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7 Steps For How To Start A Side Hustle


Are you considering starting a side hustle? Perhaps you imagine quitting your job one day to take your business full time? Or maybe you need to make a little extra money in your spare time.

Wondering what things you should be focusing on upfront? When launching a successful side hustle, you must have several foundational things in place.

But before we dive into how to start a side hustle, let’s talk about what is a side hustle and the benefits you can gain from having one!

What exactly is a side hustle and how can it benefit you?

A side hustle is an additional job or income stream you generate alongside your primary job. Side hustles are beneficial because they allow you to make more money while utilizing and practicing other skills.

With a successful side hustle, there is no limit to how much you can make. And with some extra money in your pocket, you can help save, pay off debts, or take that trip you wanted.

As exciting as starting a side hustle may seem, you must have a solid plan to fully reap the benefits. In addition, you have to start with a hustle idea that is best for you.

How to figure out the best side hustle business ideas for you

Finding the perfect side hustle that helps you make a little extra cash is only half the battle. You must also find out what business will work well for you and your lifestyle.

And then, of course, there’s how to start a side hustle and the rules and laws to follow. Here’s how to decide what side hustle may be best for you.

Determine how much time you have

A crucial part of how to start a side hustle is to think about how much time you have to spare. Are you free most evenings, or are you already so busy that you struggle to find a few hours a week to yourself?

If you have a couple of hours a day that you could work on your side hustle, you can pick something that requires more time from you on a consistent basis. But if you don’t have much extra time, you might create something mostly passive income after it’s set up.

Pick something that interests you

Think about what interests you. Since your full-time job probably takes most of your energy, finding a side gig that you’ll be excited about long-term is essential. Choose something that is easy for you or that you enjoy.

For example, if you love marketing, you might have a career as a social media marketer. Find something that focuses on what you’re good at.

Decide the amount of money you want to earn

It’s easy to say that you want to make extra money each month, but how much is a little extra? Consider your financial goals and the amount of money you need to achieve them. How much additional income will you need to pay off debt?

Perhaps you want to buy a new car; what is the cost involved? Knowing how much money you want to bring in can help you determine which side hustle to start with.

Some side hustles taking online surveys, or dog walking will bring in a couple of hundred dollars a month. However, suppose you’re looking to replace your current salary or surpass it. In that case, you’ll want to start with a side hustle you can eventually transition into full-time.

7 Actionable steps for starting a side hustle

So, with those things in mind, let’s dive into how to start a side hustle. Plus, we have some fantastic side hustle business ideas for you too!

1. Create a solid business plan for your side hustle

If you’re in the process of starting a side hustle and do not have a business plan, you need to create one now. A business plan is essentially your roadmap for your side hustles to achieve your business goals. You can’t achieve success without a plan!

Your business plan doesn’t need to be 100 pages long. Instead, it needs to focus on key things to help you build a successful business and how you’ll start a profitable side hustle.

Your initial business plan should be fluid and will possibly change—a lot! These changes are expected because as you put your ideas on paper and your business comes to life, you may realize other factors. As a result, you’ll better determine what you want and don’t want in your business or come up with entirely new ideas.

Below are some topics you should include and some questions to get you thinking as you create your business plan.

Create an executive summary

Your executive summary outlines your business and the problem you are solving with the product or service you’re offering. This section, usually a one-pager, will be easier to complete once you’ve built out the main sections of your business plan highlighted below.

Identify your target audience and avatar

When starting a side hustle, you need to know who you’ll sell to. Here, you’ll define your target audience, which includes identifying key demographics such as location, age, and income of your ideal clientele. You’ll also want to consider why your target audience would be interested in your business.

You should also know your ideal client and how you will find these clients. Since social media is a big part of everyone’s lives, LinkedIn, Facebook groups, and Instagram can be helpful in finding clients.

Decide on what products and services you’ll offer

Every business offers a product, such as jewelry or handmade bags, or a service like editing or photography. When deciding which side hustle business you should offer, think back to your executive summary. Whatever you offer should align with the problem your business will be solving.

