Matt is a twenty-five-year-old graphic designer living in Chicago who makes $55,000 per year at his full-time job. He loves his coworkers and the vibe at his company and has no plans to leave. But one thing most of his coworkers don’t know is that Matt makes an additional $200,000 a year from his side hustle—a dog-walking company that he launched three years ago while still a student.
Matt started walking dogs for $5 a walk as a way to make some extra money in between classes after seeing a posting on a school message board. He was walking up to ten different dogs each week, but as more people moved into his neighborhood, he started to attract more business than he could handle. To satisfy demand, Matt set up a limited liability company (LLC) and hired a few other students to walk dogs as well. Now he’s making four times what he earns at his office job just from this simple business idea.
Matt is also saving a ton of money because he pretty much lives like a student. He still lives in the apartment he had in college and invests almost 100 percent of the profit he makes side hustling. Making $55,000 and saving 20 percent of his salary per year ($11,000) at a 7 percent annual growth rate, Matt would have needed about thirty-three years to hit his $1.5 million number. And as you know, after thirty-three years, he’d actually need a lot more than that to retire. But because of his side hustle, Matt’s currently on pace to have $1.5 million saved by the age of thirty (in just five more years).
In the last chapter, we talked about how to optimize your day job, but if you want to make a lot of money quickly, you need to diversify your income streams by developing one or more side hustles—moneymaking ventures outside of your full-time job. In this chapter, you’ll learn how to pick, start, and grow profitable side hustles that can help expedite your journey to financial independence.
It’s one thing to make a few extra bucks on the side so you can go out to a nice dinner or buy a nice pair of shoes, but if you want to reach financial independence as quickly as possible, you’re going to need to up your side-hustle game. You need to move beyond simply trading your hours for a limited amount of money and transition to thinking about side hustling using the enterprise mindset.
The enterprise mindset requires looking for as many opportunities to make money as possible, which means investing all the money you make. You need to put your side-hustle money in investments so it can work for you. Every side-hustle dollar you invest reduces the amount of time it will take to hit your number. It would have taken me at least two to three times longer to reach financial independence if I hadn’t invested almost 100 percent of my side-hustle income.
|
Monthly Side Income |
Annual Side Income |
25x multiplier (reduces your number) |
30x multiplier (reduces your number) |
|
$250 |
$3,000 |
$75,000 |
$90,000 |
|
$500 |
$6,000 |
$150,000 |
$180,000 |
|
$1,000 |
$12,000 |
$300,000 |
$360,000 |
|
$1,500 |
$18,000 |
$450,000 |
$540,000 |
|
$2,000 |
$24,000 |
$600,000 |
$720,000 |
|
$2,500 |
$30,000 |
$750,000 |
$900,000 |
|
$3,000 |
$36,000 |
$900,000 |
$1,080,000 |
|
$4,000 |
$48,000 |
$1,200,000 |
$1,440,000 |
|
$5,000 |
$60,000 |
$1,500,000 |
$1,800,000 |
|
$6,000 |
$72,000 |
$1,800,000 |
$2,160,000 |
|
$7,000 |
$84,000 |
$2,100,000 |
$2,520,000 |
|
$8,000 |
$96,000 |
$2,400,000 |
$2,880,000 |
Side hustling is great because you can make money—sometimes a lot of money—doing pretty much anything. You can mow lawns, walk dogs, shovel snow, babysit, make deliveries, or chauffeur people. You also no longer need to be present to start a side hustle, since making money online has never been easier. You can code online, tutor, launch a blog, flip products on eBay or Amazon, participate in focus groups, or do an infinite number of other things. But few people use side hustling to its greatest potential, which is all about making a lot of money and then investing it to make it grow. If you are making money on the side, but not investing it, then you are wasting time by not making nearly as much money as you could.
While I had always had side jobs growing up, it wasn’t until 2010 that I really started side hustling seriously solely so I could have more money to invest. Before that point I would have just spent the extra money (which is why I was broke at twenty-four!), but once I learned about the future value of money, I was hooked. At the time, I was working at the small digital marketing agency making $50,000 per year. On the side I was spending most of my free time (about forty additional hours a week) making as much money as I could doing (mostly) things that I really enjoyed, like:
Building websites for law firms. My first project was a $500 gig I found through Craigslist, and three months later I sold a $50,000 project using the same template! One lawyer introduced me to another, and I never had to do much selling, since my business came mostly through referrals.
Flipping domain names. This was definitely my most profitable side hustle. Domains are the real estate of the internet and are still significantly undervalued in my opinion. I was able to buy a lot of social media, legal, money, and education-themed domains early in domain auctions. I routinely was able to buy a domain for less than $50 and resell it within a year for $2,500 plus. That’s at least a 4,900 percent return on my investment. Of course, not all domains sell for that much or at all, but overall, it’s been the perfect side hustle, and I’m still doing it! I own over 800 domains as of this writing, and they are just getting more valuable. The average price for a mid-tier domain has jumped from $400 to $2,500 in the past three years alone.
Running digital marketing campaigns for law firms and real estate agents. In addition to building websites for law firms and real estate agents, I was also able to command up to $500 for any qualified lead I was able to capture for them through my ad campaigns. At one point I thought hard about scaling this business, but I didn’t enjoy it enough to do so.
Doing search engine optimization projects. I really love SEO because optimizing websites to rank on Google is both an art and a science. SEO is the compounding interest of digital marketing because the small adjustments and optimizations you make grow exponentially over time. It’s challenging, competitive, fun, and profitable. While SEO is more of a commodity now than when I started doing it, it’s more in demand than ever, and if you are good at it, you can make a lot of money. I’ve designed SEO strategies for hundreds of websites through the years and learned a ton that has also helped me grow MillennialMoney.com.
