If you want to start a side-hustle, this is for you

Lessons I learned running my multiple side-hustles

About four years ago, I started my first side hustle next to my day job. In the beginning, my motivation was to do something of my own and start practicing independence while I still have the security of my day job’s salary.

My side hustle was about using marketing automation to help entrepreneurs in their social media marketing campaigns. I was surprised how fast I could start getting customers and making some side income… It wasn’t much that I can brag about it here, but I never imagined I could convince some strangers to pay me to do service just a while before that.

Since then, I have started several side hustles, including career and business coaching, recruitment services in the tech industry, launching a digital product, and becoming a blogger and writer. While most of these side hustles did not (yet) take off for me to match the income from my corporate consulting business, I somehow made some decent side earnings from each of them.

In this article, I am sharing with you five lessons I learned from running multiple sides hustles next to my daily business:

1. Accept that your side hustle may not ever become a full-time business

If you get into a side hustle, make sure you get into it with realistic expectations. One of the biggest reasons people fail their side hustles is that they give up because they think the side hustle will never succeed or make them rich! But what if we go into it with realistic expectations? It might increase of chances of success. A side hustle might make you just a few hundreds of extra bucks per month. But even that income is valuable in the long-term once you get into investing and learn the value of side (semi-)passive income.

You can believe it or not, but most businesses never take off to make the owners wealthy or at least financially free. Even the top 1% of business owners (who make over 1M dollars per year) make their fortune from 1–2 winning business ideas. You might have heard many times that the average person with a net worth of over 1M dollars has seven sources of income. So guess what? A lot of those income streams might have been from side hustles! So, It is entirely Ok if your side hustle stays a side hustle forever.

2. Validate your business idea with the leanest process

In the beginning, you may be tempted to put a lot of effort upfront to build your business. Things like building a website, social media presence, or a mailing list might keep many people busy for years. However, people busy doing these things might not know that the sole purpose of running a business (including side hustles) is not how your business looks like, instead to generate profits while adding value to customers with your product or service.

It would be best to put “validation of your idea” as the first and foremost priority is your side hustle. You will soon realize that customers might not even care about your website or social media profile as long as you give them what they need. Then, you can start offering your product or service in the leanest possible way, focusing only on the core aspect, and start asking early customers (aka early adopters) if they are willing to pay you for it which is the most crucial factor. So, if you want to scale your side hustle someday, you need to focus on sales in the early stages and use the revenues later to invest in having a good-looking brand or expensive software subscriptions for your business.

3. Scale your business only when you have to

People make one common mistake while starting their side hustles aiming to scale the business too fast and too early. Two of the most commons examples of this mistake are in information products and software-as-a-service (SaaS) industries. For example, an information products business owner might want to scale the business, e.g., selling video courses with a fully automated sales funnel right after seeing the first signs of traction (selling training services). Another example can be entrepreneurs who aim at running a SaaS business without gaining the validation that the “actual service” that they want to automate has a demand.

We should keep in mind that the target market might react to every new offer differently; Your audience might want to be willing to pay premium prices (Over 1000$) for receiving the 1-on-1 support from an experienced coach but might not want to pay mid-range costs (like 499$) for a video course. In this case, the low conversion rate for an automated sales funnel might even make it unprofitable.

Most Entrepreneurs plan to dedicate months to building an information product and running digital ads towards their sales pages. Maybe this can generate some revenue, but the advertising costs are often high, and the conversion rates drop too much (comparing to personalized coaching services). It may be tempting for an information products entrepreneur to scale the business before gaining the necessary product-market fit. Still, in the end, you are paying the price for scaling your business to a lot of providers in marketing, payments, software platforms that it might make your whole operation unprofitable.

This fact is especially crucial for entrepreneurs who pursue a side hustle because their minds are often preoccupied with building passive income streams and want to automate the business too early. As a rule of thumb, always automate your operations (e.g. marketing, sales, delivery) when you have so many customers or prospects that you cannot run the operations manually anymore. That might be good a proxy for product-market fit and the fact that people love your offer. It is advisable to build a product around your winning offer and fully automate your sales process only after achieving this level of growth.

4. Re-invest your profits to grow your business

Capital for businesses is like air for humans. Companies cannot survive without making profits or constant injection of outside money. It may be tempting to withdraw your profits early and achieve financial freedom in your life, but note that results achieved in the past are never predictors of the future. For example, a product or service that worked very well in the past might not be appealing to the marketplace in a few months, or you might simply run out of enough prospects in your target market to advertise to. Therefore, it is better to foresee these events and re-invest at least some of your profits to grow your business, your advertising budget and to build new offers or products for your audience. After you have achieved a level of growth that creates acceptable monthly-recurring-revenues you can make it easier for yourself and withdraw some profits or give yourself a salary.

5. Keep optimizing your execution no matter the results

In today’s competitive marketplace, it is almost impossible to achieve sustainable business growth without constantly optimizing the business processes; This is what I learned from working with many Fortune 500 companies. Optimizing business processes is a principle for all of the world’s largest corporations, let alone startups and side hustles.

When you start a side hustle, you may create many business processes like marketing, sales, accounting, delivery, etc. You will soon realize that you must constantly optimize your processes to manage your resources like time or budget effectively. These processes can be the way you do marketing, how you deliver your service or product, how you do accounting, how you create a product, and how you make a product your product.

This point goes hand in hand with the last two points about re-investing your profits and scaling your business. If you want to scale your side hustle and make it a full-time income or a machine to achieve financial freedom, you have to start looking at your processes and constantly think about ways you can optimize them. These optimizations might not necessarily be realized by buying an external product or service but by simply trying to make your way of doing things faster, leaner, and more effective.

TL;DR Summary

Starting a side hustle may be a great way to move towards your entrepreneurial goals and achieve financial freedom. To maximize your chances of success, you need to first focus on validating your business idea, generating some revenue, re-investing the profits to optimize your business processes until you achieve the necessary traction to scale your business. It is also crucial to go with the realistic expectations into your side hustle and accept that your side hustle might never reach the level of your full-time income. This helps you to enjoy the process and work hard towards achieving your entrepreneurial dreams.

About the Author:

Pouyan R. Fard is the CEO & Chief Data Scientist at Fard Consulting. Pouyan has years of experience advising companies, from startups to global corporations, on data science, artificial intelligence, and marketing analytics. He has collaborated with Fortune 500 companies in pharma, automotive, aviation, transportation, finance, insurance, human resources, and sales & marketing industries.

Pouyan is also mentoring startups and talents active in the big data industry. His passion is to nurture the next generation of data scientists through career training and helping them to find top job opportunities in data science.

Pouyan has done his Ph.D. research work on predictive modeling of human decision-making and remains interested in developing state-of-the-art solutions in machine learning and artificial intelligence.