For your side hustle to be successful its imperative that you solve a problem for the customer either with a physical product, a service, some training or other information. The value of that service to the customer must be more than they pay for it. Let’s jump in and have a look at the details on the 7 points to ensure your side hustle is a success!
Everyone is Starting a Side Hustle
It seems like everyone is starting a Side Hustles or Second Jobs. In December 2019, the New York Times (NYT) published results of a survey indicating that 28% of people hold multiple jobs is 28 percent. The B.L.S.’s estimate is just 5 percent. The official figure for people with multiple jobs in the EU is 4.2percent but the rate is as high as 10.2 percent (Iceland). With them becoming so popular, it really important that the side hustle you choose has all the factors for success.
Why do People Take a Second Job?
Based on the NYT survey, 48% of people took the second job because they wanted to, not because the needed to. Growing your income, however it is earned, so that it exceeds your expenses is the only way to wealthy.
The reason given by respondents:
Can’t find full-time job
Its not just about the money thought. The New York Times survey showed the people with the highest satisfaction are the self-employed with one job.
Choosing A Great Side Hustle.
1. Will It Provide a Solution for Your Customers?
I guarantee that all your future customers want you to solve some sort of problem for them. The better the solution and the easier you make it for them, the more successful you will be.
As an example, this blog is one of my side hustles. You are the customer and I provide information. In order for my solution to be useful, each article needs to be well structed and easy to follow article. Additionally, if you, the customer, have clear take away information that you can use to achieve your goals, then you will probably read more articles, or tell someone else about the site.
However, if the quality of the information is poor or if the information is incorrect, confusing, or hard to read, then you will stop reading and will not come back.
Understand the problem that you are trying to solve for the customer and solve it better than the competition.
2. Can You Give Your Customer a Return on their Investment?
Whatever the service you offer a person, the value to them must be greater than what they pay you. This may be a simple cash value, or a combination of time and cash.
Let’s say you know someone with a large client list, maybe its a small business that you use yourself – the hairdresser/barber, beauty salon, accountant, or financial advisor. Have you ever received an email from them? If not, there is an opportunity for them to email their clients to market themselves, exclusive offers. You offer to draft emails to the clients for a fee. If you were to charge $25-$50 per email, then the business would get a return on their investment many times over, not just in terms of the cost, but the small business owner doesn’t have to spend an hour writing an email.
If you were to ask for $1,500 per email, it is unlikely to give a return to the business.
Several years ago, I did an Amazon FBA training course with a company called Marketplace Superheros. The price of $999 made me extremely cautious, I questioned if I would get a make my money back. It wasn’t obvious to me. You should price your side hustle so that the return to the customer is something that they don’t have to questions and think long and hard about.
For it to be a good side hustle, the price must be an obvious win for the customer but must also be financially worth your time and effort.
In case you’re wondering, I got a return many times my original investment. Amazon FBA still has opportunities. Feel free to watch a recorded webinar from the company I just mentioned, marketplace superheroes. – it is an affiliate link)
3. Is it fast to Learn & Quick to Deploy
The ideal side hustle is something that you can use existing knowledge and/or skills to get started. After that, choose something where you can learn enough to get started within a few weeks to a couple of months. That allows you make progress, stay motivated and to start earning. If you must learn a new skill for years, there is higher likelihood that you will just give up.
Unfortunately, if the skill level is too low, there is no barrier to entry. Side hustles that have a low learning requirement means lots of people can compete. If we take Fiverr as an example there are many people competing for low skill commoditised work. The price for these low skill gigs is too low to be a sustainable income for most developed economies.
4. Flexible Times & Location
Most of us would like to escape the 9 to 5 style of the day jobs. YouTube has many channels of people who sail the world and work as they go. We hear of “Digital Nomads” who support their global travels by working for their laptops.
Whatever your plans, when you start a side hustle you will keep your day job, hence the name “side” hustle. Therefore, the hours need to flexible so that you can work around the requirements of your primary source of income, family, etc.
If your intention to grow the side hustle into the primary source of income, then be reassured that the NYT survey found that self-employed people with one job are the most satisfied by their jobs. The reasons given are that the self-employed have the power to change things they don’t like, control their working hours and their sense of purpose.
Highest Satisfaction: Self-Employed in One Job
Average job quality ratings by work relationship and number of jobs, measured on a 1-10 scale based on respondents’ ratings
Employed, multiple jobs
6.4 – 6.4
Employed, one job
Self-Employed & Employee
6.4 – 6.4
Self-Employed, multiple jobs
6.2 – 6.9
Self-Employed, one job
7.4 – 7.9
Whether you intend to travel the world or stay put, choose a side hustle that will give you the flexibility to keep your primary source of income; when or if it eventually becomes your primary income source, then be sure you can enjoy the flexibility offered. Don’t just trade one 9 to 5 trap for another.
5. Can You Support the Start Up Costs?
Every business that is started will have sort of start-up costs. These may be a $50 for a WordPress template, or several thousands to find the right product on amazon and place your first order. In addition to the start-up costs, there may ongoing monthly costs, or additional promotional costs, or services needed. Do not take a loan.
Make a list of all the purchases required, and the activities that you need to pay for as part of set up and maintenance until you start to make some money. As part of the evaluation, you must ask if you will make a return on your investment that is in line with your goals.
Know the costs needed to start your business and evaluate your ability to support those costs. If you need to trim your spending, be sure you will stick with it or else you will have thrown away your money.
6. Does it Have Income Growth Potential?
I was chatting with a colleague recently and I mentioned that I had started a blog. He was interested in knowing how much time was required to research and write and what are the expenses of web hosting. He was most interested in how much I made from the blog. I told him it was miniscule, and he immediately declared it was a waste of time. At the time of writing I make less than $100 per month, but I know that it has immense potential to grow.
My Amazon FBA journey was the same. It took months to get the first product up and running, and then some time to make the first sale.
I tried teaching English online too. I was able to take several hours per week and charge a decent rate, but the income was limited to the number of hours I was in contact with the student. It wasn’t scalable – it didn’t have the growth potential that I want.
When you start a side hustle, the income will be small. This is nothing to worry about as long the side hustle that you have chosen has income potential that satisfies your goals. Perhaps $400 per month from teaching online is sufficient for your goals and the amount of time you have available.
7. Can it Grow to Generate Passive Income?
There is a popular illusion (perpetuated by salespeople on YouTube) that passive income can just happen overnight. It is nonsense. Unless you have significant capital to buy a business and have manger run it for you, or can buy $5million in dividend paying stocks, then passive income must be built over time.
Blogging, Amazon FBA, YouTube are extremely popular ways to create income. For each one, a lot of time is required up front to create the content or identify the ideal product. Over time the income grows, and that past work continues to generate income, even though you are no longer actively working hard on it.
For example, after a blog post or a video is published, it has the potential to continue to generate income. One YouTube typically does not generate a lot of revenue, but one hundred videos can generate a lot every day.
Other Peoples Effort
Another way to make things passive for you, is to leverage other people’s time and effort. It possible outsource low complexity tasks using resources such as Fiverr or Upwork.
Try to choose something where the work can be used repeatedly, and preferably with little or no effort from you. This way you can make money when you sleep.
What do think is needed to make a side hustle successful? Let us know in the comments below.