Interested in starting your own successful side business? Side businesses (commonly known as side hustles) are businesses that you operate on the side while working a regular day job. They can be an amazing source of supplemental income while retaining your secure and reliable day job.
Benefits of having a side business
- Income growth (career progression may not be viable for some).
- A bridge between working full time and working on a business full time.
- Potential career change.
- Small capital outlay to start a business.
- Relatively low-risk business.
If done properly, you should earn additional income through your side business. Others want to work on their business full time but cannot afford the luxury of leaving so they run on their business on the side while working full time. Some side businesses can become passive incomes. If you intend to change careers, having a side business could lead to that if you become famous for your specific skill. Some amateur photographers end up having successful careers/businesses due to their side business as a photographer.
Downsides of having a side business
- You will need to work more than usual and outside of regular working hours.
- You will need to outlay some capital to get started.
- May need to change jobs with more suitable hours.
- May not have enough time to run your business properly.
- You will need to balance both work and business responsibilities at the same time.
There are numerous downsides to having a side business, most of which aren’t really that bad. The main issues are that your work hours are limited to after work hours. If you need to make cold calls to win over clients, it may be difficult to do this whilst working 9-5. You may need to change your hours or job if work and your side business are too conflicting.
1. Evaluate yourself objectively
Similar to our in-depth guide on starting a business, you will first need to evaluate yourself objectively to determine your skills, passion, and capabilities. YouTubers predominately start out doing videos about their interests such as gaming, makeup, etc. It eventually becomes lucrative due to their passion and persistence (only possible if you are doing what you love). For some, it is coding and for others, it might be photography. A good start is to look at your interests currently.
Ask yourself the following questions:
- What do you enjoy doing in your spare time?
- What have you been passionate about in the past?
- What skills do you have which are valuable?
- What would you do if you didn’t need to work?
- Can you see yourself doing this after work?
2. Think of a side business idea
The best piece of advice that any entrepreneur can receive is that there are a million good ideas, find the right one that you can execute well. You will need to consider a few things during the stage while you’re conjuring up viable ideas.
The best places to start for ideas are based on your interests, skills, and passions. If you are already coding, do something related. If you enjoy photography, consider doing a niche in photography.
Answer the questions below for your side business idea. If you struggle to do so, it may a good idea to come up with another idea. The idea here is to come up with potential side business that can be successfully executed. Once you’ve answered the questions and are happy with the answers, you can shortlist that idea.
Important considerations for a side business:
- Competition – Will you be able to compete with your competitors?
- Barriers to entry – Is there a cost barrier to start your business? Is it something you can overcome?
- Your limitations – Are your skills enough to execute this business idea?
- Business model – Do you know how your business model will work?
- Client acquisition – Is your business client-facing? Who are your potential clients and how will you acquire them?
3. Research stage
You have a shortlist of ideas. Now you will need to do more research into the feasibility of the shortlisted ideas that you like prior to committing to any. By doing more research into the shortlisted idea you will learn more and know with a higher degree of certainty that you genuinely can execute this idea.
Find out the answers to the following questions:
- What will you need to set up a business? (Equipment, tools, software, hardware, compliance, etc.)
- What will the start-up costs be?
- How much will you earn per customer?
- What will your overhead costs be? (Rent, utilities, etc)
- Who are your competitors?
- What is the market size of your target demographic?
- Is the financial risk of this business venture too high for your appetite?
- What is the risk/reward? (low risk, high reward is optimal)
- Can this business be a side business or will it require your attention full time?
4. Formulate an informal plan
Okay, so you think your business idea is solid. You know how you will fund the business venture and have a good idea of how you will acquire customers. It is a good idea now to formulate an informal plan to pave the way to starting your business. Write it all down on a word document as this is the best to make your ideas more concrete.
Please consider the following things when writing down your plan:
- The business structure set up/costs
- Domain name, trademark, trading names
- Website, social media accounts
- Equipment, tools, software, hardware
- Plant, office, shop, property lease
- Customer acquisition
5. Get feedback
Once you have a road-map, find out what your family and family honestly think about your idea. Try to approach people who are business savvy as opposed to those who are not. If they have serious concerns about the viability and they’re business savvy, it might be a good idea to address those concerns. If their issues are problems you have already considered, then they shouldn’t affect your decision to commit.
The idea behind this exercise is to get honest feedback from people that have a vested interest in your success. If you feel confident after receiving feedback, it should encourage you to commit to your side business. Try not to react poorly if the feedback is negative, which is always possible when asking someone for their honest opinion.
6. Commit to idea
So you’re confident about the viability of your side business and you’ve received some feedback which hasn’t shaken your confidence. Now it is time to commit and start getting to work! You need to allocate time to work on your side business regularly. It may be before/after work, during lunch breaks and/or weekends but you will find it virtually impossible to get your business off the ground without dedicating time to it.
7. Start side business
To start your side business, simply follow the road-map that you came up with earlier.
The normal process to start a business is to:
- Set up your business entity (ABN)
- Set up your business trading name
- Trademark your business name (if you care about your business name in Australia)
- Register your domain name
- Register social media accounts
- Create a logo for your business
- Build your website
- Organise a bank account
This obviously differs from business to business. If your side business is being a YouTuber, you will need to adapt and change your road-map to setting up your business. In that example, you will have to register an Adsense account and YouTube account rather than set up a website.
8. Grow your side business
You will need to get creative when growing your business. To do this successfully, you need to figure out how to acquire new business in your industry in a cost-effective way. Trying to outspend larger companies on Google Ads or Facebook will NOT work.
Maybe you have access to a pool of clients from your day job. As long as there is no conflict of interest you can pitch your business to them if it is relevant. Perhaps you are part of a social network where there are useful connections.
Freelancing websites can be difficult to get traction on due to the competition and race to bottom hourly rates. There have been success stories of businesses that got started by doing freelance gigs. Don’t be shy to experiment as you have more to gain (and less to lose) when your side business is small.