Flipping vintage mopeds and Volkswagen campers. I have been buying and selling both VW campers and mopeds since I was in college. I’ve sold more 1970s vintage mopeds than VW campers, but when I find a good deal on a camper, I don’t hesitate. I love VW Westfalia Campers from the 1970s and 1980s and have owned two over the past ten years. They have gone up quite a bit in value over that time and keep going up!
I also did a bunch of miscellaneous things like selling concert tickets, watching my neighbor’s cat, reselling high-end office chairs, writing white papers (detailed or authoritative reports), doing research, and even babysitting occasionally. No job was too small.
I was always looking for ways to make more money, and most of my investment gains have been made on money I made side hustling. It’s also worth noting that all of my side hustles were things I didn’t learn in school, need a college degree for, or have to work through another company to do.
There are two ways you can make money side hustling: you can work for someone else or work for yourself. If you are side hustling for someone else, the money you can make will always be limited by the number of hours you have in the day. It’s really tough to get off your nine-to-five job and hop in a Lyft to drive all night. Sure, it gives you flexibility and freedom, but no matter how much you drive for Lyft or deliver for Postmates, you’ll always be limited to your own hours and will make only as much money as those companies are willing to pay you. In other words, these gigs are not scalable.
Working for yourself allows you to make a lot of money doing something that you love and gives you more control. Matt could have easily worked for someone else’s dog-walking company and made $10 per hour, but by launching his own company, he gets to make money, not only on the time he spends walking dogs, but also on the time his employees spend walking dogs. Then he invests it so the money grows even more. I’m not saying it’s not worth walking dogs for another company so you can invest a few hundred extra bucks a month; any additional money you invest will help you reach financial independence sooner. It’s simply not as lucrative as working for yourself.
When you work for someone else, you don’t set your rates, but if you start your own business, you can (at least to a point that the market will bear). For example, even if you’re a babysitter, you’ll earn more money working for yourself and establishing your own stable of clients than you will signing up with a day care or babysitting service. And over time you may be able to charge more because your clients will come to trust you and perhaps you can offer an additional service—like tutoring or prepping dinner for the family. Plus you will get 100 percent of the profit (minus any overhead) instead of sharing a portion with your employer. If you really want to make a lot more money, you can start hiring other babysitters to do the work for you and take a share of whatever they make. The point is, working for yourself gives you more control over your money and your time and the opportunity to grow your business if you want to.
If you want to make money side hustling, you need to evaluate how much time you are realistically willing to commit to it, because how much time you have will determine the types of side hustles you can launch. Some side hustles take a lot more time to get off the ground than others. For example, if you have an amazing idea for a new mobile app but you don’t know how to code, it’s going to take a lot of time to get that idea off the ground. But walking dogs in the evenings or on the weekends doesn’t require anything more than the ability to walk.
This doesn’t mean that if you’re busy, you can’t find time to side hustle. It just means that you should calibrate the difficulty of your side hustle based on the amount of time you have and also try to find more time.
If you want it badly enough, you’re going to find the time. If you tell me you don’t have enough time to carry out a side hustle, I’m going to ask you how much time you spend streaming TV shows per week, watching sports, going out with your friends, playing video games, or just lounging around. I’m not saying don’t do the things that you love, just if you look at everything you do in a regular week, no matter how busy you are, I’m sure you can find the extra time if you really want to make more money. Look at your calendar and look for areas where you could free up time. Remember you’re investing more time today to open up more freedom in the future.
Chris, one of the members in my community, reached out for advice on when he could find the time to start his side-hustle idea (which was actually a really good idea). He told me that he was the grand marshal of his local marathon, led a local runner meet-up, was on multiple nonprofit boards, volunteered as a tutor, played in a pickup basketball league, and was training for a triathlon, all while working a fifty-hour-a-week full-time job and raising two kids. The answer was simple: Chris needed to let a few responsibilities go (not his kids, obviously!). It all comes back to priorities and trade-offs.
One of great things about side hustling is you can go at your own pace, but realize that you should calibrate your expectations based on how much time you spend. Also note that your side hustle might require a lot of time to start, but then less time to maintain. Just because you are working every Saturday getting your side hustle off the ground doesn’t mean you will need to work every Saturday or Saturdays forever! Looking at Chris’s schedule, we were able to find eight hours a week for him to get started.
Cut back to the essentials. If something doesn’t give you joy and you don’t “need” to do it, then cut it out. I’m not saying you should spend all of your time working on your side hustle, I’m just showing you how you can find more time if you want it. It’s up to you if you do. There are going to be five primary areas in your life where you can free up more time, and here’s how you do it.
I’m not a morning person at all, but I never used it as an excuse, and the morning became and is still is my most productive time period in the day. I’ve found two to three extra hours in the morning to be prime working time because it doesn’t allow me to make any excuses as other priorities come up during the day. You don’t have to get up at four A.M. or anything crazy like that. I’ll get up around five-thirty or six and get cranking. It’s quiet and I can watch the sun rise and focus on myself and my side hustles first. You might be thinking two to three hours isn’t much time, but two to three hours of really focused time in the morning before your partner or kids wake up really adds up. That’s an extra ten to fifteen hours a week, which is plenty of time to launch and grow a successful side hustle. The key is to really focus—turn off the TV, social media, everything—and get down to work. Schedule your morning time. Take it seriously and the investment each morning will compound over time.
The next best time to work on your side hustle is in the evenings, although it can be more challenging than working in the mornings because you’ve had a busy day and might be tired. But this is when you can really rally and spend some extra time on your side hustle. While it’s really tough to find extra time every night, even working for a few hours in the evening a few days a week will really add up. Instead of catching the game or going out for drinks with friends, spend time working on your side hustle. If you can, schedule this time in your calendar for the weeks and months ahead so you can commit to it. The more you prioritize yourself and your side hustle, the more you’re going to accomplish. There are also going to be those nights when you really get into the flow; those are the nights when you should ride it and stay up as late as you can. If you are feeling super productive, then stay up, but if you aren’t, then don’t force it. Energy preservation and management is key.
