How To Start a Side Hustle: Tips and Strategies

At different points in your career, you may decide that you want to start a side hustle. The goal of a side hustle could be to earn additional income outside of your other jobs or responsibilities. You may also start a side hustle to explore a different career path or passion project and see if it can become your full-time job. Side hustles can bring in extra income while giving you the opportunity to develop new skills or monetize your hobbies.

Learn how to start a side hustle with this step-by-step guide.
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1. Identify your skills and interests

Starting a side hustle begins with identifying your skills and interests. Think about what you enjoy doing or what you’re interested in learning how to do. Your side hustle could be a skill you’ve already developed, a hobby that you think could earn money, or a skill that you want to learn and gain experience in.

Conduct a self-skills and interest audit. You’ll want to make three lists. The first list is all of the professional skills that you currently have. The second list is the skills that you’d like to learn (or are open to learning) and develop. The third list is your interests and hobbies.

This personal brainstorming session can help you be more objective. Evaluating yourself and what you have to offer can be more challenging than doing so for someone else. Write down all of the different ideas that you have; you can refine them later.

Knowing where to start can be difficult when you have a blank slate in front of you. While having options gives you freedom, it can also be overwhelming. These lists can help you see your strengths and narrow down opportunities that match your skills and interests.

2. Research market demand

Once you have ideas for the type of side hustle you want to start, you’ll want to research the market demand. Demand refers to whether or not people want or need your services and products. Conducting this market research is how you decide which idea to pursue further.

Researching the market will help you determine profitability and make sure that your idea has the potential to make money. Some ideas may have more promise than others depending on the demand and also the competition.

Side hustle ideas with high demand and low competition or that fill a gap in the market will have the most profit potential. While you can still make money if you have tough competition, you may need to spend more time marketing your services.

Conducting market research

The market research you’ll need to conduct depends on the type of side hustle that you’re interested in. Conducting market research will help give you an idea of what to charge if you get to price your services or what you’ll make if you’re interested in using an on-demand gig app.

If you’re considering freelancing on a platform like Upwork, you’ll want to check the average hourly rates for your skill and then see the job availability. Make sure that clients are actively looking for freelancers with your skill set.

Rather than offering a wide variety of services to clients, many freelancers find success by choosing a niche (specific skill or industry) and then working to position themselves as experts. Specializing can help with competition.

When deciding which on-demand gig platform to use, research which platforms pay the most and are the best to work for in your area. In-person gigs can be very location dependent.

Some apps may pay more than others. Depending on the gig, you may even be able to work for more than one platform and choose based on which one has a higher demand and payout that day.

Get advice on which platform to choose, see how much others are earning, and get tips for success from side hustlers on Reddit subreddits:

• r/couriersofreddit
• r/gigwork
• r/sidehustle
• r/uberdrivers
• r/lyftdrivers
• r/ubereatsdrivers
• r/doordash_drivers
• r/grubhubdrivers
• Search for a subreddit for your city or gig platform

You’ll want to research which gigs are available where you live and what they pay on average. Some gig apps let you join on the same day, while others may have a waitlist.

When starting a business, in-depth market research will be helpful. Depending on how you plan on offering your services or products, whether through your website or a platform, you’ll need to identify competitors and check the demand. You can do this through keyword research to see how many people are actively searching for similar services or products.

Social media and surveys are helpful resources for market research. You can use social media search features to find competitors and see what’s currently trending. Social media also allows you to conduct your own market research by creating and posting polls.

You can also collect this type of data through surveys. Services like SurveyMonkey or Zoho Survey allow you to create a survey that you can send for free to your target demographic yourself, or you can pay them to conduct the survey for you.

Tip: If you want to dive deeper into market demand and research you can shop Project Catalog for market research services that fit your needs and budget or hire a market research analyst.

3. Validate your side hustle idea

Before going all in on your side hustle, you can validate your idea by running tests. One of the main benefits of a side hustle is that you can do it alongside your day job or responsibilities.

A side hustle doesn’t always take off right away and become your primary source of income. You likely will need to grow your business, put in time in the beginning to set up workflows, refine your product or service, and then market it to your target audience.

Testing your side hustle first lets you know whether an idea is worth investing your time and resources. What your testing phase looks like will depend on the type of side hustle.

Ways to test your side hustle idea:

• Minimum viable product (MVP). Create the most basic version of your product or service that you can share with customers to validate your idea and improve based on feedback.
• Beta testing. Share your almost-finished product or service with a small group of early users to receive feedback and check for bugs and issues.
• Presales. Set up a landing page and let customers sign up for your product or service before it’s fully available to assess the demand.
• Pilot runs. Allow a limited number of consumers to purchase your service or product before you fully launch and scale to catch any production issues.
• Soft launch. Accept only a few customers at first to make sure that you can meet deadlines and have the right processes in place.
• Trial run. Try out a freelancing platform or on-demand gig app and only accept one or two clients at a time to find the right fit.

During the testing phase, you can collect and analyze feedback before fully investing. Use the feedback you get from customers and clients to make improvements, remove any bugs, and fine-tune your processes. You may need to adjust your idea based on this feedback. Document and analyze all of the feedback you get from your users and customers. This feedback is valuable and you can use it to improve and make adjustments. Be open-minded to making changes and listen to your audience. A simple change could make a difference in whether your idea works or not.

4. Create a business plan

Once you’re ready to go to market with your idea, you’ll need to create a business plan. Launching a side hustle is starting a business, whether you’re freelancing, working on an on-demand gig app, or selling products and services. A business plan will outline how you go from having an idea to making money and then break it down into actionable steps.

Before you start writing your business plan or hiring someone to help you, you’ll need to work out the basics.

• Describe your company and the problem your product or service solves for customers.
• Define who your target customers are and why they need you.
• Outline the SMART goals you want your business to achieve in the short and long term.
• Detail the resources you need to get started and how you plan on acquiring them.
• Determine how you can reach your target customers and market to them.

You can start writing your business plan after you have a better idea of who you are as a business and what you hope to achieve. Using a business plan template will help guide you through the process. What you choose to include in your plan depends on your business model.

Typical components of a business plan:

• Executive summary. Outline your company and the products or services you’ll offer and why it has the potential to be profitable.
• Products and services description. Detail the products or services you’ll offer customers.
• Competitive and market analysis. Summarize the results from your market demand research and testing.
• Budget. Determine the budget you have to invest in your business and any upfront costs.
• Marketing plan. Describe how you’ll market your products or services to customers.
• Operating plan. Specify the channels you’ll use to reach customers and how you plan on fulfilling orders, accepting clients, and meeting deadlines.

More resources for creating a business plan:

• How To Make a Small Business Plan
• How To Write a Freelance Business Plan
• How To Create an E-Commerce Business Plan in 8 Steps
• How To Write an Outstanding Service Business Plan
• The Best AI Business Plan Generators

‍Tip: If you need help developing a business plan, you can shop for business plans on Project Catalog or hire a business plan writer.

5. Address legal considerations and registration

Make sure you address legal considerations and business registration requirements before you start accepting orders and contracts. Working as an independent professional or contractor has different legal and tax implications than being a full-time employee. Income and other taxes will not automatically be deducted from your earnings when you work directly with clients, which means you’ll need to pay estimated taxes throughout the year.

When freelancing on a platform like Upwork or working on an on-demand gig app, you get paid typically through the company. You don’t need to worry about accepting payments. However, if you work through your own website or without a platform, you’ll need to be able to accept payments and may have to register your business first.

Depending on the business you’re starting, you may need to legally create a company like an LLC, get insurance, and set up sales and other taxes. The actions you must take to operate your business legally and remain compliant can depend on local laws where you live.

Tip: If you need help with the legal side of starting your business, you can hire a legal professional on Upwork.

6. Set up your side hustle

Once you understand the legal and compliance side of starting your business, you can set up your side hustle. If you need to register your company, you’ll need to choose a business name and then decide what type of business entity you are. Limited liability company (LLC) and sole proprietorship are the most common types of small business licenses.

The next step is to set up a workspace and gather all the resources and tools you need to start accepting clients and customers or shipping products. Decide where your business will operate.

If you’re working remotely, you can set up an area of your house that allows you to be productive. Make sure your backdrop is professional if you’ll be on-camera and meeting with clients over video calls.

