Do you need a side hustle to earn extra cash? Want to know how to start a side hustle? There are several areas to pay attention to when trying to make extra money, and if you aren’t sure what those are, keep reading. The answers can make or break your efforts to make more money.
There are plenty of blogs and magazines offering advice on specific types of side gigs and a lot of those involve going into business for yourself. Consider what Enterprise magazine advises: selling goods on eBay, marketing yourself as a social media manager for small companies, tutoring over Skype, and much more.
But what is the one thing that many of those side gig suggestions have in common? Skill sets that are unique to that business model. If you don’t already possess the skills to take a part-time job as a personal chef, for example, starting a business that needs those skills could be problematic. This leads us to Step One of starting a side hustle.
Evaluate Your Current Skill Sets
It’s most efficient to start a side hustle that requires no additional training or learning on your part-except of course for learning the skills it takes to manage a side hustle.
If your skills lend themselves to becoming a personal chef or a small business social media manager, you’re well on your way to deciding if those side gigs are a one-way ticket to more financial freedom or more additional stress and worry. Sometimes it’s both. Sometimes it’s neither. For those who have these skills or are well on their way, such choices can be made in an informed way.
How to evaluate your skills? Make a list of the things you are good at whether they are job-related or not.
These skills can include putting people at ease with small talk, being good at drawing or painting, knowing how to de-escalate tense situations, the ability to do money-related math calculations in your head, knowing how to properly value vintage or antique items, good fashion sense, the list goes on and on.
Note how none of those things directly ties to cashing a paycheck, but they can be important skills to have in a new business depending on what you choose.
Decide If You Want Your Side Hustle To Be Solo, A Partnership, Or As An Employee
Some people aren’t comfortable being their own boss. But it’s easy to mistake side gigs as being strictly self-employment opportunities. Fortunately, there are plenty of side hustles you can do that don’t involve starting your own business.
Consider the wedding photographer or the professional DJ; many of these people are working side hustles and while some of them have their own companies, many more are working for other self-employed people who need the extra help.
Certain kinds of side hustles such as coding, photography, videography, DJ work, or video editing can be quite lucrative. But the advantage here usually comes if your availability is flexible and you have a resume and portfolio that shows off your skills. You can also create such a portfolio if you haven’t got one already. Alternatively, you could try your hand at creating a white label sportsbook if you’re tech-savvy. If you have a spare few moments on your morning commute or in the evening on the sofa, creating a sportsbook could ensure a guaranteed passive income, so once you have it up and running, the rest will run itself!
Check Out Your Local Area To See Who Else Is Moonlighting or Earning Side Income
You might be surprised to learn that certain types of work in your area are popular for extra income. Check your local Craigslist listings to see how many dog walker gigs, non-profit social media work, delivery service options, or creative opportunities are happening in your zip code.
You might not think a resource such as Craigslist is going to tell you much at first. However, combining your research with local classified ads, city-specific job sites, and related resources will show you a bigger picture.
Job review sites such as Glassdoor.com are great places to review possible side gig opportunities if you are interested in joining a team rather than doing it alone.
Before You Consider Diving Into a New Side Hustle, Talk To A Tax Expert
All the above advice aside, the most important thing to do BEFORE starting a side hustle is to consult a tax prep expert on how your new proposed income must be reported. You should also know how it will affect your income tax bracket, whether you need a city or state business license to do what you’re considering. Don’t forget to ask if it’s possible to get a very rough estimate of how much you can realistically expect to pay extra at income tax time with the added income.
Do not proceed with any plans to start a small business or earn extra money if you do not fully understand your tax rights and responsibilities. Mistakes in this area can cost you thousands of dollars you do not need to pay. It’s better to pay a fee to a tax professional for some expert advice and save more money later at tax time.
And while you are at it, the Internal Revenue Service encourages you to do a paycheck checkup to avoid nasty surprises at tax time.
Local Resources You Should Look Into
Do not forget that your local Chamber of Commerce, Small Business Administration, or even state-level small business assistance agencies could offer you a wealth of advice. Look up these agencies online to discuss your plans and any assistance or training that may be available.
If you are a veteran, contact your state-level Division of Veterans Services or Department of Veterans Affairs for more resources aimed specifically at vets who are trying to start small businesses or trying to increase their earning power.
Joe Wallace specializes in personal finance, military affairs, and consumer protection topics. Since 1995, his work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and collects unusual vinyl records, which gives him an excuse to write the vinyl blog Turntabling.net.