Once clear on this, it’s a good idea to sketch out thoughts on how you will price your products or services. You’ll also want to consider how you’ll be selling them.

Figure out your operating model

A clear operating model helps you understand and lay out how you intend to deliver value with your products and services. It will also help determine the type of experience you plan to provide your ideal customer.

Start by asking yourself, are my products packaged in a way that aligns with the experience I want my customers to have? Is my website in line with my brand?

Once your operating model is fine-tuned and running, it will allow you to scale your side hustle because you’ll have well-established processes in place on how to run your business.

Research your competition

Ahh, competition. Everyone hates it, but everyone needs it! No business plan is complete without some insight into your competition.

Where is your competition located? What are the strengths and weaknesses of their offering? And how can you differentiate yourself from your competition and improve your offer?

Calculate start-up costs and financing

We’ll cover this in more detail below, but in short, this is a critical part of your business plan and something you won’t want to overlook when thinking of how to start a side hustle.

Here, you’ll outline your initial start-up costs, registration fees, branding costs, website development costs, etc. Then, consider your potential sources of funding and whether or not you’ll need investors. It can help to consider your financial goals and how the business fits them.

Figure out your cash flow and budget

Also called your working capital, your cash flow is how much you need to keep your side hustle running day-to-day. These costs need to be laid out as part of your operating expenses. They will give you a baseline of how much you’ll need at a minimum each month to keep your business going.

And, of course, you’ll need a plan for staying on track with your cash flow. That’s where your business budget comes into play.

Having a solid business budget is essential to the success of your business. It allows you to manage your business finances properly and stay on top of your expenses.

Outline your revenues and profit forecasting

You can’t turn a profit if you don’t have a solid revenue stream. Your business plan should outline the products and services you plan to sell. You’ll want to outline exactly how you will communicate those products and services to your potential customers.

It also means fine-tuning your revenue stream as you learn what works best (or doesn’t). Once you have a solid revenue stream, it becomes easier to forecast your business earnings and profitability.

Also, take a look at potential profits. Becoming profitable and making extra income is great, but ideally, you want to have a clear understanding of exactly how much profit you are generating on each product or service you offer.

You can then assess how to maximize your profitability by reducing costs or competitively increasing your prices (or doing a combination of both).

2. Determine what type of business entity to set up

Before you start providing services or earning money when starting a side hustle, you must ensure it is set up correctly, legally, and tax-wise. To do this, you’ll refer to the structure of your business.

There are different types of business structures to choose from that are recognized by the IRS. They include Sole Proprietorship, Partnership, Limited Liability Company (LLC), or Corporation. Be sure to talk to your accountant about the tax implications of each of these entities.

The different business entities include:

Sole Proprietorship

In a sole-proprietorship business structure, you run the business alone and are personally responsible for all of the related liabilities.


As the name implies, in a partnership, you run the business with a partner or multiple partners. So, the business is managed based on the agreement you set up. You and your business partner(s) are responsible for all the related liabilities.

Limited Liability Company (LLC)

A Limited Liability Company gives you limited liability (similar to a corporation), which means you have no personal liability for business debts and claims.

You’ll also have flexibility in your management structure and ownership, similar to a partnership. LLC owners are called members.

Corporation (S or C Corp)

In a corporation, your business is a separate legal entity, and only the entity itself is legally responsible for any liabilities. Owners are called shareholders.

C corporations and S corporations are the two main types of corporations. The main difference is the way each entity is taxed.

3. Leverage free resources when starting your side hustle

Below are two invaluable resources you will need as you begin your small business journey.

These resources go into much detail regarding the business structures mentioned above. They include the pros and cons and what you need to do to establish your business under these structures.

One last thing. You’ll also need to apply for a business tax ID or Employer Identification Number (EIN) on the IRS website if you are required to do so based on your selected business structure.

Your EIN is like your social security number but for your business. It will tie into your business taxes, hiring employees, and other essential and required legalities.

Starting a side hustle infographic

4. Decide what you will call your side-hustle

The next step in operation is to decide on a business name (if you haven’t already).