Weekends are prime side hustle time. Don’t waste them. Seriously, when I was twenty-four I realized that I was wasting a ton of time going out to boozy brunches every Saturday, which were not only expensive but took a lot of time, and I’d always need to take a nap when I got home! So in reality almost every Saturday I was using up seven to eight hours of time just for brunch. I cut back from brunch every weekend to once every two to three months, and instead on Saturdays I started waking up at seven A.M., walking my dog, and then diving into work until two or three in the afternoon. Then I took the rest of the day, and often the rest of the weekend, off.
Saturdays became my most productive day of the week. Sure, I could have rested or gone out with friends, but it meant more to me to work on my side hustles. Putting in at least eight hours per weekend on your side hustle adds up to over four hundred hours of additional time each year. If you really enjoy your side hustle, this won’t feel like work and you won’t feel like you’re sacrificing your Saturday. Also you don’t have to work every Saturday; even two Saturdays a month can make a big impact.
Once a quarter or whenever you want to do it without compromising your full-time job, take a vacation or sick day to work on your side hustle. These days are extremely valuable and you should take them when you need an entire day to focus on your business. For example, I know some people who take sick days when they are making a big push like the launch of a new website, course, or podcast, or implementing a big marketing plan. When you do take a sick day, get up early and use your day off as productively as possible—put in an eight-, ten-, or even fifteen-hour day that day to get the highest ROI for your time. I also know many people who use their remote-work privileges to work on their side hustle, since all their bosses care about is that they get the work done. Dedicating days like these to your side hustle can really fast-track your progress.
Then there’s all those in-between moments when you can find an extra ten, twenty, thirty, or even sixty minutes here and there. It’s how you make the most of your commute or your lunch hour; it’s when you’re traveling, sitting in an Uber, or waiting for an appointment. If you can stay focused, these small blocks of time can also really add up. Whether it’s writing a blog post on your phone in the back of a cab or taking calls when you have a few extra moments, make the most of them to work on your side hustle. Or take twenty minutes to just breathe deeply and decompress, which might be the most valuable way to spend a few extra minutes. No matter how you spend your in-between moments, just be intentional. Make the most of it.
Even an extra hour or two here and there will add up. I’ve gone through this exercise many times with my coaching clients and members; they always end up finding at least an extra five to ten hours a week, and in some cases, an additional twenty or more hours extra a week they can use to build a side hustle.
I know you’re busy, but you can still make a lot of money with the extra moments you do have. No matter how much time you have, the key to making the most of your time is to focus on taking the steps and making the decisions that are going to have the highest ROI on your side hustle. Don’t waste time—optimize it. Focus on making and saying yes to the decisions that push you forward and no to everything else. Be honest with yourself. It doesn’t matter how hard you work, what matters more is how you use your time. No one is going to watch over your shoulder to make sure you’re working. You’ve got to want it.
Given that you have only a limited amount of time, the most lucrative side hustles are ones that generate passive income—that is to say, money you can earn without actively having to do anything. This is why scaling your business is so lucrative; it allows you to make money in your sleep (while your employees walk dogs, babysit, or whatever else). Passive income is amazing because it completely disrupts the traditional idea that you need to trade your time for money. You can build a passive income business with or without employees.
But passive income side hustles can be tough to build (there’s no such thing as free money, after all). Many will require significant setup time and then a solid marketing/sales strategy. A good way to build a passive income stream is by selling something that you spend a little time creating but that people can buy for a long time without you having to put in much (if any) additional work. A few examples of potential passive income ideas are building an online course, launching a drop-ship product on Amazon, creating an app, writing a book, or launching an apparel item. Then there are semi-passive income streams like blogging, since you make money on content that you previously published but don’t have to update. Most of my own blogging income comes from blog posts I wrote two or three years ago.
These types of businesses are great for early retirement because you can build a passive income business that generates enough or more than enough money to cover your monthly expenses—potentially giving you the ability to “retire” sooner or at least take a mini retirement of a few months or years to follow your passions. Remember that any amount of consistent stable recurring monthly income will reduce your number and could even cover your entire monthly expenses.
When evaluating passive income opportunities, focus on those things that people will always need, not just a fad. For example, people will always need to eat, sleep, get their dogs walked, find babysitters, get their lawns mowed, and travel from point A to point B. They will always want to be entertained, to learn, and to be inspired.
But any type of business can go out of business, so it’s really difficult to build a long-term sustainable passive income stream outside of rental income. The world changes quickly and so does demand; what people are buying today might not be what they buy tomorrow. There are many online businesses that were making a lot of passive income but then all went out of business when Google updated its algorithm and they no longer showed up in searches, or Facebook changed its newsfeed and they could no longer get traffic. Sure, these passive income sources might help you travel the world for a year (which you should definitely do if you want), but you might not be able to live off them forever.
But passive income can definitely help you hit your number faster, because not only is it additional money you can invest, but it also takes less of your time so you can spend the rest of your time making money in other ways (or just chilling out).
Another benefit of having a side hustle is that you can deduct many of the expenses of running and growing your side hustle, making it more cost-effective to get off the ground. The $100 you spent to build a website and print business cards is all tax deductible on your personal tax return. When you travel to a conference that aligns with your side hustle or have lunch with a potential client or collaborator, it’s tax deductible. As your side hustle grows and becomes more integrated into your daily life, there are many tax advantages to having an LLC (limited liability company). While you don’t need to have a formal company established to deduct expenses, there are limitations on the amount and types of tax deductions for something you do as a “hobby” as opposed to a business.
This is one of the many reasons you should consider creating an LLC to use for your side hustle. If you are at the stage where you are starting to make money side hustling and you are ready to take it more seriously, it is probably worth investing the money (typically about $300 to $400) to create your own LLC.
