This article was last updated on September 5, 2017
For the past 8 years or so, the number of people who have started their own businesses has risen. This is probably due to the fact that starting a business is much easier now than it was 10 or 15 years ago. It can also be a result of the demand for specialized products or services like social media management, coaching or consulting. Whatever the reason, the world is filled with more entrepreneurs than ever before. Many of these entrepreneurs started their businesses while still working a 9-5 job.
I was one of those people who started their business while I was working a full-time job. I had a career in finance, but I had several business ideas that I wanted to pursue. So I took the steps to develop, test, and launch my business idea. It took some time, but several years later I was able to leave my corporate job to run my startup full-time.
If you’re thinking about starting your own side business but are not sure what steps to take, you’re in luck. In this post, we’ll be looking at the critical steps you need to take before you launch your side business. Taking these steps will eliminate a lot of the trouble most entrepreneurs will inevitably face.
Decide if You Want a Side Business or a Side Hustle
One of the first things you should do before starting a side business is deciding whether you actually want to start a side business or just have a side hustle to make some extra cash.
It seems as the though the “side hustle” is the thing to do these days. Most likely spurred on by the “gig economy”, side hustling has become a way to earn extra money while working a full-time job. Companies such as Fiverr, Uber and Airbnb have made it possible for anyone to make some extra cash.
But people often mistake side hustling for starting a business. Even though they may seem like the same thing, there are a few key differences you need to understand before you take the leap and start a side business. Side hustling is great for bettering your lifestyle by giving you some extra spending money. With that cash, you can take a weekend trip, pay off some debts, or just save for a big purchase. Most people take on a side hustle if they have no intention of leaving their job.
However, with a side business, you can have some extra cash as well as have the upside possibility that the business you created will grow and expand. With that expansion, you have the choice of whether to stay in your job or leave to run the business full-time. Side businesses usually start because a person has an idea, skillset or talent that they can leverage to generate income.
Another important thing to keep in mind is that with gig economy side hustles, you are at the mercy of the website or company that is helping you make money. Many people use Uber as a side hustle. Which is great! However, Uber is ultimately in control of how much you can make and can change the payment structure at any time.
In fact, they have done that several times in the past.
In January 2016, Uber drivers were upset when the company announced that it was slashing its fares from approximately $1.80 to $.65 in some cities. Many complained of not being able to make a living driving for Uber because of the changes.
One of the last things you have to consider is how much time and energy you want to invest into your side business. Is it something you want to do when it is convenient or do you plan on dedicating long hours?
Take a good look at both options and decide if you are more comfortable with the idea of side hustling or if you want to take the plunge into the world of entrepreneurship.
Assess Your Strengths
Running a business, even a side business, takes work. It also takes talent, commitment and a set of necessary skills. That’s why it is important that you assess yourself to make sure you are up to the task. You may have the talent to run your side business but you may lack the expertise to design a logo or build a website.
So, what happens if you realize you don’t have all of the skills needed to run your side business? Does that mean you should bail on the idea? Not at all. The good news is that skills can be developed with time and practice. Other skills can be outsourced to freelancers using sites like Fiverr or Upwork.
Create a Clear Plan with Deadlines
If you have a goal of starting your own business it is important to create a plan and set a date for that goal. Otherwise, it is just a dream. Like with any goal, the better the plan, the more likely the goal will be accomplished. Before you take the journey into entrepreneurship, you need to map out what steps need to be taken and assign deadlines to those steps.
For example, I have a friend who has wanted to start a personal training business for years. He understands the steps to take in order to make that happen. He knows he needs to get certified, get his business license, get business cards, set up an online presence on social media, etc.
The problem arises when I ask him when all of those things are going to happen. He often pushes them into the future or doesn’t have any idea when they are going to get done. This habit of procrastination is a bad one to have if he wants to run his business successfully.
Many people who want to start a side business have the same issue. Setting a clear plan and definitive deadlines will help keep you focused and help move things along.
Make Sure It’s Worth Your Time
In the startup and business world, there are many reasons why a business could fail. One of the obvious ones is the lack of money. This could mean a lack of money to keep the business running. Or it could be a lack of profits that makes the whole business not worth doing.
For example, you may want to start a service business like tutoring or coaching which doesn’t take much money to start. You still have to make sure that the money you make is worth your time. It may feel good that someone as written you a $50 check for an hour and a half tutoring lesson, but you have to take into account drive time, gas and sacrificing time with friends and family.
It’s important to assess everything before you start your side business in order to make sure it is worth your time.
Validate Your Idea
Validating an idea is just a fancy term for testing to see if you can make money. Most business ideas sound good to the person who came up with them. But just because it sounds like a good idea, doesn’t mean anyone wants to pay for it.
There are a number of ways to validate an idea. One of the best ways is to get feedback from friends and family and then ask them to buy. Some of your friends and family may tell you your idea will work, but they could just be trying to spare your feelings.
It is one thing for the people close to you to tell you that your business idea is great, but it is another thing for them to reach into their wallets and pay for what you have to offer. If enough people actually pay you for your product idea or service, you may have a viable business on your hands.
Set Work Hours
The last thing you want to do is decide when you are going to work. One of the biggest mistakes new entrepreneurs make is not treating it like a business. They treat it more like a hobby that they hope will pay them. In order for your side business to succeed you will need to treat it like a real business. That means you will have to choose your working hours.
One of the benefits of working for an employer is they tell you went to show up and when to leave. That may not seem like a good thing to you, but when you run a business, you have to figure out when the best time is to work.
When I was working in the finance, I started my side business by waking up at 3 am and working for 3 hours each day. That’s right, 3 am. I learned that I am much more productive early in the morning so I took advantage of that.
You may need to work on your side business at night after you get home from work. Or perhaps you will dedicate 4 hours every weekend to grow your business. The time you choose to work on the business doesn’t matter. What matters is that you block out time to invest into the business. It will be a lot easier on you and your family if you decided when that time will be before you launch.