When we first start out in business, we need money, right? Rarely does a new business or 9-to-5 job provide enough of it. One way to make more money is through a side business.
Side gigs offer us another way, not as intense as full-blown entrepreneurship, but a way to earn money and have some fun along the way. With side hustles, we can turn the entrepreneurial quest from a constant grind into an outlet for our true selves.
Not only do we improve our financial security, but we often discover we are happier and more satisfied because of our side-business ventures.
With that in mind, here are five reasons why every entrepreneur should start a side business.
1. You can test new ideas.
You’ve heard it before: Most startups in America fail. In fact, 80 to 90 percent of small businesses never make it past their second year in business. There’s a silver lining, though. The small business failure rate is declining.
New technology is making it easier than ever to test a new business idea. Simply create a landing page, send traffic to the page and see if people click the "buy" button. It’s that simple.
A common thread among business failures is a failure to define their unique selling proposition (USP) -- the core message that tells customers, “We’re different because. . . ” What sounds like a great idea may be a total flop in the marketplace.
When you test your side business USP, you can quickly gauge demand for the product or service. If none exists, you have the freedom and flexibility to change the offer before diving head-first into a new venture.
So long as you’re making enough from your core business to cover your lifestyle expenses, you’ll be free to play around a bit, experimenting with what works for your side business.
2. Stoke your curiosity.
Starting a new business is exciting. Flush with big ideas and grand ambitions, entrepreneurs often set out with stars in their eyes. But as our workload increases, our stress goes up and up. We tend to lose site of this vision and seek an escape.
A recent report by ecommerce company Selz showed that more than 20 percent of business owners surveyed said they founded those businesses to “escape the grind.” Rather than wear yourself out trying to “escape,” why not set your sights on adding something -- a new business venture that may create such an escape right now. The nice part about a side business is that you have more freedom to follow your curiosity and passion.
I usually avoid recommending that new entrepreneurs “follow their passion” when starting their first business; but for side hustles, just the opposite is true. You want passion. You need it!
Doing work you’re genuinely passionate about isn’t work. It’s play. Your love of the work is a fountain of energy and daily insights.
When it comes to starting a second business, you have the luxury of waiting for ideas that truly inspire you. If an idea doesn’t make you say hell, yeah!, then wait for one that does.
3. It’s less risky.
If you start a side hustle while maintaining focus on your core business, and it fails, you haven’t lost anything significant. You still have your main business to fall back on; and, hopefully, you walk away with a few valuable lessons. Before starting a second business, consider the following to help hedge your risk:
- How much time will you need to invest, and can you afford this without jeopardizing your other business interest?
- What resources, skills and availability are needed to make the new venture successful?
- Develop a plan to profitability. Getting to profitable will help you maintain the initial passion.
A good rule of thumb is, if things are flowing smoothly in your current business, then it’s a good time to start a side business.
Whatever you decide to do, keep in mind that each time you invest either your time and/or money into a new business, you owe it to yourself to move cautiously and consider all possibilities before you make a final decision.
4. Leverage existing technology.
The Selz study cited above found that technology is the key enabler to starting a side business. Low-cost technology makes it easier than ever to start a new business today.
With sites like Amazon and Etsy, you have immediate access to potential customers around the world. In just a matter of weeks, you can take a product from the idea phase to market.
Other free web-based apps like PayPal, MailChimp, Google Docs and Slack have dramatically lowered the cost of starting and running a new business. With so many technology options, it’s easier than ever to start a side business.
5. Use your businesses to support each other.
When you start a second business, you'll find that it’s in your best interest if your businesses support each other. The huge time and money investment you’ve already made in your core business can be used for your side business; that's not only smart, it may be necessary for success.
A prominent example of business overlap is Elon Musk’s financial handling of Tesla, SpaceX and SolarCity. Musk owns a trust that has shares in all three companies, and buys shares in each. There’s no denying that Musk’s financial strategy here is paying off.
When it comes to starting a side business, your ambitions may not be so grand, but the point remains: There are benefits to sharing resources between and among businesses.
I do this myself, using similar content marketing systems across all my businesses to lower marketing costs.
What are you waiting for? Never before has it been this easy to validate, launch and grow a new business, nor less risky. You don’t need to be making a lot of money, just a passion for the idea and a lot of hard work.
A side business can diversify your income, support your existing business and involve work you’re truly passionate about. So quit waiting and turn that side business into a reality.