Today I want to share with you my thoughts on the financial impact of starting a new business – specifically, how much does it cost to start a side hustle?
There are lots of different business types out there that you can start. To name a few: Buy a franchise, buy real estate, or start an online store. Not all of these are appropriate side hustles.
What makes a side hustle unique is that you can generate some cash relatively quickly, and without investing too much money into the business. If this piques your interest, keep reading to reveal some top side hustle ideas and learn what it costs to start a business that can generate some extra cash for you while you are still working a full-time job.
What is a side hustle?
A “side hustle”, but definition, is a side-job or business you can run while still keeping your day job. The purpose of taking on a side hustle is to earn some extra cash to supplement your income, achieve FI, or even start building a business that will allow you to one day fully leave your day job.
When I first graduated from college, I delivered pizzas on Friday and Saturday nights to earn some extra cash. My first real job didn't pay that much and between rent, my car payment and student loans, I needed that extra cash to help with the monthly expenses.
So you may be interested in starting a side hustle for a variety of reasons. You might be looking for a little extra cash to pay the bills each month like I was. Perhaps you want to invest more into your retirement, save for the down payment on a house, or qualify for a mortgage. Or, it could be a vacation and time in the sun that you are craving! Whatever it is, you are just not content with the money you are earning from your day job and want to earn a little extra to supplement your lifestyle.
A side hustle, by definition, is not your main job. Rather, a side hustle is something you do at night, on the weekends, or in the early morning hours when everyone else is still sleeping.
What side hustles can I do?
There are all sorts of different side hustles that you can do. The options are only limited by your imagination. But there are several categories of income that you should be aware of.
Side hustles that exchange time for money
First are the jobs that exchange time for money. You're going to get paid very quickly, but you're going to have to spend the time to get paid. This typically involves getting a second job delivering pizzas, waiting tables, or even mowing lawns or babysitting. As I mentioned before, after college (and again while I was in law school) my quick way to earn cash on the weekends was to deliver pizzas. I could easily make a hundred dollars a night and I loved doing it. Even now, it has its appeal – just drive around and listen to podcasts! This is a great side hustle.
Similarly, job-based independent contractor work is widely available…and more opportunities are popping up all the time! Earning this extra income can be as quick as jumping online and signing up for an agency that matches freelancers with companies looking for independent contractors (i.e. UpWork). You could also drive for a ride share like Uber or delivery service like Instacart or DoorDash. There are so many options out there, and these work-based websites make it easy to generate additional income on your time, whenever you want it.
Investing as a side hustle
You can also consider investment-based income. These require a time commitment to research potential investments and the returns/income are not guaranteed. So you must have a solid understanding of your risk tolerance and ability. In addition, you will need investment capital to start a business like this.
Some great investment opportunities include purchasing rental property (i.e. real estate), or on a smaller scale, rental equipment or vending machines. These are all attractive for their ability to generate recurring revenue. Time will be spent on research, maintenance, and potentially managing tenants.
And here in 2024, if you are considering investing in real estate, high mortgage rates may hamper your profitability unless you have the money for a large down payment or even to purchase a property outright.
My recommendation, if you are considering investing, is to pick a niche. This could be rental property, or even stock trading. Then learn as much about that niche as possible by reading books, following other people that (theoretically) are successful in the niche, and listening to podcasts. And only when you feel comfortable enough in the niche should you take the leap. If you are considering day trading, for example, I would recommend using a dummy account and learning how to read stock charts before you start playing with real money.
My favorite side hustle… online business
My favorite side hustle, though, is to start an online business. THIS is the revenue source worth really digging into today.
Gaining in popularity, you can easily build a website or blog that attracts readers by creating valuable content that resonates with them. Your financial gain and business growth come from readers who click on an ad, purchase a product directly from you or from an affiliate link you are promoting, download a freebie, or get on your email list where you can build a relationship with them (and then sell them stuff!)
To be successful, effort will be required in the form of consistent content creation and keyword research and it may take six months to a year to begin seeing some financial gain. There are also some costs involved, but keep reading as more is revealed about that (spoiler alert: it’s affordable!). But this really is within your reach!
Wait, you want ME to start my own online business?
There are a couple of reasons why you might be hesitant to start an online business as a side hustle.
You are concerned about the legal stuff
First, you might be worried about the legal aspects of starting a side hustle. There may be required steps to take in regard to licensing, LLC formation, accounting, protecting your intellectual property, and more.
You don't want to make your employer mad
It is also critical to make sure you are not in any way violating your conditions of employment at your current job. You might have an employment contract or some sort of non-compete that says you can't do something that's going to harm their business. As long as you stay in your lane and your employer stays in theirs, then you shouldn't have too many problems. But, if concerns persist in any of these areas, I would first talk to a lawyer.
Online business seems like a scam
Another reason you may be hesitant is a lot of ideas just seem like scams. Especially when it comes to an online business, people are touting the money they are making from side hustles, but you are wondering, rightfully so, if that's legit or not. So, you're just kind of hesitant to get into that. But you can steer the ship here. Do the due diligence on any opportunity you are considering. If an online business is the avenue you choose to pursue, you have full control over the content you put out into the world.
You are happy with your job
It's also possible that you may be perfectly happy with your nine-to-five job. Earning more money certainly sounds tempting, but you tell yourself, “Honestly I just don't have the energy or the time or the knowledge to really start it. I don't know even how I would start it if I did want to.” I get it. I have several lawyer friends that are completely content to put in their hours, get their paycheck, and enjoy the health insurance and matching 401(k) contributions and two weeks of vacation.
There is nothing wrong with that. So if you are happy where you are at currently, then maybe this isn't for you. But if you are reading this, then chances are you are looking for something more.
