There are three main categories of the side hustle; part-time jobs, offering freelance services and product-based home businesses. In today’s post, we are talking about the latter two in which you are self-employed and working under your own direction.
Self-employment comes with a lot of freedom which is why most side hustlers go this route. You want to set your own schedule. You can to create a business of value of which you are proud and inspired. The flip side of this coin is that self-employment also comes with a lot of responsibility, which is why you must be equipped with the proper tools to succeed.
Taking the time to create even the simplest business plan can provide you with the necessary direction to get started. The Small Business Administration offers several articles on writing a well-defined business plan. Questions you need to answer:
- What does your business offer?
- What are your rates?
- How will you get paid and when?
- What are your business hours?
- What are your expenses?
- What are your 1-year and 5-year plans?
- Who are your customers?
- Where will you find them?
- How will you market to them?
Tracking Your Income and Expenses
Chances are good you are starting a side hustle to earn extra money. Despite what you may have heard, the IRS wants to know about every penny you have earned regardless of how much. Therefore, you need a good accounting system to track your income and expenses.
The best accounting system for you is likely going to come down to the type of business you are starting, cost and the number of transactions you are completing each month. Here is a breakdown of some of the most popular online accounting and invoicing software available.
- QuickBooks Online: Unlimited invoicing and expense tracking starting at $9.99 per month
- Freshbooks: Invoice one customer per month on the free plan, premium plans start at $19.95 per month
- Harvest: Unlimited invoicing and time tracking starting at $12 per month
Some side hustlers choose to start out with a barebones Excel spreadsheet for income tracking. That’s cool. Just make sure you keep on top of it as it won’t import banking transactions like many of the available online applications.
You have to keep your personal and business finances separate. Period. It will not only help you keep your sanity when tracking your profits, it will also help out substantially should you get audited. We discussed free business bank accounts in this recent post.
Even a one-time meeting with an accountant when starting a new business could prove well worth the investment. Not only can they answer questions like, “Do I need to start a corporation or LLC now?” but they can also advise you as to your projected tax liability and inform you of any local business taxes you will have to pay or licenses you will need. Alternatively, your local SCORE office may be able to provide some free assistance.
Nothing will make your new side business go under faster than not meeting deadlines. But it can be hard to keep everything straight when you are juggling a full-time job and family as well.
Asana offers a free plan that will allow you to track tasks, projects, emails and more. It also has a smartphone app and integrates with several other popular business tools.
If you find yourself unable to complete projects as quickly as possible maybe you are unknowingly getting distracted. RescueTime will monitor your online time and help you identify time leaks.
Juggling two professional lives is hard. Gmail will ensure you are able to answer important emails from anywhere. Google Docs is also a nice addition though you should never conduct side hustle business on your full-time job’s time.
Have you been a successful side hustler? Tell us about your recommended tools in the comments.
P.S. Looking for side hustle ideas? Check out these posts: