Is Starting a Side Hustle Really Worth It?

Do you want to make more money? One of the popular ways to increase your income is to start a side hustle. Today, more than one in every three Americans reports having a side hustle outside of their day job to generate additional income. Typically, people who invest in a side hustle are looking to earn more than their 9-to-5 salary provides, as well as build a financial cushion. With a potential recession on the horizon, job security is at stake, and having a nest egg is one way to prepare for the worst-case scenario. Even so, building a successful side gig isn’t easy. It takes time, effort, and a lot of energy to commit yourself to more than one job and to do both well. For those of us who are already drained by the day-to-day, but seeking more financial security, how can we determine if starting a side hustle is worth it, let alone what kind of side hustle to start? To help answer those questions, I interviewed two women who are thriving in this area: Jannese Torres-Rodriguez, a money expert who helps Latina women create additional income streams and build wealth, and Arnita Johnson-Hall, a serial entrepreneur and the founder of AMB Credit Consultants, who’s helped hundreds of women start a side business. Based on our conversations, here are five things you need to build a side hustle that will offer you returns worth your time. 1) Know why you’re starting a side hustle. Do you want to increase your income to have more money to pay off debt, boost your emergency fund, or invest? Do you want to use the money to help you achieve specific short-term goals? Do you want to build a business that will eventually turn you into a full-time entrepreneur? Both Johnson-Hall and Torres-Rodriguez mentioned the importance of identifying the driving force behind your decision to start a side hustle. Understanding your “why” and keeping it top of mind will help you deal with the day-to-day challenges of starting and maintaining your side gig. It will also help you narrow down potential options, and eliminate the ideas that don’t make sense for your situation. “If your goal is to start generating short-term cash to meet short-term goals, then the gig economy is a great place to do this,” Torres-Rodriguez told me. “You can download apps like Instacart or Uber, and start doing those things on the side when you have free time. Then use that money to accomplish whatever those short-term goals are. “But if you have a valuable solution to a problem, or if you’ve created an awesome product that you want to share with the world,” she added, “then you need to start thinking about how you’re going to make your idea more sustainable, and take appropriate actions to put your business idea out there.” 2) Be clear on your skills and interests. It’s typically best to offer services or products in a field you’re already knowledgeable and experienced in. Johnson-Hall started her side hustle, which is now a million-dollar business, while earning $12 an hour in her day job in the insurance industry. Her salary was so low that she qualified for government assistance. After seeing her credit regress from good to bad, she dedicated some time to educating herself on how to repair it. This was the foundation for her big idea: a business to help people improve their credit profiles. Torres-Rodriguez also built a six-figure income by expanding her area of expertise beyond engineering and turned her passion for cooking into a highly popular food blog. Today she has 10 income streams, one of which is teaching others how to make money as a blogger. “Look at your professional and personal skillset and see which things on those two lists you would want to think about pursuing,” Torres-Rodriguez said. “If there is something that you’re good at and have taught people in your personal life, that’s something to think about.” Building an additional income stream via a side hustle is challenging for most people because it requires turning an idea into an income-generating activity. Make it easier for yourself by choosing something in your current field or passion area. Ask yourself: What’s something I’m willing to spend a lot of time and energy on? What do I care about most in and outside of work? 3) Do your research and develop a clear message of your offering. The mark of a successful business or product is its ability to meet a need, serve a community, or solve a problem. Before pursuing your idea, do the research to make sure that your idea is doing at least one of these things. Ask yourself three questions: What are the minimum resources it will take to get started and test out my idea? Who is the target audience for my business, product, or service? Which needs or problems am I looking to solve for them? If you can’t answer these questions, then it may be time to go back to the drawing board. Johnson-Hall said that if you’re clear on the value your idea will provide, it’s also essential to brainstorm how you’ll communicate with and reach your target audience. As an entrepreneur, you’ll need to put on your marketing cap and consider what images and language will