Hard workers have options beyond the traditional nine-to-five, pursuing other opportunities for generating supplemental income.
Although official government figures estimate that about 5% of the working population holds numerous jobs, the analysis implies that this percentage is substantially larger. Inflation continues to push more and more Americans into side hustles, but starting one comes with its many challenges.
Here are a few things to know for those looking to find a side hustle to hedge against inflation or just bring in some extra cash.
Paying Tax Is Your Responsibility
Tana Williams, personal finance expert and founder of the online personal finance publication DebtFreeForties, says the essential thing she learned is to set aside a portion of your salary to pay taxes. Knowing you’re covered if you owe money during tax time is reassuring.
If you aren’t, nothing helps that sinking feeling in your stomach when you realize you’ve spent every last dime and now need to find additional money to cover your taxes. Consider the legal and tax implications of your side venture. Register your company, obtain the necessary licenses, and understand your tax obligations.
There Might Not Be a Market Fit
Another potential issue with side hustles, according to Williams, is the question of whether there is a market for your side hustle. You are unlikely to be successful if you are not meeting a need for a group of people. Do your homework before diving into any side hustle to guarantee that people require it. “I tried the handicraft path, and while I enjoyed making things, I didn’t sell enough products to justify my time and effort,” Williams explains.
Your Investment May Not Be Worth It
Start-up costs are something to think through. If you want to start a side hustle that takes a lot of investment upfront, you should reconsider until you’re sure it is worth the investment of time and capital. According to Williams, “While we all want an excuse to buy an at-home 3D laser printer for thousands of dollars unless you have researched and know you can make items that will sell, you should try other easier and less expensive avenues first.”
Another critical thing to remember, according to Lauren Milligan, a successful career coach, is that until you make more than you spend, you have a hobby, not a business. A mistake that people make is spending needlessly.
Lauren shares, “When I first started my career coaching business, I bought shirts with my logo, a gorgeous leather bag, and a magnetic sign for my car. I never wore the shirts, the bag was WAY too expensive, and I only got one call from the magnetic sign – a grumpy old man telling me I drove too fast through his neighborhood.”
A Side Hustle Isn’t Passive
Jeff Neal, who’s been side hustling for over seven years selling live crickets to local pet shops and zoos, comments that you need to commit to a lot of “off-hours” for your side job to be profitable. Side hustles are often mistakenly referred to as passive, which Neal admits is false. “There’s a lot of planning, time commitment, and sacrifice of free time,” Neal says.
Your Earnings May Be Underwhelming
Be realistic about the potential earnings from your side hustle. While some may be able to earn a full-time income, for others, it may only be a supplemental income. Having a clear financial plan is vital, including setting realistic earnings goals and tracking expenses, according to Jessica Bane Thompson, the Director of Business Operations at GoPromotional. Likely, your side hustle won’t generate significant income in the beginning, so it’s essential to have a financial safety net in place. Avoid quitting your day job too soon, and find ways to balance both.
No One-Size-Fit-All
Lauzums Ray, the owner of Poggers, highlights the importance of flexibility, noting that the path of a side hustle can be full of surprises. “You should be ready to adjust to new circumstances and constantly fine-tune your approach,” He says, “In my case, I had to modify business plans several times to remain up-to-date and profitable.”
Have a Profit Mindset
Veronica Hanson, a remote income coach who aids women in making significant lifestyle shifts, advises that those embarking on a side hustle do so with a view to making extra money first and foremost. Many people, she has found, go on the path of pursuing a side hustle because they have already decided that this is the right path for them. They then perceive everyone’s negativity or questions, including that of their partner or family, as being a hater.
She concedes that while plenty of negativity is directed at those who choose to pursue a side hustle, many waste-of-time-hustles should be left unattempted. “I end up working with so many women who are upset that their partner is not supportive, but they have not earned any money,” she says. She advises focusing on generating income rather than creating a list of thirty tasks to complete before making a profit.
It’s All About Probabilities
Hugo Moreira, the owner of Finance Stu, says that his biggest challenge was realizing a side hustle was full of probabilities.
“You’re not owed anything for your effort,” he says, “Everything you do is just increasing your chances of success, but don’t think that you’re rewarded based on the hours you put in. That happens maybe in your 9-5 job, but with entrepreneurship? Success is far from linear.”
Undoubtedly, the more work you put in, your chances of success are higher. But failure will always be a possibility.
This article was produced and syndicated by Wealth of Geeks.