There are many benefits to setting up an LLC for your side hustle, including the ability to set up a business bank account, open a credit card to use for expenses, and build credit for your business. Having an LLC also gives you additional legal protections, helps you to separate and protect your personal and business assets, allows you to pay yourself a salary and manage employee and contractor expenses, and gives you more opportunities for tax deductions. It’s also a great branding and business-building opportunity, since you will be perceived as more legitimate to potential clients and customers. It also makes it easier to scale your side hustle if you decide to grow it into a larger business. So if you are planning to take your side hustle seriously, definitely set up an LLC and run all of your business expenses and income through it. It also makes taxes a lot easier!
Keep all of this in mind as you walk through the process of creating your own side-hustle ideas, which you are going to do next.
While I recommend you start with one side hustle so you don’t spread yourself too thin at first, because you are your own boss, you can test out a lot of different ideas to find one you really love and/or that makes you the most money.
While you can sell pretty much anything, you will probably sell either a product or a service—your own or someone else’s. But one thing to keep in mind as you explore new ways to make money is that ideas are a dime a dozen. I had the idea for Uber a full four years before the company launched, but why didn’t I become a billionaire? Because ideas don’t mean anything if you can’t or don’t execute them. As you brainstorm side-hustle ideas while walking through this chapter, be realistic about which side hustles you have the time, skills, and motivation to take on.
After coming up with a few ideas using the framework in this chapter, just get started. Don’t overthink it. You will figure it out as you go. Remember, you aren’t stuck with any of your ideas—you can always move on to another one if it doesn’t work. I’ve outlined four steps to help you choose your next side hustle.
To identify a new potential side hustle, you should consider what you are passionate about and what skills you have. While you can make money doing pretty much anything, it’s a lot easier to make money doing something you love or at least like. Not only are you more likely to stick with something you enjoy, but it also won’t feel like work. Sure, you can just have hobbies and do things for fun, but why not make money doing them if you can?
Think about what you really love to do and whether you can monetize it. Do you love crafting or making things? Samantha works as an account manager at a digital marketing agency during the day, and on nights and weekends she makes beautiful handmade dream catchers, which she sells for $50 online. One of Samantha’s dream catchers was recently featured in a prominent magazine, and now her waiting list has ballooned to six months. She’s in an amazing position and debating whether or not she wants to take her business to the next level and hire a few other people to build dream catchers with her. This is a great problem for Samantha to have—she’s making money doing something she loves and has the opportunity to grow the business if she wants.
Do you really love music? Maybe you should gig more, sell your beats, produce your friends, get a promotion gig for a local venue, launch your own promotion or management company or record label or music blog. Adam was so into music he launched a blog called Run The Trap that made $4,000 a month, allowing him to quit his full-time job in digital marketing and follow his passion to launch a music management company. He’s launched artists who have played Coachella and others who are touring the world. Now Adam is traveling around the world living his dream lifestyle and making a lot of money; he is well on his way to being financially independent by the time he’s thirty-five. This all started from a simple blog side hustle.
Do you like to write? In 2005 while working in the defense industry as a software engineer, Jim Wang started the personal finance blog Bargaineering.com. Because he loved writing, he kept at it on his own pace and slowly started making money, figuring out the blogging business as he went. Eventually he was able to make enough money to start blogging full time. Five years later, the blog was acquired by a public company for $3 million, and Jim immediately reached financial independence at the age of thirty-four.
Do you like to code? Brandon launched a Chinese-to-English travel translator iPhone app in 2010 as side hustle while working as a computer programmer. Once he built it, he was able to make about $500 per month in passive income for years. And while $500 might not seem like much, because it was passive income, it required almost none of his time, and Brandon invested all of his side-hustle money, which helped him reach financial independence at the age of thirty-two.
Do you really love traveling? Maybe you should launch a private custom travel company that helps people book custom vacations or consult with people who are trying to plan their dream travel experiences, or coach people on how to travel hack, or write a travel blog, or get a side gig marketing one of your favorite destinations in your city. Brian Kelly, aka The Points Guy, loved traveling so much that he started blogging about it, posting reviews of destinations, travel deals he found, and advice on how anyone can use credit card bonuses and airline points to travel for free. Now the guy makes millions of dollars a year to travel and write reviews and recently sold his blog for a reported $25 million. At the age of thirty-five he could retire at any time.
Do you really love connecting people? Tyler worked in technology sales and liked connecting with people so much that he launched a recruiting firm as his side hustle. In his spare time, he started finding his friends new jobs at companies his other friends worked for. The pay is incredible: Companies will pay Tyler 20 percent of the first-year salary of any employee he places with them. So if he places someone who has a $100,000 salary, he makes $20,000. This means Tyler could make an extra $5,000 to $15,000 per month pretty easily. The venture has been so successful that he now does it full time and the money easily covers his monthly expenses.
Now more and more of Tyler’s friends and connections are looking for new jobs and more companies trust Tyler to find good talent. He’s absolutely crushing it. And he can work from anywhere in the world, a perk that he takes full advantage of. A few months ago he worked from the base camp of Mount Everest in Nepal and then jetted over to party in Hong Kong.
Next you need to think about your skills. The best side hustles are the ones for which you already have the skills required. Think about each and every skill you have as well as things you enjoy doing that could potentially be monetized. You probably already have skills that you don’t realize can be used to make money. You might be thinking about “skills” as something that you use for your job or something that you’ve been formally trained in or learned at school. But there are many kinds of skills that you can sell. For example, while you might not work in child care or education, you might be amazing at and love working with kids. What’s stopping you from babysitting or launching a day care center? You might be taking many of your skills—like driving or doing laundry or cleaning or cooking or landscaping—for granted.
Another effective way to start side hustling is to simply take the skills and expertise you’ve acquired from your full-time job and sell them on the side. I know many full-time lawyers, accountants, web programmers, digital marketing managers, editors, copywriters, and designers who sell the same services they perform in their day jobs on the side. This is a great way to make extra money and help people who might not be able to afford the premium prices your big law firm or digital agency charges.