FYI—Your business name is a big deal! It will reflect your brand identity and be the world’s first introduction to your new venture. But before you decide on a business name, here are a few things to consider:

  • Will your business name appeal to your demographic?
  • How unique is it?
  • Is the web domain available?
  • Is your business name under someone else’s trademark?

Once you’ve answered these questions, you can register your business with your respective state.

5. Consider setting up business credit

Having a credit profile for your side hustle allows you to maintain a credit history for your business. This business credit profile is separate from your personal credit profile.

With separate credit profiles, none of your personal credit details will be tied to your business credit inquiries, approvals, or financing.

Different business credit also allows a clear separation of assets between the business owner’s personal assets and the assets that are tied to the business itself.

A separate business profile also means protecting yourself from business identity theft. If your business credit is intertwined with your personal credit, you might not be aware of any theft. You can also monitor your business similarly to how you would monitor your personal credit.

You want to ensure the credit bureaus and your business creditors and vendors can confirm your business information when you apply for financing or do business with them. Below are the steps you need to take to set up your business credit properly:

Incorporate your business

Set up a corporation or an LLC (Limited Liability Company) to ensure your company is considered a separate business entity. For businesses that are sole proprietorships and partnerships, the business is the same as the owner.

So to have separate business credit, your business needs to be a corporation or LLC.

Obtain a Federal Employer Identification Number

A FEIN, or a Federal Employer Identification Number, is the number you’ll use for tax filings and business registration. You’ll also need to provide this number to vendors you work with.

Open a business checking and savings accounts

You’ll need to open business accounts in your registered business name. These accounts are where you’ll make your day-to-day business transactions.

Establish your business credit profile

Getting a business credit card, which you use for business transactions, can help establish business credit. Another way is through buying products and services from vendors and repaying them within a specified period, also known as net payment terms.

These vendors then make reports to the credit bureaus with your on-time payments. The three major credit bureaus for business are Experian, Equifax, and Dun & Bradstreet.

Pay your bills on time

Not just on time but in full where possible to build your business credit score, i.e., your Paydex Score.

6. Create a plan to obtain funding for your side hustle if you need to

When starting a side hustle, one of the biggest roadblocks is being able to fund it. Even if your business idea is excellent, you still need money. I touched on this above, but here I’ll outline the different types of funding you should consider:


Self-funding your business from savings should be your first resort. Funding your business is beneficial, so you don’t start with debt.

If you have no money (or not enough) to put toward your business immediately, use free and inexpensive resources to get set up. Start saving a little bit at a time for your business.

Use a free blog platform, create a social media following, and create a small sample set of products instead of a full-blown product line. Also, consider using free online scheduling and planning tools.

Self-funding means you may need to start small and follow a slower growth progression than if you had a ton of money, but it comes with less risk.

Family and friends

The general rule is to keep friends and family separate from your business, but it depends!

Your friends and family can be great resources when it comes to funding. Why? Because you know and trust them, you can work out low or zero-interest payments with them.

But be careful not to ruin relationships with your friends and family due to miscommunications. Draw up contracts and make sure you are all in agreement with the contract terms.

Angel Investors

Angel investors are typically high-net-worth investors who invest in your business. An angel investor is most likely looking for equity ownership in your business. Although angels can be great investors, they mostly invest in companies vs. side hustles.

Bank loans

The good news about getting a loan from a bank is that you don’t have to give up a share of your business in exchange for a loan.

However, you’ll need good credit, AND you’ll be taking on debt that you’ll have to pay back with interest over a specified period.


Crowdfunding collects money from various people (usually online) to contribute to your product or service creation in exchange for a reward.

The reward might be the first available offering of your product or some extra equity (shares/ownership in your business). Examples of crowdfunding include kickstarter.com and fundable.com.

With crowdfunding, you don’t have to give up any equity. You also won’t have to go into debt to fund your business. However, it’s important to know that you will be paying the crowdfunding platform fees when you raise money via crowdfunding.

These fees will be based on the total amount that you raise. In addition, there are also significant tax implications. Plus, you’ll have to put in a lot of work (including marketing) to ensure a successful funding campaign.

7. Make a schedule that works

One of the most vital things to do when starting a side hustle is to create a schedule. So be sure to make a schedule that helps you have enough time for a lucrative side hustle and your day job.

