Perhaps you’d like extra spending money or to pay off your debt more quickly. If so, you’re not alone. The gig economy is booming—50% of millennials (and a total of 44 million Americans) now have a side hustle.
But is a side hustle right for you?
Despite the promise of greater financial freedom, flexibility, and a #blessed life, side hustles aren’t always a magic bullet for success. Here are a few questions to ask yourself before diving into the gig economy.
What is the earning potential for your side gig?
On the surface, a side gig may seem like a great way to turn a profit. However, the reality isn’t always so bright.
A whopping 85% of gig workers earn less than $500 per month from their side hustle. Depending on your financial goals and time commitment, the math may not work out in your favor.
The key is to identify what side hustle you’re interested in and answer questions like these:
- Are there many competitors near you?
- Is there a good market for your services?
- How much time can you commit?
Keep in mind that there may also be hidden costs to running your side hustle. If you drive for a ride-sharing service, for example, you have to consider the added cost of gas and maintenance for your car over time. Those expenses can quickly reduce your profit margins.
Do you have the resources?
A side hustle might appear perfect on paper, but if you don’t have the right resources, you may struggle to make it work. Depending on the gig, you might need any of the following:
- Capital investment for inventory
- An office or coworking space
- An advertising budget
A high number of side gigs demand a decent tech infrastructure, too. For most types of online gigs, you’ll need a reliable mobile device or laptop, as well as strong internet—the fastest options can take download times to mere seconds.
Before taking on a side hustle, be sure to evaluate what resources you need. The cost or commitment may turn out to be more than it’s worth.
Does your side hustle compete with your main employer?
If your gig is in the same field as your primary employment, things can get dicey fast. Before jumping in feet first, make sure your business doesn’t compete with your employer.
Here’s how to avoid any sticky situations:
Review your contract (specifically non-compete clauses) to identify potential pitfalls or conflicts of interest.
Avoid working with clients who could be viewed as competitors to your employer.
Talk to your boss about your plans ahead of time to find out if there are conflicts that you might not be aware of.
If you’re tackling an unrelated project, the main concern is to be honest with your time. Don’t use company time to work on your side hustle or let the gig interfere with your performance on the job.
By taking these few steps at the beginning, you can save yourself a lot of headaches down the road.
Are you excited?
Finally, get real with yourself. If you’re currently working a full-time job, adding a side hustle should be exciting enough for you to commit your precious free time.
While this doesn’t mean it has to be your passion, finding work that you enjoy or find fulfilling can help you stay the course so you can ultimately be successful.
By asking these tough questions in the beginning, you’ll guarantee your everyday hustle is a success.