Before you do this, of course, you need to make sure your company doesn’t have a conflict of interest policy that restricts your ability to take on outside work. Many companies allow you to take on outside work as long as it’s viewed as noncompetitive—meaning it’s not a service for an industry that your company serves or works with, nor is it directly for a competitor. If your employer does have a strict policy that restricts your ability to do side work, sit down and explain specifically how and why you want to make money on the side and why it’s not a conflict. Your company might grant you a provision, or if they don’t, you should seriously consider moving to a company that doesn’t restrict your ability to make money in other ways.
I made most of my own side-hustle money selling digital marketing and website design services to companies that either couldn’t afford to work with the digital agency I worked for or that my company wasn’t interested in working with. So while my agency was working with hotels and car companies, I was working with local law firms, doctors, and real estate agencies on the side. Same services, but instead of the money going to my company and the partners, it all went to me.
As you think about side-hustle ideas, consider specializing in a particular niche. While doing so will limit those you sell your services to, the benefits of niche specialization tend to outweigh the risks.
While I could have built websites for anyone, I purposefully focused on law firms and Realtors. In my nine-to-five I worked only with universities. Focusing on only a few niches made it easier to get referrals, build connections, and position myself as an expert in those industries. Many people spread themselves too thin and try to get clients anywhere they can, but the more specialized your audience and more money your target market has, the more money you can make. The most profitable consultants I know all have a niche focus and have worked hard to become an expert in their niche. One digital marketer I know, Trevor, serves only Canadian orthodontists; he got hooked in with the primary association they all belong to and has an insanely profitable business as the expert on digital marketing in that niche.
No matter what niche you pick, it’s never been easier to sell your expertise online, either in the form of one-to-one consulting services, group consulting or training, or other formats like online courses. Just as in your full-time job, the more valuable and in demand your skill set, the more money you can make selling it as a side hustle.
This is also an easy first step to becoming a full-time entrepreneur, since you could realistically sign up enough side clients and start making enough money to launch your own full-time venture. This happens all the time in many industries. So take stock of the skills you are getting paid for in your full-time job, and if you like doing the work, or at least like doing it enough so you will stay motivated to do it outside of your full-time job, it’s a great place to start side hustling as well as make new connections.
Side hustling can also be a great way learn new skills and pursue a new career in an industry that you have very little experience in. As long as you can add value and meet the needs of the person who is paying you, then you can sell your service to someone. Of course, you can’t sell something you know nothing about, but all you need to know is more than the person you are selling to and you can learn the rest as you go. There is nothing quite like a paying client to motivate you to learn how to do something.
This is how I learned how to build websites. While I knew basic HTML, I was able to learn how to build WordPress, Drupal, and Joomla websites for free on YouTube. It took me only a few weeks to learn, and I was getting paid to do it. You can learn almost anything on YouTube now. You no longer need a degree or formal training for many industries. There are many free or inexpensive online courses on literally anything, making it easier to acquire and master new knowledge. It’s never been easier in history to rapidly learn new skills and use them to make more money. Your success isn’t guaranteed just because the information is available, but two things will make it happen: curiosity and focus. We’ve entered the era of lifetime learning. The more you learn, the more money you’ll make. Always keep learning.
No matter what you want to learn, find someone who needs that skill, sell it to them, and keep filling in your own knowledge gaps. This is an awesome way to build up skills and experience and test out a new career track without having to go back to school or dive into a full-time job.
Think about what you love doing—everything you love doing. Your hobbies, your passions, and your skills. Look at your skills in and outside your full-time job.
Can you get paid for any of them?
Could you launch a course teaching other people how to do it?
Could you sell it locally?
Grab a piece of paper or open a spreadsheet and create two columns. In one column, list all of your hobbies/passions, and in the other, list your skills. Then narrow down the skills list by crossing off skills you don’t enjoy. If you notice overlap between the two lists, start with those ideas that allow you to combine your existing skills with your interests. If there isn’t any overlap in the lists, start with your skills first and then work to build the skills required to make money on your passion. Here’s an example to show how it works.
Kyle is a twenty-six-year-old marketing manager at an engineering company. While he makes decent money at his full-time job, it’s really not his passion and he doesn’t want to work there forever. He wants to start a side hustle in which he can make some additional money and do something he loves. His dream would be to be his own boss so he could travel more, so his goal is to find a side hustle that has full-time potential. Here’s a list of Kyle’s hobbies/passions and skills.
|
Hobbies/Passions |
Skills |
|
Design |
Excel |
|
Electronic music |
Writing |
|
Traveling |
Copywriting |
|
Running |
Editing |
|
Volunteer tutoring |
Facebook advertising |
|
Cooking |
Photoshop |
|
Reading |
Outdoor survival skills |
|
BASE jumping |
|
|
Mountain climbing |
|
|
Microbrewing |
Looking at the two lists, you can easily see there is some alignment between his hobbies and his skills, which makes selecting a potential side hustle much easier. For example, Kyle loved design and has Photoshop and copywriting skills, so he could start doing freelance design work for local businesses or through an online freelance marketplace like Upwork and then use positive client referrals to grow his business. He could also combine a few of his other passions by doing some design work for a microbrewery. You can also see overlap in Kyle’s love for mountain climbing and BASE jumping with his outdoor survival skills, as well as design and marketing. If he is really skilled at climbing, he could start leading trips or launch (and market) his own company that organizes mountain trips and excursions.
In addition to the skills he already has, when Kyle launches a business he will likely learn other skills like business accounting, contracts, and negotiation, which he can then market on their own. One of the best benefits of side hustling is that you can use the opportunity to learn while you’re making money, increasing the number of skills that you can monetize. Remember that skills are future currency and will make you more valuable and give you more ways to make money in the future.
