off is an important factor to consider when starting a side-hustle. Essentially, it’s about making sure the money you earn is worth the time you invest. To do this, you need to calculate what you predict your actual hourly rate will be and then make an informed decision as to whether the business idea has legs.
It’s worth being aware that side-hustles can be very time consuming. This is particularly true if you are trying to start something that you are not skilled in. In addition, the time commitment isn’t necessarily linear and there will be different points throughout your journey when more time is needed, especially at the beginning. One way to get around this is to block out a couple of morning or nights a week and use them to work on your idea; the time will soon add up and you’ll start to see the money come in.
The average person is likely going to have to add this time commitment onto their standard nine-to-five job. With that in mind, it’s important to make sure you’re working on something that you enjoy. You’ve likely heard of the adage: ‘If you find a job you love, you’ll never work a day in your life’. The same is true for side-hustles. More on this in the next section…
How to pick the perfect side-hustle?
The million-dollar question, quite literally. In order to answer this question, however, we need to ask more questions. It might seem nonsensical but trust us.
How much time do you have and how much do you need? This is important as it will narrow down what is possible for you.
Product, service, or someone else’s? Is there a physical product in your life that could improve it? Or a service that you feel would make your daily tasks more efficient? Or have you seen something so amazing, it needs to be sold more widely? There are pros and cons to each option, so spend some time considering each.
What skills do you already have? Make a list of your top skills, just like you would in a CV. This could be something like taking pictures, making logos, working out equations on Excel or creating eye-catching PowerPoint presentations. Try and pin your side-hustle to at least one of these.
What are your hobbies and what do you love to do? What’s your dream life? Is it mountain climbing, mountain biking, brewing beer, attending concerts? How amazing would it be if you could make money whilst doing one of these? Well guess what? You can!
Can I actually make it happen? Make sure that there is a connection between dream and reality. Although we encourage you to dream big, be realistic about the limits in your life. For example, do you have kids that need attention? Do you travel a lot for work?
How much money can you realistically make? How much scale does your side-hustle have? It doesn’t have to be a side-hustle that makes loads of money, but its worth being aware of how much you can make, as ultimately that’s the objective.
Does the side-hustle have passive income potential? Is there a limit to your scale? If you create an online course, this can be making money 24 hours a day, every day. However, if you’re hand-crafting a product, your side-hustle will only be making money at the same rate you can produce the goods. Don’t let that deter you though, there’s always the option of hiring!
We thought it would be helpful to list some of the most common side-hustles, to help get your brain juices flowing and get you into that enterprise mindset:
Teaching – there is massive demand for learning online, take advantage of it!
Creating a physical good/product – it’s never been easier to come up with an idea and outsource the development of the product, then sell it online
Creating digital goods – just like physical products, it’s incredibly easy to sell photos, videos and NFTs on the web
Offer a service – this can be something as simple as dog walking – find the demand and become the supply
Arbitrage – this is when you sell other people’s products - if there’s a product you believe in, form a relationship with the creator and get a commission for selling their idea
Real estate and house hacking – this is undoubtedly the fastest path to FI and is the perfect way to side hustle and invest at the same time
Blogging – the future of making money on the internet. It allows you to build a platform and an audience that you own. Channels like TikTok and YouTube are great, but you don’t own the platform, which means you are beholden to it.
Analysing market opportunity
Even though you may not be a multi-national corporation, market analysis is still critical to the success of your side-hustle. Those who don’t are setting themselves up for failure. Take the time to study your potential customers and evaluate whether the demand for your product or service is growing or declining. In most cases, if you Google search your idea and find that no one else is selling the same thing, it likely means that demand is non-existent, so it’s time to think again. On the flip side, if there are a number of hits after you press Enter, your idea has legs; you simply need to work out how yours is going to be better.
Your research doesn’t need to take long. All you need to do is spend two to three hours doing a bit of desk research. What you should invest your time in is what you are going to beat your competitors on: price, value, story or all three? Find out what all of these are for your competitors and go from there.
For someone who has never undertaken market analysis, it can seem daunting, so we though we’d give you some advice:
Use Google trends and search data to determine whether people are searching for what you want to sell – find out where the market is headed; is demand growing or increasing? There are third-party services that exist to help you with this, such as Google’s keyword planner
Talk to your market and survey them – getting out there and asking people whether they’d buy your idea will save you lots of time and money in the future. If you’re shy and timid about this, then it might be worth rethinking your business plan. Ultimately, people buy from people, so you need to be able to sell your concept in this way.
Use Google surveys - set up simple demographics and you can get a survey out in 5 minutes. It may not be the most sophisticated survey in the world, but it will do the job.
Talk to someone who’s already selling what you want to sell – people would love nothing more than to help someone like you get into the industry – you won’t be viewed as a competitor, you’ll be viewed as the next generation taking on the mantel of something they’re passionate about
Building a lifestyle business
The ultimate goal of a side-hustle is to turn it into a lifestyle business. In essence, this is a business that is built around your life, rather than a business that you build your life around. It’s a job that you love doing. It’s a job that gives you the autonomy to decide when you want to work. It’s a job that has the flexibility you need to live life on your own terms.
So, how do we know when our side-hustle is ready to become a lifestyle business?
Is your effectively hourly rate worth it? How much money are you making for your time? Is it just enough to get by, or can you live comfortably on the income?
Do you enjoy it? Only you can set the measure stick for your life. Does the work make you feel alive? Is it making you happy? Is it making your life better? Are you learning new skills and making new connections? If the answer to any of these questions is no, it may be time to stop and recalibrate. You could look at scaling back, delegating or hiring someone else. Learning when to be self-aware and knowing when to make these changes is essential for a lifestyle business.
How sustainable is your side hustle? Do you have a fad product or brand? Often, influencers blow up in the media, make lots of money, then suddenly go out of business. This is because popularity is volatile. Make sure that your idea can weather these changes in demand.
Does the cash flow support the business? Cash flow is the life blood of any side hustle. This is not just profit, it’s the money coming in to run your business. Make projections as far out as you can. Ideally, you should try and avoid taking out loans by becoming effective at managing cashflows in your business and in life. If there’s seasonality in your side-hustle, make sure to factor that in. Alternatively, make the trade off to work hard during half the year and relax for the rest.
What are your long-term prospects of the business? The further ahead you can plan, the more security you will likely have in the future. As you get better at doing this, you’ll find it far more easy to convert your side-hustle into a lifestyle business.
Charge more, hire more people, or do both? Sometimes you will end up working more hours than you expected, but also earning more than you expected. If this is the case, look to delegate some of your tasks. Nevertheless, don’t hire too early as this can bankrupt you. Instead, pay someone for 2 hours or 2 days and then re-evaluate. If you can, try to hire a believer – someone who will work with you, but also believes in your mission. This person will go above and beyond to add value to your business, unlike someone who is just trying to get their hourly rate.
Do you like managing people? If not, keep your teams as small as possible. It usually takes a long time to find great people, but if you manage to, it’s game changing.
Hopefully this blog has been helpful and has got you thinking about what your side-hustle could be. The framework that’s been shared is the exact path that was taken to build Grant’s business, allowing him to reach FI. We recommend that you work on your side-hustle for 6 months, then read this again. As your lifestyle changes, you’ll likely see things you didn’t before. Once you’ve nailed your business, you can then do more important things than making money, like living your life!