Research shows that 70% of Americans wish they were self-employed, but only about 6% actually are. This statistic shows just how difficult it can be to turn your passion into a sustainable business.
That’s why it often makes sense to begin a side business before committing to quitting your current job. This gives you the chance to build up a solid client base before you jump.
This article will help you figure out how to do that. So keep reading to find seven things you need to consider before starting a side business.
Do you have a hobby or a money-making opportunity?
There’s a difference between a passion and a passion you can make money pursuing. So before diving too deeply into starting your own company, it’s important to understand what you have.
That being said, you can get really creative with this. For example, spending the day at the beach might not seem like a passion you can make money from. But you could be a surf instructor or open up a food stand.
So even if you initially think that you can’t make money doing what you love, push yourself to go a little deeper. You may come up with a solution.
What are the hidden costs of your side business?
Some startup costs are obvious. But others are not.
For example, when you start a side hustle, you’ll need to get a tailored business insurance policy that protects you from various scenarios. It’s critical to understand that while most states legally require insurance, not all insurance is created equal. Business insurance is vital, especially if you don’t cut corners and create a plan specifically designed to your company’s needs. However, it is a cost that many people overlook when calculating their startup expenses.
You might also have hidden costs for things like permits, software, taxes, and more. So it’s important to do some research before you get going.
How are you going to attract new clients?
You’ll also want to make sure that you have a strategy in place for attracting new clients before you spend too much time developing a side business. If you can’t get new clients consistently, then it’ll be difficult for your company to succeed.
One of the best ways to do this is to begin building your own brand on popular social media sites like Instagram, TikTok, and Twitter. For example, you could start posting videos of you making jewelry on TikTok and then direct people to your website when they want to see more.
How will you determine if you’re succeeding or not?
Another thing to consider is what metrics you will look at to determine whether or not you’re successful. Of course, you want to grow your company over time. But what does that mean exactly? How are you going to track it?
It’s a good idea to establish these metrics before getting started. Otherwise, it’s fairly easy to talk yourself into using new metrics to evaluate your success if the old ones don’t look great.
The metrics that matter to you can vary but will often include ones like the percentage of repeat buyers you get and how much traffic you’re generating to your website.
What sets you apart from the competition?
Before starting a side business, you should clearly understand why someone would use that business instead of going with the competition. This is known as your unique value proposition. A business with a unique value proposition is likely to succeed.
There are lots of different ways that you can establish your own unique value proposition. For example, 90% of Americans use customer service as a factor to determine whether they’re going to do business with a company or not. So you could develop a reputation as the brand that offers the best service.
Or maybe you want to establish a niche as a food service that offers healthy meal delivery at an affordable price point. Again, it’s all up to you; just make sure you can clearly articulate what sets you apart.
Will you violate any legal agreements with your current company?
Some people dream of starting a side business that does what their current company does but better.
However, this will often go against your employment contract, as most modern contracts have non-compete agreements written into them. These prevent you from working for a similar business in the same area, which could include your side hustle.
Your employment contract may have other provisions in it as well that impact what you can do as an entrepreneur. So be sure to take a look over your contract before you get started.
Can you get some extra flexibility from your employer?
Finally, it’s also worth figuring out how you’re going to make time for your new business. One option is to try and get more flexibility from your employer.
That might mean allowing you to work from home some days, go part-time, or change the hours that you spend in the office.