Now that you have a list of potential side hustles, the next step is to narrow them down to the ones that can make you the most money. This starts with looking at market demand. The higher the market demand for your service or product, the more money you can make. Market demand is determined by supply and demand, or the number of people who want to buy something (customers) and the number of people selling it (competitors).
In Matt’s example, he was able to make a lot of money because the demand was high and growing (a lot of new people with dogs were moving into the neighborhood) and the supply was low (there weren’t enough dog walkers servicing the area). He saw the market opportunity.
Matt also recognized that most of the other dog walkers in the neighborhood were like him—just one person working with a few clients. If there were a bunch of dog-walking companies in the neighborhood, then he wouldn’t have had the same opportunity. But there weren’t any big competitors and he also had something that a company trying to get into the neighborhood didn’t have: connections with many of the local tenants, who ended up connecting him with other people they knew who needed a dog walker.
Before you start any business, you should analyze and understand market demand, because if people don’t want what you have to sell or too many other people are selling it, then you won’t make any money.
When it comes to something like dog walking, you are competing mostly on price (as opposed to the type or quality of service being offered), and when you are competing on price, people often choose the cheapest option. Thus every dog walker ends up making less money as more dog walkers enter the market. Anyone can walk a dog, so the amount you can charge is limited. Sure, you’ll be able to get a few jobs mowing lawns or shoveling snow or babysitting, but it will be a lot tougher to compete and build a business in these markets.
If a market is too competitive, you aren’t going to make much money unless you offer something your competitors can’t. This doesn’t mean you can’t make money in this market; it just means that you will need to find a way to add extra value so people will choose you over your competitors and/or pay more for your service. For example, with a dog-walking company, you could walk earlier in the morning or later at night than your competitors, or you could offer longer walks, grooming, boarding, or training sessions (if you have that skill).
There is one exception to the rule of supply and demand: people are willing to pay more money for your service when they already have a relationship with you. Business is about relationships. If people trust you, they will buy from you. This is why you should start your side hustle in your community or work to build relationships in online communities. No matter what side hustle you want to launch, you are going to have an easier time selling into a network you are already a part of and with people you know. It’s all about the referrals and positive references.
This is why an early mover advantage for Matt was so essential. He already had relationships in the community. When you are first in a market, you can build relationships that will be difficult for another company to replicate after you have already gained traction. This is where Matt really excelled—he saw the market opportunity and moved quickly to build more relationships using his existing referral network.
Sure, there are now other dog-walking companies in Matt’s neighborhood, but he has more business than he can handle through word of mouth and a few simple promotions. Matt offered a free dog walk to anyone who referred him to a new client. All it took was a couple of existing clients referring him to other potential clients on their local community or building message boards. Because the demand is so high and his reputation is strong, he doesn’t have to do any marketing.
It’s also worth noting that busy people are typically willing to pay a lot of money just to take tasks off their plate. So if you or one of your current or former clients can convince them you can solve their problems, then they are less likely to check with competitors before they hire you. Many people have made a lot of money offering a simple service to people who have money and are too busy to do it themselves.
As you build your side-hustle list, think about who will buy your product. If you think you can make money on it, then just get out and start trying to sell it. The market will tell you if there is demand because people will either buy from you or they won’t. Since most side hustles won’t involve a whole lot of capital to start, you can just launch it and see where it goes. I don’t recommend new side hustles where you have to spend a lot of money or need to buy expensive tools to start. Keep your up-front investment as small as possible. There is little downside to testing out new moneymaking opportunities when all you are trading is a little bit of your time.
If you are launching an online product or service, then an online survey is essential. If you don’t already have an online audience/community, focus on building the community first. It’s extremely hard to sell an online product without an existing audience. As you build your community and connect with others, send them a simple survey to gauge their interest and test your product or service idea. You will learn a ton from asking people what they think about your idea and if they would buy it from you.
Another benefit of asking people for feedback both online and offline is that because they have already engaged with you, they might be interested in buying from you. Once you start asking people for feedback, the people who want to buy will step forward. If they trust you, people will also start recommending you to others they think could benefit from your service or product.
It’s also worth trying to find someone who has already built a successful business like the side hustle you want to start. Seek out people who’ve already done it and learn everything you can from them. It could save you years of time. There are many older successful entrepreneurs who would love to get coffee or grab lunch with you and tell you about their experiences. Depending on the type of side hustle you want to launch, you could even reach out to a potential competitor and offer to intern for a few months to learn about the business.
Another great way to analyze market demand for almost any type of product or service is by using Google Search data. Because so many people use Google Search, by analyzing Google Search patterns you can get a statistically valid analysis of market demand across almost any geographic area in the world. If you want to launch a dog-walking company in Syracuse, New York, take a look at how many people are searching for “dog walking” or “dog walker” on Google in that area. Look at how the search volumes are changing year over year. Is demand going up or going down? While you won’t be able to access all of the data unless you are a Google advertising client, there is a free version that will give you enough info to get started. Simply search for the Google Keyword Planner tool.
In addition to analyzing Google Search data, you should also take the time to look at who your competitors would be for each of your side-hustle ideas. Doing competitive analysis is essential—it will tell you not only who your competitors are but also how much they charge, what their specific services or products are, how they are marketing their products or services, and what they don’t do. I also recommend secret shopping with any of your potential competitors. Fill out an inquiry form on their website or call them. Ask them more about their services and what they charge. Get as much info as you can. It will all be useful intelligence as you build your own side hustle. It will help you figure out what to charge and what you can do differently from your competitors to stand out.
If there are tons of competitors and the market looks oversaturated, then you might want to pick another side hustle with less competition. Or be honest with yourself about what your unique value or differentiator could be. Why should someone buy from you instead of from someone else? Of course, not every side hustle needs to turn into a big profitable business, but simply realize that if there are a lot of competitors, it can be tougher for you to sell your product, and as a consequence, you might make less money. It can also be tough and expensive to reach potential customers in a market that is already super competitive.
