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A side hustle can be a lifeline.
it’s not only an opportunity to earn some extra money, but it can be the key to making ends meet, paying off high-interest debt, saving and investing more, or even breaking free from your day job.
Almost half of working Americans report having a side hustle, according to a 2019 Bankrate survey. And as the pandemic drags on and the recession lingers, more and more people are looking for new ways to generate income. Launching a side hustle may be the answer for many people.
Anthony and Jhanilka Hartzog, co-founders of the personal finance site The Hartrimony, paid off $114,00 in debt with a variety of side hustles. They were able to pay off their debt in only 23 months thanks to the income from gigs like renting their car on Turo and starting a residential cleaning business.
The pandemic has created new needs for people, side hustle experts say, which presents new opportunities to help meet those needs. According to the U.S. Census Bureau, new business applications surged during 2020.
Even with quarantine restrictions in place, there’s no shortage of opportunities. The first step is to figure out a service that you can provide to others, says Nick Loper, founder of Side Hustle Nation. He says to look for “problems you’ve overcome in your own world or problems you can perceive other people having.” Some common examples of popular side hustles include freelancing (writing, design, etc.), creating online courses, gigwork (rideshare, dog walking, food delivery), and online tutoring.
Before you jump in the fray, there are a few simple things you can do to give yourself the best chance of success.
5 Side Hustle Tips for the New Year
Choosing the right side hustle for your personality and skill set is important; if you dislike selling, you probably shouldn’t start a business that involves reaching out to people individually. But if you’re great with animals, a pet service would be a good fit. Make sure you’re investing your time on the activities that matter the most.
A side hustle needs to make money, so don’t be afraid to charge for your services. And plan to spend a good amount of time on sales and marketing, too.
We sought advice from six experts, all of whom have started side hustles and have helped others build their own successful businesses on the side.
1. Start small, and don’t invest right away
The value of starting small can’t be overstated. Making small steps to launch a side hustle today puts you well ahead of those who start tomorrow.
“The best time to start is right now,” says Susie Moore, a business coach and author of the side hustle guide What If It Does Work Out? But she doesn’t believe that quitting your day job is the right move for everyone. Moore grew her life coaching business for 18 months before deciding to quit her job and do it full time. “I waited until I was making a steady income month to month,” she says. “When we’re strapped for money we don’t make good decisions.”
Taking small steps also allows you to wisely invest your resources in the beginning. “The scariest mistake people make is trying to have everything perfect before they have any real validation,” Loper says. Don’t invest $30,000 — or even $3,000 — creating a website before you gain a single customer. “Validate and sell it first, then if you have traction and you want to invest in it, go for it,” he says.
Slowly growing your side hustle allows you to make adjustments as you go, which is much less risky than going all in at the start.
2. Find the right side hustle for you
The right side hustle for you should meet three criteria: You’re good at it, you enjoy it, and you can make money doing it.
This might seem like an impossible goal, but you can start by simply thinking about what you’re already good at. “We take what we know for granted and think it’s not a worthwhile skill,” Loper says. But one skill can work as a strong foundation for a new business.
If you have trouble determining your strongest skills, consider turning to those who know you best. Go to your friends, family, or coworkers and ask them to help you figure out your strengths. You can also look at your previous experience. “What is a question that people always come to you with? For us it was paying off debt … so we built an online course for paying off debt,” says Anthony Hartzog.
Embrace the skills you’ve learned at your current or previous jobs, which might be applicable to a side hustle. “As long as there’s no conflict of interest with your current job, you can go off and create your own thing on the side and get paid for it,” says Marc Russell, founder of the personal finance Instagram account Betterwallet. If you’re a teacher, you can tutor online. If you’re a car mechanic, you can fix up and sell used cars on the side.
“Why not use the expertise you have that’s making your employer money — to make money for yourself?” he says.
Your side hustle should be something you look forward to doing and adds value to your life, rather than detracts from it. At the same time, don’t set such a high bar that nothing will ever meet that criteria. “You have to like it. It doesn’t have to be a life passion, because you can spend a whole lifetime looking for that,” Moore says. “You have to enjoy the work you’re doing because in business there are always obstacles.”
