Side hustle is more about the mindset rather than the money. If you get the mindset correct in the starting when you are building your side hustle then the money flows automatically. You need not worry about the money part but focus more on the learning part.
So, rather than chasing money with your side hustle you need to start side hustle by forming a correct mindset and skills.
Mindset to Start a Side Hustle
1. Saving Money Mindset- Saving money is important whatever is your present income because you can start a side hustle only with whatever extra money that you have saved.
Without saving you will not be able to invest even a minimal amount in starting your side hustle. For example, if you have put up a blog then you need at least Rs. 5000 to purchase a domain and hosting. So saving money mindset is important because it is where you get the money (if required) to start a side hustle.
2. Taking Risk - Taking a non life-threatening risk, gives you the courage to explore new areas. This is where you step out of your comfort zone and try to do something creative and useful that you have never done before.
For example, you can take the risk of starting a blog, a Youtube channel, running Facebook campaigns.
3. Spotting Opportunities - You need to grab whatever opportunity that comes to your way and need not wait for the correct time. No matter how small the opportunity is it gives you the way to get started.
So, instead of wasting time, you are already on the action track. The one opportunity that you have will lead you to another.
For example, if you have the time and opportunity to teach or consult someone in need then you can grab that opportunity to start your side hustle for online tutoring or taking business consulting.
People start with the side hustle and then leave in between because they have a job and other priorities in life. They start a side hustle just for fun and then they find it hard to continue the side hustle along with their existing commitments.
On the other side, there are people who take side hustle very seriously with the ultimate aim to earn money. The misconception is that people think that they need to just build a blog or a Youtube channel and the money will start pouring in.
But, the fact that you need to understand is that the side hustle takes time to build and even more efforts and skills to make money out of it. You need to devote time and energy to get the hustle up and running to the point that it starts earning for you.
In the initial phase, you should focus more on the learning part than the earning money. You should learn skills while building your side hustle to such a level that you are not worried about money.
It is like building expertise in a skill that will take care of your finances. For example, if you have started a side hustle to sell your writing services on the Fiverr platform.
Then you should focus on building silks like creating good and engaging content, learn how to find & approach clients and pick up the negotiation skills.
In the initial phase, your earnings may be small but if you persist then you will eventually learn the skills and will be able to have a pipeline of clients who are ready to pay you top dollars. A time will come when your side hustle will take care of your expenses.
Ingredients of Right Side Hustle
#1. Skill that you can bank on
First, you need to explore your existing skills and find out what all skills you already have. The skills can be anything, right from coding, software programming, management skills, saving money, negotiation skills, writing, reading or it can even be coaching skills.
The questions below can help you identify your skills:
What are you good at?
Things that you have learned by experience
Jobs that you do at your office
Things on which your friends ask for your advice.
If you find yourself short of skills then you can spend some time and money taking online courses to build your skills.
You can start with your existing skills & future skills. Future skills mean - a particular skill that you want to build or develop in the coming days.
#2. Market that is willing to pay
Next, you need to have someone (a buyer) to buy that skill, i.e. a market where people are willing to pay for your skills. This ensures that there is an actual need for that skill in the real world.
Because you will not want to start a side hustle on skills like watching birds that would not pay you any money. It is important that people find your skill to be relevant in solving their problems and are ready to pay you money in exchange for your skill.
For example, if you have writing skills or logo design skill and you start a side hustle then there are blogs and companies who are willing to buy your content or design i.e you have a market for your skill.
#3. Enjoy doing
The last stuff for building a right side hustle is one where you enjoy doing the stuff. The term can be expressed as having a passion or an interest in the side hustle that you are building.
For example, when I say that my side hustle is affiliate marketing and blogging that is because I enjoy doing it. I do not feel tired or exhausted even if I work for hours building a blog. Rather I feel satisfied and happy.
You might be a master in a skill but you may not enjoy the skill. For building a side hustle you need to search for skills that you enjoy doing.
After knowing all the components, you need to find the intersection area where you have skills + market + enjoyment. That intersection is your side hustle.
Start with finding your skills that you enjoy doing and then out of those skills look for skills that have a market associated with it.
This means moving from the region of intersection of skill + enjoy circle to the centre core area which also has an intersection of market elements.
Let us understand this with a help of an example, Suppose a person has following skills
- Programming
- Management
- Saving money
- Optimizing
- Tutoring
- Investing
- Acting
- Digital marketing
Out of the above skills, we know that there is a market for programming and management but it may be possible that he may not enjoy programming and management, so that skill is left out.
It may also be possible that the person enjoys acting and digital marketing but he may not have the relevant skills, so that is also left out.
So, he is left with saving money, tutoring, optimizing and investing skills that he enjoys. Now for this skill set he needs to find the skill for which there is a market.
Most of the time people think that there is a ready market which will immediately reward them for their skills, which may not be the case.
Sometimes you need to find the right audience, the set of people who are going to pay you for the skills that you have.
To find the right side hustle, you need to move from the right intersection area to the core as shown by the green arrow in the diagram above.
The problem with side hustle is that returns are not guaranteed but definitely you will learn things while building your side hustle.
The beautiful thing is that you need not spend a lot of money on side hustle. You can start most of the side hustle with an investment from Rs. 5,000 to Rs. 25,000. We will discuss side hustle in detail in the coming chapter.
In case, you do not know which side hustle will work for you then you need to start multiple side hustle.
In starting, you can aim for 3 side hustles. You do not need to start all the three side hustle at the same time, you can start with one and them and slowly start the other two as you grow and find stuff.
The common element in all the three side hustle will be that you are enjoying doing it and building skills while looking for a possibility to make money.
