The Side Hustle sounds like the title of a new dance or an old movie, but it’s actually part of the growing gig economy in the U.S. When a full-time job isn’t enough to pay the bills, more and more workers will get a second traditional job to supplement their income. But what if you can create a business on the side, your own business, an asset that offers not only a second stream of income but growth potential? Create a business that doesn’t take up too much time so you can keep your day job, but does require determination and a willingness to work hard?
Becoming The Norm
“I’ve always been a fan of quirky, one-of-a-kind gifts. But when I started making and selling them online on Etsy two years ago as a creative outlet, I never imagined my hobby would blossom into a reliable stream of passive income,” O’Dell told Grow.
An entrepreneur at heart, O’Dell’s day job is her own marketing and PR agency. She started her side hustle by opening up a store on Etsy, Ideas By Arianna, and putting up for sale a single mug with a cheeky design. It had the text, “You’re my #1 Bitch” next to a picture of a dog. It sold – and O’Dell was sold!
“Twelve years ago I wanted to sell mugs like this but you always had to order so many and it was expensive but now you can get whatever quantity you want and sell from wherever – it’s a good time to be alive.”
Getting the Help You Need
O’Dell started initially making items by hand but quickly determined that there was a more effective way to produce items with her designs on them – print-on-demand companies that ship on your behalf – thus avoiding turning her apartment into an inventory warehouse. O’Dell used graphic designers she found online through marketplaces like Fiverr and Upwork, who helped bring her designs to life.
“With partners in place, I hit the ground running, creating everything from funny doormats to wine labels,” O’Dell said. “I made about $5000-$6000 my first year. And it’s grown every year since.”
O’Dell’s Top 5
It wasn’t always a smooth ride. Here are five recommendations from O’Dell on starting and growing a successful side hustle.
1 – Just do it! A lot of people want to start a side hustle, but they’re worried they don’t have the money. O’Dell says, “It’s inexpensive these days, especially if you allow yourself to outsource with partners to help you along the way.” Even if it is inexpensive to start a side hustle, having a savings built up beforehand will ease your mind by taking the strain off your wallet. According to a 2019 GOBankingRates survey, about 69% of Americans have less than $1,000 in their savings account. Even with stimulus checks, only 39% of American could afford to pay a surprise $1,000 bill with savings, according to Bankrate’s January 2021 Financial Security Index. That is not a big buffer, so consider signing up for automated savings, an amount you determine that will automatically be transferred from your checking account into a savings account. Pre-sell your item or service so you can anticipate costs. And work with an accountant or CPA to ensure you maximize business deductions and minimize taxes. An accountant can help with many aspects of your side hustle’s financials.
2 – Get your product out there! O’Dell, “Ideas don’t matter all that much. If you like it, someone else will also like it. You will be surprised. ” But O’Dell cautions about diving in without doing a break-even analysis in the very beginning. Not doing so cost her hundreds of dollars her first quarter in business. As she shared with Grow, “I forgot to take taxes and Etsy’s seller fees into account.”
3 – Remember, it’s a business! Don’t overlook the financials, especially the cost of things, to make more money from your side hustle. O’Dell says, “I think I made too many designs because I was looking at the creative process and design rather than the business process.” Also, it’s paramount to know the value of what you’re selling, “At first, I sold mugs for $16.99, netting me as little as 50 cents. Now that I understand margins better, I’ve upped my prices 100% — to $33.50 — and people are still buying.”
4 – Don’t waste time! After some initial research O’Dell spends about 30 minutes a day on her side hustle. She said to Grow, “I typically work on my side business first thing in the morning, before I’m distracted or tired from other work, and complete at least one task, like fulfilling an order or implementing a new marketing tactic.” Of course, how much time you spend on your side hustle will vary, depending on what that side hustle is. What’s important, is to stay focused on the tasks you need to do to make money, like marketing and the actual work you need to produce your side hustle, and to not get distracted by unnecessary tasks that don’t generate income. Setting a strict schedule will help keep you on track.
5 – It’s a long-term investment! O’Dell’s been working on her Etsy store for four years, but she’s planning for the long haul, telling Grow: “Next on my list, is learning more about securing licensing deals to get my products into bigger retailers. I’m also slowing down on creating new designs and repurposing old ones instead. If one was really popular on a mug, why not try it on a beach towel? This will help keep my costs low as I look toward the future: My five-year goal is to firm up a long-term pipeline of passive income.”
O’Dell looks to be on the way to achieving her goal. In her first year of business, O’Dell reports revenue of $18,000. That figure jumps to $26,000 for her second year. Not bad for a hobby turned side hustle less than three years ago. O’Dell emphasizes, “The key is to take on something that you like. You’re less likely to burn out if you’re motivated by more than just making money.”
Side Hustle As A Path To Entrepreneurship
The majority of Side Hustlers aren’t getting rich. The typical take-home pay is $500 or more per month. But that amount year after year can pay for a lot of extras. According to the 2020 Side Hustle Report, 48% of workers with a side hustle are doing so to earn extra spending money. Other top financial motivations include paying regular bills, paying off debt, saving for a big purchase or a major goal like their retirement.
The hope for many people is that their hard work will pay off and they can quit their day jobs to run. The 2019 Hiscox Side Hustle To Small Study revealed that 78% of side hustles were transformed into viable businesses.