appeal to potential customers — your idea won’t get off the ground if no one knows about it. As a part of your research, ask: Where does my target audience spend their time? How do they communicate with one another? What platforms can I meet them on, or potentially get the word out about my idea or product? What formats or messaging most resonate with this group? Do they respond most to humor, intriguing visuals, research, newsletters, video, etc? Plan to meet your audience where they are already at. 4) Start small. Often people refrain from starting a side hustle because they’re under the impression that you need a significant amount of money to start. But Johnson-Hall and Torres-Rodriguez encourage their clients not to over-invest in the beginning. “Start with what you have. The most common thing people think when starting a side hustle is: ‘I must have a website, a logo, etc.’ But I didn’t have any of that,” Johnson-Hall said. “I wasn’t afraid to work with what I had, which was my laptop, paper, a printer, and my knowledge.” Johnson-Hall started sharing her knowledge with people for free until someone she helped suggested she turn it into a business and started sending her referrals. Torres-Rodriguez took a similar stance. “If you haven’t made any money on your idea yet, you probably shouldn’t be investing in forming a business entity,” she said. “Test out your ideas first, figure out what works, and do it consistently. Once you start making a little money, then start thinking about things like formalizing your business structure, investing in software, upgrading your equipment, and hiring help.” Most businesses take a couple of years to turn a profit, but social media can be a great place to test the waters, market your services or products, and gauge potential interest. Pay attention to how people respond and use the data you gather to adjust accordingly. 5) Be patient, and know when to pivot. The first side hustle or business you start might not be the one that generates the money you want. That doesn’t mean you can’t learn from it. Any chance you take will provide you with invaluable lessons, resources, and connections to support you in your next venture. As a case in point, Torres-Rodriguez tried a side hustle as a chef before starting her food blog. However, after testing it out, she quickly realized that a professional kitchen wasn’t for her, due to the physically taxing work, long hours, and low pay. Her next venture was to start the blog, and even then, it took her two years to turn a profit. During the time, Torres-Rodriguez educated herself on SEO strategies to increase traffic to her site and build the content that would attract more visitors and help her monetize. Had she given up after her first try, she wouldn’t have enjoyed the six figures in passive income the blog generates today. “I think it’s just important to set realistic expectations when you’re first trying out a side hustle,” she said. “If you can honestly say that you’ve tried everything, taken a course, learned everything you could about this topic, and it’s still not working — then it’s important to admit that this is not what you’re meant to do. Each failure will come as a lesson and help you see what works and what doesn’t.” Should you turn your side hustle into your full-time business? When your side hustle is profitable and helps you meet your financial goals, you might consider doing it full-time. For example, Torres-Rodriguez originally worked as an engineer. But, after a few years, once she had built her side hustle into an income-generating venture, she decided to resign from her day job. If you’re interested in becoming a full-time entrepreneur at some point, set some financial goals before you make the leap. “I wanted to be able to fully replace my engineering salary, which was about $118,000 by the time I left,” Torres-Rodriguez said. “In 2020, my business made $85,000 after taxes and expenses. By January 2021, I had earned $25,000 to $30,000 in side hustle income.” Before leaving her 9-to-5, she had built her emergency fund, paid off all her debt, opened a solo 401k to continue to invest in her retirement, secured her life insurance policy, and moved to her husband’s health insurance plan. “Everything was set up so that when I gave my notice, I was walking into a stable situation. I knew the decision wasn’t going to stress me out. I didn’t want to have to figure out how to build the plane while flying it,” she added. Being over-prepared gave Torres-Rodriguez space to entirely focus on her new business. During her first year as an entrepreneur, she quickly exceeded her earnings expectations. You may decide that you don’t need to have everything in order the way she did before taking your side hustle full-time but being financially prepared will give you a better chance at success. On the other hand, if you love your career and do not want to become a full-time entrepreneur, it’s perfectly okay to keep your side hustle as an additional way to generate income beyond your 9 to 5.

Is Starting a Side Hustle Really Worth It?

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