As useful as side hustles can be, they are not without their problems.
The entire concept of a side hustle tends to lend itself to confusion and the occasional problem; after all, this is something that you are doing in addition to your usual responsibilities. As a result, there’s always going to be some room for error— but it’s vital that you ensure that those errors don’t begin to stack up.
You may be wondering why this is, given that a side hustle is primarily a boost to your disposable income rather than a full-fledged business. However, look at it like this: while your side hustle is not intended to be a full business, it is something you’re spending your time on. If you’re going to spend your time doing something, isn’t it best for you to focus on ensuring that it’s worth your while? A side hustle should deliver returns, and to maximize those returns, you’re going to have to minimize the errors… and we’ve come full circle!
So now we’ve established the fact that an error-free side hustle is important, it’s time to consider the mistakes that side-hustlers tend to make. Learn from the errors of others and ensure your side hustle is free of these oversights, and you should be able to generate the extra income you want…
1. Choosing a side hustle in a niche you’re unfamiliar with
The first mistake many people make when choosing their side hustle is choosing something they don’t know how to do. This is frighteningly common, and it’s a huge waste of time.
A side hustle is about generating extra income, not always learning new skills. If you have to undergo a process of learning and training to just be able to do your side hustle, your time isn’t being used effectively, and you’re not able to generate profits. While a small, short learning curve is fine, what essentially amounts to retraining isn’t.
It’s far preferable to choose a side hustle that plays to your existing strengths. This means you can hit the ground running and start generating a profit as soon as possible.
2. Not taking care of the bureaucracy
A side hustle is a great way of earning extra cash, and few side-hustlers see their endeavors as an actual business in its own right. While understandable, this thought process can actually be damaging. A side hustle is a business; it’s not a full-time business or responsible for providing you with an income, but it is a business.
This means that you’re going to have to do all of the essentials that businesses require in terms of bureaucracy. You’re going to have to register any income you make with your local tax office; you need to ensure you devote time to finding the right insurance to protect both your business and your customers; and you have to comply with any relevant legislation. Your side hustle may not be a full-time business, but you still have to go by the book and ensure good practice when dealing with the red tape involved.
3. Overloading your plate
It’s good to have a side hustle and bring in extra cash to boost your personal budget. However, it’s not good to have a full-time job, a side hustle, family responsibilities, and a thousand and one other things that are demanding your time.
For one thing, oversubscribing to various activities will have a negative impact on your ability to maintain a good work-life balance. Secondly, when you’re oversubscribed to the point you have no free time, you’re simply not going to perform at the best of your abilities in all the tasks you have to do. This could mean that your ability to generate an income from your side hustle is severely compromised, and the time you spend on the effort could ultimately be wasted.
So remember, it’s good to be busy and it’s good to have multiple things happening at once, but try not to go overboard— you need a little time for yourself as well. Try and organize your schedule so you have at least six free days a month where you can do as you please. If you’re wincing at the idea of having that much spare time, then that could be a sign you’re already oversubscribed, and it’s time to cut back— it’ll serve you better in the long run!
4. Not tracking the numbers
Many people like the idea of having a side hustle. They like to think of how their budget can be improved, how they can have more cash to spend on little treats, and how they may even enjoy a greater sense of financial security as a result. However, a side hustle is only a good side hustle if it’s actually generating an income. There’s little point in having a side hustle for the sake of it or because it makes you feel better; you need it to turn a profit.
It’s vital that you treat a side hustle as an endeavor you expect to see a return from. This means you have to be dedicated, and you particularly have to watch your finances like a hawk. Create separate banking and financial monitoring just for your side hustle, noting down:
- The number of hours you spend working on your side hustle
- The amount you spend on your side hustle (for example, on marketing costs)
- The amount of income you receive from your side hustle; ideally, this figure should be net rather than gross profit.
It’s all too easy to engage with a side hustle and just presume it’s making you money and justifying your engagement with the endeavor. As you may be receiving some money from your side hustle, it’s easy to presume you’re doing just fine if you don’t diligently record the amount of time and money you spend vs. the money you generate. Check in with your figures on a weekly basis. If you don’t like what you’re seeing, then you will need to change what you are doing to try and ensure your efforts are fairly rewarded.
By ironing out the errors in your side hustle strategy, you can be confident of delivering the best returns for the time you invest. The higher the returns, the higher your disposable income, and the happier you are with your efforts— ultimately, cutting down on mistakes in your side hustle is a reward in and of itself!