Doing something on the side is appealing to many. Here’s how to make it work.
By day, Robin O’Neal Smith is a chief information officer for a local school district. After hours, she is a ghostwriter and editor for bloggers. Smith now earns about $1,000 in extra cash every month from the side gig she launched two years ago.
“I had started a business to do social-media management but there seemed to be a much higher demand for blog posts than Facebook and Twitter,” said Smith, 56, who lives in Pennsylvania in the US. “So I started with one client and quickly added more.”
Her earning potential from blogging could be greater if she had more time. “There are only so many hours in a day that I can write since I still have a full-time job,” she said. “I have hired some help, and once they are fully trained, I will take a few more clients.”
In the new “gig” economy, taking on work on the side has never been easier. In the US, 12% of employees with full-time jobs also freelance, according to the Staples Advantage Workplace Index. In the UK, there are estimated to be about 1.88 million freelancers, and in the EU labour market, the number of freelancers grew by 45% between 2004 and 2013.
Although not all side businesses would be considered freelance, and some freelancers work at it full time, the numbers are a good indication that more and more of us are striking out on their own.
What it’s going to take :
You’ll need to be self-motivated, a good multitasker and have some free time. “Starting any business, whether it’s a multimillion-dollar company or just selling hats on Etsy, takes a lot of work,” said Sam McIntire, founder of DeskBright, an online learning platform for business skills in the US.
“You’re going to have to design the hats, figure out the platform, figure out the marketing,” he said. “There’s a significant time investment.” If you are already pressed to the limits of your “busyness” quotient, it may not be the right time for your side venture.
You should also be asking yourself why you’re starting a business. Is it just to make extra cash? Is it because you have a passion and you want to share it with the world? Are you starting up a business that you hope will become your full-time job at some point?
“Once you have that, then you can start building,” said Judith Lukomski, founder of Transitions Today, a performance consulting company in California.
How long to prepare :
It depends on what kind of business you’re planning on launching. “For some, it’s as simple as getting a website, registering with HMRC and taking out some insurance before you can get going,” said Jason Kitcat, micro-business ambassador at Crunch, an online accounting company in the UK. “Others will need more paperwork, planning and preparation.”
You’ll need long enough to create at least a rough business plan, research product pricing, and think about whom you’re targeting and how you’re going to reach them. That said, you don’t necessarily have to be in perfect shape to get going.
“I thought I had to learn everything I could about social media before I started working for someone,” Smith said. “But the whole time I had marketable skills in writing and editing. Things will always be changing, so just start.”
Do it now :
Make sure there’s a buyer for it. “People don’t do enough research into whether there’s actually a viable, sustainable market for what they’re planning to sell, whether products or services,” said Robert Gerrish, founder of Australia’s Flying Solo, a micro-business community, and co-author of a book by the same name. “Friends and family often say, ‘Great idea,’ but too often insufficient time is spent in this crucial planning stage.”
There are many means to validate a market for a product. You can offer presales or pre-orders. You can put up a splash page on a website and collect email addresses. “There are a lot of ways to gauge customer interest before sinking all that time into it,” McIntire said.
Design your buyer. Who is the person who will buy your product? “One of the exercises that’s helpful is to write down your key client, and get really specific,” Lukomski said. “It’s a person named Chris, and you give that person a life. Then you can target that person. It’s a little bit more than saying, ‘I’m going to target women from 35 to 55.’”
Check your employment contract. If you already have a full-time job, you don’t want to jeopardise your spot by violating any fine print. “You may find a clause that bans evening and weekend work,” Kitcat said. “Why not raise any questions you might have with HR? They will often deal with enquiries confidentially.” Check also for a non-compete if you’re intending to freelance in the same industry you’re working in.
Get the work. “I worried a lot about how I would invoice, pay freelancers in my employ and set up my website,” said Tess Frame, who started her own website and business-content company. “What I should have been focusing on was getting more clients. You don’t need a website if you don’t actually have clients.”
Don’t goof around. “Structure your time properly and you’ll see huge leaps in your productivity,” Kitcat said. “Ask yourself what you want to achieve over the next 60 days or construct a week-by-week checklist of objectives.” This will help keep you on track and stop you from endlessly browsing social media when you should be working.
Do it later :
Pace yourself. Don’t forget that you still have a day job. “Don’t overpromise and take on too many clients at once, or you may struggle to balance competing demands,” Kitcat said. “Be open with clients about your other commitments so that they aren’t frustrated when you can’t serve them during office hours.”
Get ready for taxes. Making money? Great! You’ll probably owe taxes on it. In the UK, “you’ll need to let HMRC know if you’re starting a business so you can file your Self Assessment and pay the right tax on your income,” Kitcat said. “It’s also a legal requirement once you start earning money from your business.” Consult a tax professional — or do some online research at a site like FreelancersUnion.org in the US or Crunch.co.uk in the UK — for more information.
Be realistic. Don’t expect a booming business overnight. “Too many people have unrealistic expectations of how quickly things will develop,” Gerrish said. “It often takes much longer.”
Do it smarter :
Don’t forget to enjoy yourself. Starting a side venture is about more than money. “The rewards are tremendous,” McIntire said. “Having autonomy, building something, having ownership around your own project — those are all things that are tremendously motivating.”
This article is written by Kate Ashford & originally appeared in BBC.