How to start a side business

If you've dreamed of starting side business for extra income or to pursue a passion, be sure you're prepared with the right business setup, the right tools, and the right attitude.

by Sandra Beckwith
updated March 15, 2023 ·  3min read

Budding entrepreneurs start side businesses for many reasons—extra cash, a challenge they aren't getting from other employment, or to pilot an idea they'd like to turn into full-time work, among others.

Whether you're looking for help paying the bills or hoping to create a new career opportunity, some entrepreneurs with experience in this arena offer advice on how to start a side business.

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Find the right fit

As you think about side business ideas, consider what you're good at that people will pay for.

When Micah Redden, owner of Spire Property Solutions, helps friends and family brainstorm side business ideas, he asks them:

  • What are you good at doing right now?
  • What are the skills that someone you know needs right now?
  • What skills are worth money to someone you know right now?

"It's important to find the central overlap of those three elements," he says.

Make sure you enjoy doing it

You don't want to jeopardize your current employment by slipping in a little side hustle during your regular workday. Because of that, you'll likely be working a full day before spending time on a side business.

That's a lot of time spent working, so you'd better look forward to doing that second job.

"The only way to avoid burnout from this 'round the clock' working schedule is to enjoy the work that goes into your side hustle as much as you enjoy all of the things you've sacrificed to get your side hustle going," says Michelle Dees, who turned her Guinea Pig Owner side business into a full-time job.

Set goals

In addition to setting short- and long-term goals, add smaller weekly and monthly milestones so you see progress and spot trends.

"Did you plan on selling five products this month? Did you plan on making 10 pitches this week? What was the total website traffic last month compared to this month? says Aleka Shunk, who started her food and recipe website, Bite Sized Kitchen, as a side business four years ago. "Seeing your sales, traffic, job opportunities, etc. slowly but steadily increasing is vital to keeping you pushing forward."

Start small and validate

Avoid overspending or going into debt to fund your side business by testing your concept on a small scale first, perhaps with friends and family.

R.J. Weiss, founder of side-hustle blog The Ways to Wealth, notes that the quicker you go from the big idea to earning money, the quicker you'll get the feedback you need.

"I recommend people consider the option that gives them the best chance to make $100 this month. Then, put together a minimum effective product or service that allows them to make that $100," he says.

Hire freelance help

Reluctant to spend money on your side business before you're earning from it? Don't let that stop you from paying freelancers for tasks that require skills you lack. Initially, that could be a logo design or website copywriting. To find the right talent, ask friends or colleagues for freelancer referrals, or search project work sites such as Upwork or Fiverr.

"Determine which things in your job are the most tedious and taking up a large chunk of your time. Can these be hired out? Do they all need your expertise to get done properly? Most of the time, the answer is no," says Shunk, who wishes she hadn't waited two years to hire a content writer.

Just do it—but do it right

Analysis paralysis is real, but you have to take action to realize your dream.

"Build a small following on social media. Start that Etsy shop. You'll figure it out as you go along," says Nick Rowan, whose side hustle is Tiny Workshops, a website for creators.

Consult with an attorney, so you set up your side business appropriately. "An LLC may be perfect, a corporation may offer better tax advantages long term, or you may just need a sole proprietorship, but the key is setting yourself up at the start to avoid mistakes," says entrepreneur and investor Drew Laine.

Make sure you're not breaking any of your employer's rules, too, cautions Tyler Read, who started personal training company PTPioneer as a side business. "Check your employment contract and make sure it doesn't have any restrictions on freelancing or running your own business," he says.

Expect to make personal sacrifices and maybe even a few mistakes. But if you learn from challenges and persevere, your side business could blossom into a full-time endeavor.

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Sandra Beckwith

About the Author

Sandra Beckwith

Sandra Beckwith has been writing for traditional and online publications since she sold her first magazine article while… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.