If there is no one else offering what you want to offer, then either no one is willing to buy it or you’ve stumbled on a remarkably good side-hustle idea and might have an early mover advantage. No matter what your side-hustle idea is, the more you know about your competitors, the easier it will be for you to market and sell your own services. What is different about each of your competitors? How are their services different? Why can some charge more than others? What can you offer that is unique? All of this detective work will help you better price your own services and fees.
There are essentially six things that dictate how much you can charge:
The skill required to perform the task or your relative skill level as compared to your competitors
Demand
How much your competitors are charging
Added value (that is to say, any additional services or bonuses you offer)
Perceived value (based on your reputation or how valuable your offering is to the customer)
How much someone is able to pay (generally, people/companies with more money can pay you more). You’ll often make more money selling to people who have more money.
Let’s dive a little deeper into each of these.
First, the more in demand your skill set, the more you can charge for your service, since there are a limited number of people who can do it. You can charge more for website building than for dog walking, and if you are an especially talented coder, you can charge more than another coder for the same service.
Second, the greater the demand for what you are offering, the more you can charge. While being a dog walker is pretty easy, lots of people need dog walkers, so demand in many places is high. But demand is market dependent, meaning it’s dependent on a specific location, so the demand for dog walkers may vary greatly by city and neighborhood.
Third, how much you can charge depends on how much your competitors are charging. You can only charge so much more than your competitors, and you’ll need to add a lot of extra value to do so. Often when you are launching a new product or service, you’ll want to price lower than your competitors at first, in order to capture customers looking for a lower price. However, there’s risk in pricing your services too low, since it’s much easier to lower prices than raise them in the future. This is yet another reason why it’s so important to determine and communicate what makes you different from your competitors.
Fourth, you want to add as much value as possible. But this matters only if the client or customer can see that value. Making more money is not about how hard you work or how many things you get done or how busy you are. It’s about maximizing the perceived value of your work and doing it as efficiently (i.e., in as little time) as possible. The more valuable your clients consider your work, the more money you can make. Since people are the buyers, what they think matters most.
Finally, companies and people that have more money are more likely to pay you more for your services. The more affluent a neighborhood, the more you can make walking dogs. The bigger the company, the greater the resources they have to pay for your service. For example, a few months after I built a $500 website for a small law firm, I built a $50,000 website using the same general template for a large law firm. It actually took me less time to build the $50,000 website, but the larger firm had more resources at their disposal and they saw a bigger upside to having a nice website. The value I provided to both was the same, but the client who paid $50,000 perceived that value as greater. While intelligent pricing is an art and a science, you can get a good sense for what the market is willing to pay based on what your competitors are charging and by going out and selling. If all you get is pushback and can’t sell, lower your prices or realize that maybe you can’t compete.
Some side hustles are going to make you a lot more money than others, so it’s important to determine what your target rate per hour is. Just as when you calculated your real hourly rate in chapter 6, you’ll want to have a target hourly rate to shoot for with your side hustle. As you write down your ideas and analyze your potential competition, write down how much money you could realistically make for each venture. If you’ve valued your time at $20 per hour for your full-time gig, you probably want to get at least $20 per hour, if not more, for your side hustle.
I’m just going to come out and say it—most people who are side hustling, especially when they are first starting out, charge way too little for their services or products. Don’t undersell yourself. Sure, you want to have an attractive offer so you can sell your first few clients or customers, but after you’ve sold your first few, you should increase your prices.
One of the goals of this book is to help you make the most money for your time, so you should be charging as much as you feel slightly uncomfortable charging and what your customer feels a little uncomfortable (but not so uncomfortable that they walk away) paying. As one of my mentors once told me, “If the client isn’t pushing back on the price, then you aren’t charging enough.”
You should charge as much as the market is willing to pay, no matter what service or product you are offering. If it’s too high, people won’t buy, but if it’s too low, people might not buy either (because they perceive the value or quality of what you are offering as low). Or if it’s too low, you’ll have too many customers. In most cases, it’s better to have five customers paying you $20,000 each than five thousand customers paying you $200 each. In both scenarios you make $100,000, but it’s a lot easier to manage five customers than five thousand.
You want to price so you can control supply and demand. If you normally build three websites a month, but you feel like building only one website this month and there is demand for your service, see if you can double or triple your prices. If demand is really high, then you are in an awesome position and can charge whatever you think people are willing to pay.
Another way to price your services is based on a percentage of the growth in profit that you help drive. If you are selling a product or service for someone else, then you offer to charge based on the amount of profit you help drive or for a cut of the revenue. If you are confident in your services, you can offer to work for only a cut of the revenue or profit, so your clients pay only if you make them money, and the more you sell, the more money you make.
I once did some work for a Bluetooth headset company and charged them 20 percent of the profit that my ad campaigns generated, which ended up being really profitable for a few months until they decided to do it themselves! It’s definitely a pricing model worth considering if you are in advertising, marketing, or selling and have confidence in your ability to increase your client’s revenue. It’s higher risk but higher reward, and the sky’s the limit.
Now that you’ve got a great side-hustle idea, how do you actually get clients? While this depends on the type of product or service you are selling, generally the easiest way is to sell into the same community (online or offline) you surveyed to analyze market demand. If people already know you, they are much more likely to buy from you.
However, whether someone knows you or not, one thing can significantly increase your chances of making a sale—telling your story. At the heart of selling any product or service is your story. We are all human, and selling is all about connecting with people. The better and more someone connects with your story, the more they will trust the value and service you can provide them. Your About page is the most important page on your website.
Oh yeah—no matter what you are selling, you will definitely need a nice website. Don’t worry, you can create one easily with WordPress in about an hour. The better your website looks, the more legitimate you’ll be perceived to be and the easier it will be to sell your product. Your goal is to share your story with potential customers so they can both learn who you are and connect with you. Share a personal story about why you decided to start your business. What was your aha moment or inspired you to launch it? Why are you passionate about it? What is your goal or mission with the company? Also share some stories about connecting with your customers and what you’ve learned in running the business. The more personal you are, the more likely you will form a connection. Look at your competitors and write a better About page. There are far too many boring About pages, so showing your personality and passion will give you an advantage.