You don't like to write…
When it comes to being an online content creator, just know that you don’t have to be a writer to do this! Use good tools. Be conversational. Create content from your knowledge or interest wheelhouse. Find online communities that share those interests. That is your “village” and these are your “people.” And you don't have to write.
You could start a podcast or make videos. Pick the medium that works for you. Or hire other people to write for you.
There are options here.
But I might fail…
Lastly, there is the mother of all hesitations. You are worried about starting and failing. Yes, you could fail. But, honestly, what's the worst that's going to happen? If your first idea doesn't work, come up with a new idea and start over again! Or, if it fails because you don't spend enough time on it and and put in the work necessary to succeed, well, not a lot of time was lost and you just go back to your job anyway. No harm, no foul.
Make sure to read my LinkedIn post about how building a business is a lot like making bread.
Whatever your hesitation, the worst thing that happens is you go back to the status quo which is where you're at right now.
What makes an online business the best side hustle?
Hopefully, you are getting the sense that I am nudging you to try your hand with an online business in the form of a website, blog and/or online store. I have faith in you!
But, if you need more reasons than just my encouragement, here they are:
- Your upfront cost is low: The most enticing reason to consider starting an online business, especially as a content creator like a blogger, might be that there is little upfront investment. Continue reading to learn more about some specific costs (and resources) you’ll encounter.
- It is a scalable business model: Not to be overlooked, another benefit of an online business is that it can be scalable. By that, I mean that you have the opportunity to increase demand and increase profitability without increasing work. At its root, you are creating an asset that is going to produce income for you over and over again.
- As an asset, it can be sold: Yes, it’s true! Your website has the potential to be a legitimate business you can sell in the future for a substantial profit. If you build up your audience base, receive a certain number of monthly visits, and generate a certain amount of revenue in terms of ads or affiliate sales, then, ladies and gentlemen, you have an asset. People buy and sell these websites all the time.
In fact, I have a client right now who is working towards doing just that. We are helping him to trademark his brand as he builds up his website. Once his trademark is officially registered, he will be in a great position to sell his his business. - You are not trading time for money: While it does take time and effort to earn the reward, as a scalable business model, those factors operate independently of one another. There really is no limit to your earning potential.
Of course, even though these are some very promising pros, that isn’t to say success comes easy. I would be remiss if I didn't also share some of the cons of building a website or a blog.
Not surprisingly, it will likely take a long time to build up an audience base. You're going to be investing 10 to 20 hours a week probably for six months to a year before you see a return on your investment in the form of ad revenue (if your goal is ad revenue, which I would say should be your FIRST goal). Consider that you have to receive at least 50,000 visits per month before you can even be considered for some of the ad networks like Mediavine. So that sets the bar for your initial goal – get your website rocking with at least 50,000 visits a month.
How do you do that you do that?
Well, by creating a lot of content. Lots and lots of content. You are typically going to be using low-demand, high-traffic keywords, which you have to nail down. That takes effort and time, but you can do it!
Another con, or just consider it a fact of life, is that there is no guarantee of success, of course. If you pick the wrong niche, chances are you won’t be successful. You'll just be spinning your wheels. It takes a lot of upfront work to create content – to test content, platforms, and even audiences to measure what works and what doesn’t. It is critical to find a formula that creates traffic for your unique website or blog.
So, how much does it cost to start a side hustle? (as an online business)
As has been mentioned, the investment you will make to start an online business as a side hustle is very, very low.
- You need a website host. Aside from it's most basic purpose of providing you with your online presence, your website host will provide you with loading speed and security. While there are tons of options out there, my preferred vendor is about three to ten dollars per month. Not a huge investment and you can’t get started without one.
- You are also going to need to invest in a keyword research tool. Using keywords that will drive traffic that will drive traffic to your website will be the lifeblood of your business. The tool I most recommend is Rank IQ. It's the easiest to use and provides the most bang for your buck at $50/month. RankIQ was created by a blogger who does exactly what I am preaching here – he builds websites, grows his audience, and then monetizes his sites for profit. You definitely will want to check it out.
- I would also recommend a WordPress theme. A WordPress theme should provide you with easy-to-use templates and stylizers that enable you to customize your website. There are plenty of free ones, though the one I use and love is Astra. At the time of this post, costs $50/year. So if your business is worth that indulgence (wink-wink), Astra is what I highly recommend for functionality and ease of use.
All told, you're in for $600-$700/year to cover website hosting, themes, and research tools. That's it. That's all you need to start your business. You don't even need to pay all that up-front, you just need to pay a monthly payment.
Are there legal considerations when starting an online business?
As a lawyer, it makes sense that I should also mention some legal aspects that you need to be aware of.
To set your business on the path to success, do not overlook essential some legal steps. As you are just starting out, you may need legal help (or you can DIY it). If you are considering hiring a lawyer, your investment will be around $3,000-$5,000. This estimate takes into consideration costs associated with setting up your LLC, applying for a trademark, hiring a registered agent, and getting the contracts you need to protect and flourish in your business. In my humble opinion, taking these measures is really non-negotiable.
A special offer for readers…
You’re also in luck because I have a special offer for you if you have read this far.
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Basically, you get everything you would get if you hired us to do it all for you, at a fraction of the cost. If you are on a budget as you grow your side hustle, this may be the perfect option for you.
If this sounds like something you would be interested in, click here for more details and to sign up. Our retainers start at $95/month.
I believe that building and growing a blog is absolutely the best side hustle out there. It is the best way to build a business online that is going to be scalable, that can develop as an asset you can sell, and all the things.
If you need help getting started, I'm here for you!
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