Out of 3 side hustle it may be possible that only one side hustle may be profitable and the other two may be not or even two of them may be profitable.
However, you should remember that your side hustles should not impact your existing job because your job is your bread and butter. You have a regular income from your job that helps you make expenses, do savings and make investments.
If your job gets impacted then your savings and investments are bound to take a hit and that will hamper your financial freedom goals.
If you are enjoying your side hustle then you will continue and be consistent at it without impacting your work. Consistency will not be an issue if you love doing things. But, if you don't enjoy it then you will lose interest and abandon the side hustle with no or little learnings.
You will learn new things and enjoy your side hustle when you lower the following expectations in the initial phase like;
- Money expectations
- Results expectations
If you can postpone these two expectations and include consistency and learning in your daily schedule then at some point of time you will find success.
This is the nature of side hustle and that is why it is called side hustle - to do on the side without much of the expectations.
Side Business
Side business is when you want to earn money quickly as compared to side hustle that considers money at the later stages.
Side hustle and side business are different from each other. You need not build a side business from scratch, but you can buy an existing business and then can manage it.
In a side hustle, you are;
- Building new skills - that are necessary to run your side hustle like marketing, coaching or may be tutoring.
- Enjoying the processes - because you love to do it, you have a passion for the side hustle.
- No money in near future - you have the market, but your focus is learning and the earning comes at the later stage when you start selling your skills
- Long term is not guaranteed - side hustle is your experiment combining skills + enjoyment + market. You may or may not be successful at it.
But in the side business the scenario is altogether different. You are banking on your expertise to run the side business and make sure that there is a regular cash flow to sustaining your business operations.
You are committed to your side business and need to dedicate time and effort. You are building the processes whether you like it or not to run the business smoothly.
You need to ensure that your side business is generating enough revenues for the long term and is profitable.
In the initial period, you need to manage your side business along with your current job because you still require money to pay your monthly bills, take care of expenses and build up savings.
You should not leave your job and go full time into the side business till the time you are worried about paying your monthly bills. Because your side business will need some time to get into the shape you want it to be.
For example, if you have just acquired a restaurant business, then you need to ensure that the chefs and the other staff are continuing with your.
You still have vendors and existing customers coming to you and if you have some different plans like starting a new cuisine then you have the requisite expert to help you start with. Till that time you need to manage the existing business and wait till the things get stablise.
Once you start earning enough from your side business to sustain all your financial needs then only you can think of leaving your current job and go full time into your side business.
To start a side business, you have two things at your disposal.
#1. Time
This is the spare time that you have on a regular basis after your routine job hours are over. You spend this time relaxing at home, with friends or watching movies.
If you find an hour to two of such extra time then you should think of utilising the time for creating a side hustle or doing a side business that has the potential to earn money for you.
#2. Riskable Money
It is the amount of money that you are willing to invest in the side business. The amount should be a certain percentage of your savings and investment. You need to be clear that the money that you are going to use in your side business contains real risk that you may lose all your invested money.
The amount of riskable money can be as little as 10%-15% of your savings that you are ready to put on risk. You need to be prepared to not feel bad if you happen to lose 50% or more of your money in the near future.
Choosing Side Business or Side Hustle
Visit your spreadsheet to know the amount that you really want to place at risk. Once you know your riskable money number then based on that you can pick either the side business or side hustle.
Let's take a look
#1. Rs. 5K to 25K of Riskable Money
If you are committing an amount of Rs. 5K to 25K of investment money to risk then you should be realistic and go for a side hustle. Where you will learn new skills and enjoy doing stuff without worrying about the cash flows and returns.
Because, if you have Rs. 25,000 and want to start a business in an expectation that it will earn you Rs. 2 Lakh then you are simply trying your luck which is an unreasonable thing to do.
#2. Rs. 50K to Rs. 1 Lakh of Riskable Money
If you have an amount in the range of Rs. 50K to 1Lakh then you can start some sort of side business like buying a small affiliate website or do an informational product selling.
#3. Over Rs. 1 Lakh of Riskable Money
If you are willing to put over Rs. 1 Lakh of your money to risk then should definitely go for side business. A lot of side businesses like a running blog, affiliate website or an ecommerce store can be bought with the amount.
After you are clear with your time and money you need to take your side business seriously because you may have started a blog as a side hustle. But now it has grown up to be considered as a side business. When you have acquired a side business you need to have a mindset of a business owner.
Your side business should be such that it:
1. Promises a return from day one. For example, if you are buying a running restaurant then you will look into the existing cashflow for returns.
2. Should take less/ partial of your time because you already have systems and people in the existing business to run it. For example, if you do not do anything for 3 months (having a vacation for Hawaii), then also your business should run by itself.
3. The side business cannot be operated passively or generate returns lifetime without upgradation because the underlying technology and surrounding economy is changing over a period of time. You need to improvise and grow along with the business over a period of time like 2 to 5 years of time.
4. Your side business should allow you to work from anywhere, i.e it should be location independent or allow you to work remotely.
5. The side business should have the potential to give huge returns (not for 15%) - at least 50% in one year. That means you have a real chance of converting your investment of Rs. 1 Lakh into Rs. 1.5 Lakh by the end of next year.
Saving time and money is important to start a side business. Your goal from a side business is to make money from the existing business acquired.
That was all about the mindset of getting into a side hustle or starting a side business. You can work out on the time and the riskable money that you want to commit and then look which of the two (side hustle or side business) fits in your present life scenario.
Your assignment
Shortlist 3 side hustle or side business that you would like to start based on your skills and investment required.
Thanks,
Pardeep Goyal.