Don’t worry about selling to a lot of people at first. Just focus on selling your first client or first product. While you might launch the best product or service ever and immediately end up with more sales than you can handle, it’s more likely that you will have a tough time selling your first few clients or products. This is normal and actually to your advantage, since you will want to grow your side hustle at a pace you can handle. One of the worst things for a young business is to oversell and not be able to handle demand.
While it can be tough to sell your first client or first product, if you do it correctly, your first customers will be the most valuable customers you ever have. Selling slowly at first will help you do two essential things that can significantly increase the potential of your business having success.
You should always overdeliver for your first clients. Give them as much value as possible. Go above and beyond to make them happy, even if it takes a ton of extra time, because you want and need your first clients to be your references. Having a great reference will make selling your second client or product much easier. Your future customers will be more likely to buy from you if they can talk to a satisfied customer. The first website I ever built was for a lawyer in Chicago whom I found on Craigslist and used as a reference for the next two years. Just that one reference helped me sell over $300,000 in business. He was my first and most valuable client.
Your first clients can also provide invaluable feedback on your product or service, which can help you refine and improve it. Make sure to always ask for feedback on what your customer liked and what you can do better. Don’t forget to ask and always offer some small incentive—something for free to encourage them to share their experience! The better your product or service gets and the happier your customers are, the more money you’re going to make. Happy customers tell other people why they’re so happy, and before long you’ll have built a referral network that does the selling for you.
Another way to attract new customers is to partner with a business with which you align but don’t compete. For example, say you have a snow removal business. You can contact the local lawn-mowing or landscaping companies in your community who don’t offer this service. Build a relationship with them and create some exchange, whether monetary or otherwise, so that they will recommend your service to their customers. Leveraging other people’s networks can rapidly launch or grow your side hustle. Just tapping into one network is all you might need to significantly expand your side hustle.
You should consider scaling (growing) your side hustle if you have been able to consistently sell your service or product and have been making a profit for the past six months, or if the demand for your services or products has exploded quickly. If demand is higher than you can meet on your own, or if the demand is consistent and you don’t want to do the work, then you should consider hiring others to do the work for you. If demand is low or growth is slow, you should hold off on hiring anyone new, since the last thing you want to do is hire employees and then have nothing for them to do.
By hiring employees, you can shift from just selling your own time to brokering others’ time. The better your team is at doing the work and the more efficient they get, the more you can eventually charge your clients, and you will end up making a lot more money for doing absolutely no extra (and possibly even less) work. The more you can distribute the work, the less you have to work, and the faster you can grow your business.
If you do decide to scale, you can do it at your own pace; you don’t have to build a huge company unless that’s what you want. You don’t have to go out and hire a bunch of employees. In fact, I recommend that you start slow by hiring one or two contract employees, instead of committing a lot of resources to full-time salaries and benefits. Try to keep your overhead (employee costs) as low as possible until you’ve got a good handle on the economics and growth opportunity of the business. And when you do decide to bring on your first few employees, try to hire what I call “believers,” people excited about the opportunity and the business. Finding someone who actually enjoys the work and believes in your vision will be more valuable and helpful than just hiring an employee who just watches the clock. Not only are they likely to go the extra mile, they will stick with you as you grow and help drive more growth.
I also recommend you think hard again about what kind of life you really want and what trade-offs you are willing to make for money. The transition from being a solopreneur to being an entrepreneur is tough. As we’ve already discussed, there are many challenges to being an entrepreneur, and while you will still be the boss, having to hire and manage a team, as well as increase your sales to pay for your growing team, can add a lot more stress to your life than just managing yourself.
Having employees takes your responsibility to an entirely new level: you start feeling responsible not only for your own livelihood but also for the livelihoods of your employees and their families. That’s a lot of responsibility.
This was a massive transition for me. Going from employee to employer was a lot more work than I had anticipated, and it also pushed me away from the work I loved (building websites, marketing products, and competing at the forefront of digital marketing) to spending most of my time doing administrative and management work, like dealing with the complexity of human emotions in an office where people spend more time with their coworkers than their families.
But research shows that even when they work more hours, self-employed workers are actually happier, largely because when you work for yourself you have the freedom to innovate and you’re more engaged in solving challenges and growing your own business. The best thing about having your own business is that you can do whatever you want. You might want to grow your business to be as big and profitable as possible, or you might want to build what’s known as a lifestyle business, which is essentially a business that fits into your ideal lifestyle. Lifestyle businesses are about having an ideal balance of money and time, and they can give you the opportunity to hit your number faster and generate consistent cash flow to cover your monthly expenses (and maybe more).
Matt estimates that he could double the size of his dog-walking business, but he isn’t willing to trade more of his time to manage it. He’s got a good balance and is able to manage his full-time job and his side hustle and still have time to travel with his girlfriend. And he’s still on track to hit his target number of $1.5 million by age thirty.
Remember, side hustling is also about the time/money trade-off, so it’s up to you to decide how much time you are willing to trade today to make more money to invest in the future. Yes, you will need to make some sacrifices, but the size of the sacrifice is ultimately up to you. If you’re committed to creating financial freedom, remember the time you spend making money today can buy you much more time in the future.
You’re going to have to say no sometimes. You can’t expect to make millions of dollars watching Netflix or going out every night. When I was side hustling really hard, I turned down offers to hang out with my friends sometimes, but I still found time to chill with my homies. I just built it around my side hustling. Sometimes I even hired my friends to help or brought them along. The choice is ultimately up to you, but I have no doubt that once you start earning money side hustling and seeing it grow, it won’t feel like a sacrifice at all.