How To Start A Side Hustle: A 7-Step Guide

So you’ve had thoughts of starting your own business for a while now. Unfortunately, life keeps getting in the way. You’ve got bills to pay, a job to perform, and relationships to maintain. Yet you remain unsatisfied by working for “the man” and don’t want your entrepreneurial dreams to wither on the vine.

Your discontent may grow to the point where you’re ready to just ditch your day job and go all-in on your business idea, throwing caution to the wind. While I don’t want to throw cold water over your entrepreneurial dreams, you probably shouldn’t go about following your bliss this way! After all, most new businesses fail, and many successful entrepreneurs have a failed startup (or three) in their past. If you quit your job and bet the farm on a startup that fails, you won’t be in a position to try again — you’ll be too busy picking up the pieces of your life.

The truth is, many successful companies begin as side hustles. Starting small but allowing room for growth gives you a chance at ultimate success while ensuring that if things don’t go according to plan and your side business fails, you’ll still have your primary source of income, setting you up to try your hand at entrepreneurship again.

Let’s go through the seven steps to follow when starting a side business while keeping your day job!

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Step 1: Find A Great Idea

When considering how to start a side hustle, think about the skills you’ve picked up at your current job. You may well have acquired marketable skills in your current position that could form the basis for your new business. With a set of monetizable skills, you can always offer consulting services to those seeking the knowledge you already possess.

Of course, if you’re not passionate about your current job and what you’ve been doing there, you should probably try something else. If your side business doesn’t involve something you love to do, you’re less likely to maintain the commitment you’ll need to see it through. Besides, who wants to start a business doing something that doesn’t bring joy or satisfaction?

As you run through ideas, consider whether or not you know anybody with experience in the field in question — somebody who could possibly recommend your services to others, or perhaps somebody who can give you honest feedback about the viability of your idea for a side business. Whatever it is you want to delve into, you’ll want to get some measure of validation beforehand from people with expertise in the subject.

Looking for some specific examples of businesses you could start? Check out our piece on side hustle ideas!

Step 2: Make A Plan

When laying out a plan of action, commit to setting aside a certain amount of time per week that you can devote to building your side business. This will almost certainly involve some tough choices. If you spend lots of time each week playing video games or reading your Twitter feed, those are obvious places to cut back. However, if you truly want your side hustle to grow and thrive, you’ll likely have to make some harder cuts. Going out with friends, going to the gym, taking a morning jog before work, even sleep — these are all things you may have to reduce if you want to give your business the attention it will need.

Hey, nobody said this was going to be easy!

Depending on the type of side hustle you’re considering, look into the requirements for running a business in your chosen field. Consider whether you’ll need any certifications to establish your qualifications or any insurance for protection. On that last point, check out our article detailing the types of insurance you might need when launching your business.

If you’re considering starting a freelance business, you may want to look into accounting software that can help you with creating contracts, such as AND CO. I should note that Square provides template contracts, free of charge.

Step 3: Seek Financing

Before your side hustle becomes profitable and self-sustaining, you’ll need to cover the costs of getting it off the ground. Inventory, software, a website — these things all need to be financed. You’ll need to set a budget and seek out funding sources.

Getting a business credit card is perhaps the most common means of financing startup expenses. You can also try taking out a loan. If you do, you may find it easier to obtain a personal loan (which can be used for business purposes) than a bona fide small business loan. Just be wary of taking on too much debt at this stage. You’ll have to pay off any debt incurred, lest your business foray result in lasting damage to your personal finances.

Another potential source of capital for your side hustle — a resource more commonly tapped than most entrepreneurs like to talk about — are your friends and family. Again, make sure you can pay them back — you don’t want a business failure (remember, failure is incredibly common in this arena) to imperil your lifelong personal relationships.

One thing that will greatly simplify your taxes and your accounting is to keep your personal and business financials separate from one another. If you’re able to get a loan, consider setting up a separate business bank account for the funds obtained and using the funds exclusively to fund your side business. Separating your personal and business finances is important if you want to avoid getting audited, among other things.

For more on financing a side hustle, check out the following links:

• 20 Tips To Improve Your Business Loan Application
• The Best Business Credit Cards Of 2019
• How Much Money Do You Need To Start A Business?
• How To Start A Pet Sitting Business
• How to Start And Fund An Online Boutique

Step 4: Find The Right Software

Regardless of the sort of side business you intend to start, you’re almost certainly going to need some business software to keep things running smoothly. It’s exceedingly difficult to run a modern business without accounting software, and you’re definitely going to want to start a website to promote your side hustle and advertise its services (and to offer ecommerce if that’s what your business involves).

Other software you may find useful and necessary includes design software and email marketing software. Thankfully, business software is our specialty. When preparing to run your side business, consider the following programs, each of which Merchant Maverick has tested and reviewed for business suitability.

• Wave: Cloud-based software for accounting, expenses, and invoices — the base software is free, while the payroll, payment processing, and bookkeeping components are paid services
• QuickBooks Online: Cloud-based accounting software with payroll, payment processing, worker’s compensation insurance, and a custom invoice template
• QuickBooks Self-Employed: Cloud-based tax software for freelancers
• Square: App-based software with invoice, mobile POS, inventory, and website creation features
• Weebly: Easy-to-use website builder with ecommerce support — works seamlessly with Square
• Canva: Cloud-based design software — easier to use than Adobe products; doesn’t require much design knowledge
• MailChimp: Cloud-based email marketing software

Step 5: Launch Your Business

This is when all your preparation comes to fruition. This is the time to kick your promotion into overdrive. Get everyone you know to like your Facebook Business page and follow your Instagram account, take your website live, and try to solicit referrals and reviews through all your promotional channels. If you’ve built an email list, use it to promote your launch. If possible, include a coupon or some other promotional tool in your email. Depending on the nature of your business, you could even offer some kind of special membership to your initial customers.

You’ll want to leverage every contact you have in the field and convince them to spread the word about your new project. Additionally, look for online communities to join to gain visibility for your business. Naturally, to be accepted in such a community, you don’t want to just promote your business relentlessly. Establish yourself as someone who is helpful and genuine, not someone just out to make a quick buck!

If there’s any aspect of your business that you don’t feel equipped to take on, delegate the work to an employee (or business partner, or contractor). Focus on where your strengths lie.

Step 6: Prepare for Setbacks

As I said in the introduction, running a successful business — on the side or not — is quite difficult. So much so that the vast majority of new businesses no longer exist after five years. As such, don’t be discouraged if your side hustle doesn’t find immediate success.

It’s quite common to experience cash flow issues with a new side business. Here are a few articles containing helpful information on the subject:

• What Is Cash Flow?
• How To Calculate And Analyze Business Cash Flow
• 10 Strategies To Improve Cash Flow

Step 7: Evaluate & Carry On

At a certain point, it should become easier to see what’s working and what isn’t for your side hustle. Ideally, your “hustle” will grow to the point where you can afford to tell your boss to take their job and shove it (or just politely give your two weeks’ notice). To do that, always be on the lookout for ways your side business can evolve and adapt to modern business realities as you gain a greater understanding of the business world.

Maybe there’s a market you haven’t tapped that you could pursue. Maybe there’s a new product idea you can make real. There will likely be opportunities to take your side business to the next level. Just hold off on quitting your day job until your business cash flow approaches or matches the current income from your day job.

A Side Hustle Is Still A Business

Your side hustle may not be your primary focus. After all, you’ve still got bills to pay and health coverage to maintain, so you don’t want to endanger your day job in the pursuit of a dream. Nonetheless, the same elements that translate to a greater likelihood of business success apply regardless of whether your business is your part-time or full-time endeavor.

Bear in mind that it is entirely possible to launch a side business doing what you love and watch it ultimately grow into something bigger. You don’t need to be some annoying Silicon Valley whiz kid rolling in VC cash to build a successful company. Just keep these tips in mind, and you never know — your side hustle just might turn into a thriving company that actually does give you the freedom to quit your day job. And if it fails, well, at least you kept your day job, giving you a financial base from which to give entrepreneurship another try. Plenty of successful entrepreneurs have had businesses fail, so don’t get discouraged if things go south.

Now get out there and hustle! Here are some ideas to get started.

Square is a great way to accept credit cards for a side hustle

Reader	eCommerce	Retail	Food Service
Free App & Reader	Square eCommerce	Square for Retail	Square for Restaurants
Get Started	Get Started	Get Started	Get Started
Free, general-purpose POS software and reader for iOS and Android	Easy integration with popular platforms plus API for customization	Specialized software for more complex retail stores	Specialized software for full-service restaurants
$0/month	$0/month	$60/month	$60/month
Always Free	Always Free	Free Trial	Free Trial