How to Start a Side Business
Written by: Wilson College • Jan 24, 2024
How to Start a Side Business ¶
People start a side hustle or begin freelancing for several reasons. Maybe they want more money, more control of their schedule, or more creative license in their work. Having a second job, whether it’s a passion project, a long-term career goal, or a source of extra income, can bring many benefits to one’s life and career.
To learn more, check out the infographic below, created by Wilson College Online’s Bachelor of Science in Entrepreneurship program.
Why Start a Side Business? ¶
A side business allows people to earn more money, pursue a passion, or ease into a new career.
Gain Work-Life Balance ¶
The U.S. Census Bureau reports that about 56% of Americans started a business because they wanted a better work-life balance. About 52% of Americans started a business because they wanted more flexible hours.
Develop New Skills ¶
You can learn new skills that can turn into a side business in many ways. You can take free coding courses, watch how-to guides on YouTube, or attend local college classes. People can use the skills that they already have and enjoy to make money. In fact, about 54% of people in America want to cultivate their own ideas through their small business.
Become Financially Stable ¶
Adding another source of income can help make ends meet. A total of 62% of Americans started a small business because they wanted to increase their income.
Be the Boss ¶
In addition to keeping their own hours, business owners can decide what to work on and gain confidence in themselves as leaders and entrepreneurs. About 62% of Americans started a small business because they wanted to be their own boss.
Steps to Starting a Side Business ¶
It takes preparation and hard work to start a side business. Here are five key steps to get started.
Explore Your Interests and Skills ¶
Starting, running, and growing a business takes commitment, so you’ll need an idea that you can pursue long term. Consider pursuing a passion and choosing a hobby to become your job. You may also try several ideas before committing to one. Take stock of your strengths and experiences, and use them to decide what kind of business to create.
Research Your Niche ¶
After you decide on a business, do your research. Your research should include finding potential conflicts of interest with your full-time job, identifying your target customer and audience, and confirming that a need exists for your business. You’ll also want to develop a unique brand by learning what other people in your potential field are doing. Make sure to obtain any necessary certifications or licenses, and find out how to buy materials and products.
Establish Your Business ¶
Create a business plan. Having a document to present to investors, location owners, and wholesalers allows you to gain their confidence. A business plan includes an executive summary, a company description, a background summary, a marketing plan, the business structure, and a financial plan.
You’ll have to structure your business by evaluating your liability and partnerships and choosing a business structure. For example, you may decide to operate your business as a limited liability company (LLC), limited liability partnership (LLP), sole proprietorship, or corporation.
After you’ve made your decision, gather and organize the appropriate paperwork and register your business. Choose a business name, obtain an employer identification number (EIN) from the IRS, and check with your local government office or attorney to file licensing paperwork.
Make Products or Create Portfolio ¶
Whether it’s an online storefront or a portfolio site, a website is crucial. Marketplace websites can help you easily sell products to customers, and a portfolio site can help potential customers see your work. If your side business is selling handmade items, then designate a place to work, create stock, and find places to sell it. If your side business is creating deliverables, then begin finding opportunities, set aside time to complete the work, and continue to improve your portfolio.
This is when you can go back to your research and begin to create relationships with wholesalers, sellers, and others in your industry. They’ll help you establish a schedule for creating products, offer advice, and potentially connect you to future customers.
Market Your Business ¶
As your skills and products improve, you can update your advertising, improve your online storefront, or adjust your business plan to fit your new direction. Additionally, building a brand is crucial. When people trust your brand, you’re more likely to get work. Creating a cohesive brand allows customers to find you easily and recommend your brand to others. As you create more products or work, you can continue to build your portfolio.
5 Common Side Businesses ¶
If you need some inspiration, here are some common side businesses.
Electronic Repair ¶
Smartphones, computers, tablets, and other electronic devices are part of everyday life. In 2022, the electronic and computer repair service market in the U.S. was worth $21.6 billion.
Vending Machines ¶
The U.S. has around 2 million vending machines, and unattended retail sales generated $21.7 billion in 2022. That’s a 12% increase over 2021. Business owners can set their own hours and only work to collect money, restock, or repair.
Activities for Children ¶
Children of all ages are active after school and during the weekends, so providing an activity for them can prove lucrative. Here’s the breakdown according to 2020 census data:
A total of 44% of boys and 35% of girls played sports.
A total of 29% of girls and 24% of boys participated in clubs.
A total of 37% of girls and 27% of boys took lessons, such as extracurricular music, dance, language, and tutoring courses.
Personal Trainer ¶
According to the U.S. Bureau of Labor Statistics (BLS), employment for personal trainers is expected to grow by 14% in the next 10 years. Personal trainers can share videos on social media, grow a client list for one-on-one training, or find a gym where they can teach. Depending on how you want to connect with clients, becoming a personal trainer can be a great way to stay in shape and make some money.
Whether it’s for social media, a print journal, or a university website, copywriting can be a fun, engaging side business. Employment of writers of all kinds is expected to grow by 4% in the next 10 years, and the median annual wage for writers was $73,150 in 2022, according to the BLS. Copywriters can choose how much work they want to take on and set their own hours.
Starting to Build ¶
Starting a side business can create an extra source of income, serve as an avenue for creativity, or allow you to transition to an entirely new career. Many people freelance, take gigs, and start a small business while still keeping their full-time job. If you’re interested in starting a side business, evaluate your interests, skills, and experience. Then, research your potential field, create a business plan, and get started.