There’s been a lot of chat recently about “The Great Resignation” and what it means for the workforce. But ditching your 9-5 for greener pastures isn’t the only option.
In fact, more of us are picking up a side hustle in 2022, alongside our main gig. According to recent research by ING, nearly half of Australians (48%) have either started or plan to start a small business on the side of their main form of employment.
Whether you sell second-hand clothes online or work as a freelance writer, there are plenty of ways to turn your passion and hobbies into a viable source of income.
With the new financial year fast approaching, you might be considering adding an extra stream of income by starting a side hustle. So, we’re here to share five top tips for starting your own side business and the key steps you need to take to make sure your side hustle is profitable, enjoyable and sustainable.
Figure out your business model
First up, you need to wrap your head around how your side hustle is going to help you earn money. While your passion and hobbies are a great place to start when launching a side hustle, you’ll need to have a plan in place to ensure you’re able to earn a viable income from it, too.
Once you’ve narrowed down your side hustle to one specific interest or skill, it’s time to consider the best way to package up your offering.
There are a few key ways you can earn an income from a side hustle, including:
- Designing products and selling them through eCommerce stores or physical shopfronts.
- Working as a freelancer and offering your skills as a service provider.
- Working as a contractor in the gig economy (such as becoming an Uber driver after your normal work hours).
During this planning phase, you also need to figure out how you’re going to price your products and services. Will you be charging an hourly or project rate as a freelancer? How much of a profit margin will you have when selling your products?
Take a peek at what your competitors or other freelancers are charging for their products and services to get an idea of what could be the right rates to set.
The good news is that generating a profit isn’t essential when first starting a side hustle, as you’ll still have your main source of income keeping you afloat. However, if you plan to grow your side hustle into your main gig, it’s important to have a plan in place for when it’s time to step into your business full time.
A good way to know when you’re ready to take the plunge is if your side hustle is generating as much, if not more, income than your main form of employment.
Get to know your ideal customers or clients
Now you’ve got your business idea and structure down pat, it’s time to turn your attention to the people that will be buying your products and services: your customers.
No matter how small your side hustle might be, getting a clear idea of who you’re trying to reach and attract is key to your success. That means you’ll need to spend some time mapping out your ideal customers, their needs, their motivations and what will make them choose you.
To help you create your own customer personas (a.k.a. Fictional characters that represent your ideal customers), here are a few things to consider:
- Who is your ideal customer? Think about their demographics such as age, gender, location, occupation and income bracket.
- What problems can you help your ideal customer solve? For example, a copywriter might be able to help small business owners communicate what they do with confidence and help them boost new client enquiries.
- What goals can you help your ideal customer achieve? Whether that’s saving time or money, hitting a fitness milestone or even helping them complete a task more efficiently, think about what value and solutions your side hustle can provide for them.
- Why are you the best solution for your ideal customer? This is all about drilling into your competitive advantage and what makes you stand out! Get really clear about the benefits you provide, the problems you solve and how this is unique from your competitors.
Taking the time to understand your ideal customer is what will help you position yourself as a leader in your side hustle industry and make it easier for you to market and promote your business to this target market.
Assess your capacity
Here’s the thing about starting a side hustle: there are only so many hours in the day. With a full-time job to take into consideration, you need to be honest and realistic about how much time you have to dedicate to your side hustle.
While working after hours and on weekends is possible, it may cause you to become overworked and burnt out in the long term.
So, it could be worth considering if you can drop your main job down to a part-time role, and dedicate one or two days a week to your side hustle. If not, make sure to manage your own expectations about how much you can realistically achieve each week on your side hustle.
Get the financials sorted
Now it’s time for the important bit: getting your side hustle financials sorted. If there’s one thing you do from day one, make it this: set up separate bank accounts for your side hustle income and expenses.
By separating your personal and side hustle finances, you’ll have a much easier time preparing for your tax return. That’s because you’ll easily be able to see how much income you’ve earned from your side hustle as well as any expenses or tax deductions you might be able to claim.
Plus, be sure to get all the proper admin in place to keep your side hustle running smoothly, including:
- Register as a sole trader and secure your own Australian business number (ABN).
- Ensure you register for GST (the Goods and Services Tax) if your annual GST turnover is $75,000 or more.
- Consider signing up for accounting software (like Xero) to help automate your finances and easily keep track of your income and expenses.
Build your digital presence
Last, but certainly not least, is the final part of building your side hustle: marketing your business online. Whether you plan to have a physical storefront or operate entirely online, it’s essential to make your business visible online.
Not sure where to start? Here are a few key steps to add to your to-do list:
- Create a website: you can easily set up a simple website through platforms like Squarespace, WordPress and Wix, and showcase your products and services online.
- Set up a social media presence: social media marketing is a fantastic free tool to build brand awareness and introduce your side hustle to new customers. If you’re a service provider, make sure to set up an active LinkedIn presence. However, if you’re planning to sell products, an Instagram and Facebook page is your best bet.
- Create a Google Business Profile: if you’ve got a physical shopfront, make sure to create a Google location listing that enables you to connect with customers across Google Search and Maps. You can easily set opening hours, and provide directions and contact details to make it easy for customers to get in touch with you.
And that’s a wrap! When it comes to launching a side hustle this new financial year, the best thing you can do is to plan and prepare ahead of time. By setting the right rates, figuring out who you’re trying to reach and getting the finances and admin sorted, you’ll be best placed to generate a stable source of income from a side hustle.
