Due to COVID-19, one in five of us is considering starting a side hustle or passion project to earn a little extra at the moment. But this is an important decision that needs planning and consideration. Here are three things to think about before getting started.
Got a great idea for a business? Then it’s time to work out if there’s a market for it.
Informally, do a sense check with your network. Check with friends and family about whether they think your idea answers a need or want, taking their feedback on board when setting up your new venture.
It’s also important to work out your target market along with whether they’d pay for your product and service (and how much they’d pay for it).
Look into your competitors to see if your idea stacks up, and if there are lots of similar products in the market, identify your point of difference.
A side hustle is just that – something that may generate extra cash in addition to the usual way you earn income. So, unless you have the means to do so, be very careful about completely leaving gainful employment to pursue a business opportunity unless you are certain it can support you and your family.
This requires a business plan.
If you have a business idea or even a fledgling business, take the time to prepare a formal business plan. This starts with a check of the Australian Bureau of Statistics’ (ABS) data about whether earnings in your potential industry are rising or falling. It publishes monthly industry updates that are important to consider. Your industry will also have an association that represents its members and it’s also worth checking out its figures. It’s also likely to have specialist resources and even support groups for new members that may be worthwhile joining.
Once you have the basic data, prepare a one-page business plan. This does not need to be complex. Simply map out what you intend to do in the business over the next month and quarter which could include:
When you’re starting a side hustle, you’ll need to work out a balance between your ‘real job’ and your new endeavour. Because of this, it’s best to schedule in some time on weekends or after work, so that it doesn’t interfere with your 9-5.
It might also be a good idea to share your plans with your employer, so that they’re confident in your commitment to your current role. You can do this by clearly communicating the steps you will take to delineate the two, such as avoiding taking calls or answering emails during work hours.
If you do need to attend to your new business during time you should be spending on your job, if at all possible, do this during breaks. Also check your employment contract to ensure you’re not violating any terms of your employment by starting a side hustle.
Once your new business is up and running, you may even consider cutting down the hours or number of days you work at your other job to effect a smooth transition if you eventually intend on making your new business your main job.
Starting your own business can be rewarding financially and in many other ways. So, consider these steps as you start to position your side hustle for success down the track.
The article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714, and is current as at 8 July 2020. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
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