If you’re wondering how to make money from a side hustle, Loper has this simple advice: Insert yourself where the money is already flowing. If you want to sell physical products, go where people are already shopping, like eBay, Etsy, and Amazon, rather than starting off with an online store of your own. “Ask yourself, ‘how are customers already solving this problem?’ If you can wedge yourself into those marketplaces and make it easy for people to do business with you, then you’re setting yourself up for success,” he says.
3. Be clear about your reasons for starting
Not everybody wants to leave their full-time job. Your reason could be paying off debt, building an emergency fund, investing more for retirement, or saving up for a home down payment.
“When I’m working with someone, the first two weeks is not focused on what they are going to do, but why they are going to do it,” says Travis Sherry, founder of the travel blog Extra Pack of Peanuts and co-founder of the side hustle school, Lifestyle Launch Academy.
When you start with an end goal in mind, it’s much easier to measure your progress. Remember that your side hustle doesn’t have to turn into the next million-dollar idea. It can still be a success if it helps you reach your specific goals.
For the Hartzogs, launching a side hustle was about paying off debt. “We started out trying to pay off $114,000 in debt,” Anthony says. During this time, they prioritized side hustles that fit into their work schedules. “We were able to do all of our side hustles while working our 9-to-5 jobs because they were so flexible,” Jhanilka says.
Ultimately, you don’t want to build something you end up liking less than your current job, Sherry says. “Start by figuring out what your ultimate lifestyle would look like … and ask yourself, ‘what type of side hustles could I build that would allow me to have that lifestyle?’”
4. Prioritize your time
The 24/7 “rise-and-grind” hustle culture claims you have to give up sleep (among other priorities) in order to build a successful side business. Not so, says one expert.
“It’s a huge myth that you have to spend 15 to 30 hours a week on a side hustle or it will never take off,” Sherry says. Instead, he recommends setting non-negotiable times to work on your project. This doesn’t need to be an unreasonable amount of time. “For me it was Tuesday and Thursday from 4 to 7 p.m. … even before I knew how I was going to make money from it, and how I was going to monetize it, I committed to those hours.”
If you still feel you don’t have enough time to finish an immediate task, Loper suggests chipping away at it anyway. “You find that opportunities become visible once you’re in motion,” he says. Whatever small amount of time you do have matters, because the truth is “you’re never going to have an uninterrupted 38-hour block of time to knock out a project,” he says.
And don’t underestimate the time-honored tradition of deadlines. “Deadlines work … action brings the magic,” Moore says. What deadlines can you create for each stage of your project, from generating ideas, locating customers, starting outreach, or launching? Small, concrete deadlines on your calendar can nudge you into action and free you from overthinking things.
5. Ask for what you’re worth
Being afraid to charge people for your services can be a big challenge to overcome for your first side hustle. “When I first started off, I hesitated. Do I really want to charge for promotions?” Russell says. “But over time I realized that I’m fulfilling a need that another company has.”
“People are very shy about it, but you have to put a price on what you do and have a very clear method of payment,” Moore says. And it’s important to spend a good chunk of your time on activities that actually generate revenue. “You can do a lot of busy work that results in zero dollars,” she says. “Expect 80% of your time in the first few months to be spent on client acquisition.”
Sherry also believes you should spend a large portion of the non-negotiable time you’ve set aside for your side hustle on figuring out how to get your message — and product — out in the world. “Sales and marketing scare people, but I think you have to commit at least a third of your time to something that will directly monetize your business,” Sherry says. You can spend the time necessary to refine and hone your product, but eventually need to release it and allow people to find you.
Creating extra income with a side hustle is a great way to pay off debt, build your emergency fund, or invest for retirement. And as unemployment remains high, a side gig is a way for many people to pay essential expenses.
No matter the reason for making a little money on the side, there are a few simple principles you can follow to increase your chances of success. Once you’ve found an idea that’s a good fit for you, start small and make your project a priority. And when it comes time to sell your product or service, don’t be afraid to charge a fair price for what you’re offering.