Figure out your hours

How many hours a week or day can you devote to your business? Look at your schedule and see if you can take anything off your plate to make more time for starting a side hustle. If not, you may find that working on it a little each day, even if it’s just for an hour, is most effective.

Stay organized

Stay organized when planning how to start a side hustle. Get a planner or stick to a strict schedule to ensure you have enough time to devote to this new venture. Remember to keep track of appointments and meetings and regularly check your emails.

Hire some help

At some point, consider bringing someone onto your team to help out. A virtual assistant can be helpful if you have the money for it.

While this won’t be needed for a while, it’s something to be aware of later when you can afford it and your time becomes more limited.

11 Fun and profitable side hustle business ideas

Do you need help brainstorming ideas for starting a side hustle? Here are some great side gigs to get you thinking!

1. Dog walker or sitter

If you love dogs, dog walking and pet sitting are the perfect side hustles. Many people need someone responsible to help care for their furry friends. Plus, you can make a lot of money!

Check out sites like Rover to help you get started!

2. Real estate agent

While this requires time, licensing, and learning, becoming a real estate agent can be incredibly lucrative, especially if you live in an expensive neighborhood. Real estate professionals also get to set their hours to an extent.

3. Etsy shop

If you’re creative, consider opening an Etsy store. People love to find unique products like jewelry and blankets on this online marketplace.

If you can create a popular product, making a full-time income may be possible. You also get to make money doing something you love!

4. Blogging

If writing is one of your passions, or you love sharing what you know, a blog could be for you. Blogging works well as a part-time job and could lead to plenty of income in the future.

In addition, blogging is a great platform to earn additional profits through affiliate marketing and selling digital products.

Some bloggers make enough money to live on, or even more than that.

5. Freelance writer

Enjoy researching and writing articles? You can become a freelance writer.

Help bloggers and companies to explain their products and services or share information with their readers. Freelance writing is a good side hustle that is profitable and flexible!

6. Graphic design

Love art? Graphic design is a fun and creative idea. What makes it one of the great side hustles is its versatility. For instance, you can do website design and sell your work on Etsy, Upwork, Fiverr, and more.

7. Social media manager

If you are really into social media, become a manager or marketer. As a manager, you can help busy entrepreneurs and businesses find the right clients through Facebook ads, Instagram, Twitter, and other digital marketing.

8. Rent out your spare room using Airbnb

Do you have an extra room? Rent it out using Airbnb. Or better yet, if you have a lot more space to rent or money to invest, you can make money from rental properties.

There are a variety of YouTube channels to help you set up an attractive space for potential guests.

9. Freelance editor

A freelance editor can work with several clients at once and edit the work of writers. As a bonus, you can choose what hours you want to work on your side hustle since freelancers rarely have specific work schedules that must be followed.

Many businesses can make money as a side hustle. Anything from delivery drivers of Uber eats to online surveys can make you extra cash. The key is to find what will work best with your lifestyle.

10. Create a side hustle with Amazon

If you think about all the money you’ve spent on Amazon, it’s about time you start earning with them instead. Amazon offers a variety of ways to make a profit. Some of the side hustle business ideas from Amazon include:

11. Start a food delivery business

Bringing food and groceries to people who don’t want to eat out is a simple and profitable side hustle business. You can work under numerous companies, such as DoorDash, Uber Eats, and other delivery services.

You can choose your schedule and work when you want. Plus, it’s a great way to get familiar with restaurants in your area.

Starting a successful side hustle is possible!

Now you have all the specifics to set up your side hustle the right way. Remember to start with the logistical side first. Create a business plan. Make sure you have proper funding and set up your business entity.

Once you’ve established all that, you can choose a name for your side hustle and decide whether to offer a product or service.

As you can see, there are many unique side hustles to choose from. However, If none of the above suggestions caught your attention, other resources, such as books on side hustles or online courses, can give you more detailed guidance.

It’s time to work on making it a massive success! It is possible to build an incredibly successful side hustle with patience and hard work. It may even become your full-time hustle one day if you decide!

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