If you need an office to meet with clients or to help you be productive, you can explore local coworking spaces in your area. Coworking or shared workspaces allow you to pay a monthly or daily membership fee to access their office space. You can often rent meeting rooms, have a dedicated office, or work in an open floor plan with other independent professionals and business owners.

Set up workflows and make sure you have the tools you need to be productive and efficient with your time. Keep in mind that your processes may not be perfect in the very beginning, but you can keep improving as you go.

When you “go live” and start accepting orders from customers, make sure that you can fulfill them and meet deadlines. Gather the resources you need and create a practical work schedule.

You may be tempted to accept every job from clients, but make sure you’re realistic about your workload to avoid burnout and maintain a high level of work quality. If you can only create a certain number of products at a time, make sure you limit the number that customers can purchase until you’re ready to scale.

7. Manage your time effectively

A side hustle is the work you do outside of your primary source of income by definition. This means you’re likely working another job or have another responsibility that takes up a significant part of your time. Managing your time effectively will help you balance working your side hustle with your other jobs and obligations.

You may work a full-time 9to5 job or have a caretaking role and decide to start a side hustle to make extra money. When working a side hustle, you want to make the most of the hours you have available. Maximize your productivity and efficiency during these work hours with time management.

When you have a busy schedule or many distractions around you, focus fragmentation is a common result. Instead of putting your focus into one task and fully committing, you spread your attention and multitask. While this is sometimes necessary, like taking a phone call when walking to the store, fragmented attention rarely leads to productivity and can even result in burnout.

Instead of multitasking, create a dedicated work schedule and assign yourself tasks each day like a manager would. Decide when you’re going to work on what and stick to it. When you’re actively working, minimize distractions and test different tools to help you be more productive.

Time management tips:

Time block. Decide what you’ll work on and dedicate a specific amount of time to it distraction-free.

Prioritize tasks. Organize tasks and to-do lists by priority and deadline, so you always know what you should be actively working on.

Set boundaries. Manage expectations with clients and customers from the start, letting them know when you’re available for meetings and questions and your typical response time outside these hours.

Minimize distractions. Put away your phone and block any distracting websites when you’re working.

Plan ahead. Create a schedule for yourself ahead of time, like the night before, so that you can start each day with a plan.

Delegate work. If you have the resources, hire freelancers to help with tasks you don’t need to be hands-on with.

Embrace AI. Explore using AI tools to be more productive and efficient in your side hustle.

Say no. Know when to decline new projects or jobs. You never want to sacrifice work quality to meet deadlines.

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Make sure to schedule time for self-care to help avoid burnout. Working for yourself, especially being remote, can make switching off work mode difficult since you don’t physically have to leave the office every day.

Emails, Slack messages, and other work tasks are always just a phone click away. Make sure that you have time every day when you’re not online or working. Respond to urgent emails and phone calls, but give yourself time off.

8. Plan your finances

Your side hustle may require an initial investment, especially if you plan on selling products and need to have inventory. Even if you have a service-based side hustle, you may have startup costs like building the service or creating and maintaining a website. Ideally, as you begin to make a profit, you can reinvest some of this into your business to help grow and expand.

You’ll need to make a budget and decide how much you’re able to invest upfront in your business. This will help determine whether you can hire freelancers to help with different aspects of your business. In your budget, determine what percentage of profits you’ll use to pay yourself, save, and then what you’ll reinvest.

The amount you decide to invest will depend on your financial situation. Financial companies generally advise that business owners reinvest 20% of their profits into the business. Don’t worry if you can’t do this right now; you can add it to your list of goals and wait until you have the financial freedom to do so.

Ways to reinvest your profits to help grow your business:

• Outsource tasks to freelancers
• Hire part-time or full-time employees
• Run paid ad and marketing campaigns
• Invest in new hardware or software to increase productivity
• Experiment with developing new products or services

Always track your income and expenses, so you know how much you’re making and what running your business costs. As an independent professional or registered business, you may be able to deduct these expenses from your revenue when calculating taxes.

9. Market your side hustle

Marketing is used to let potential customers know about your products or services. Unless you work on an on-demand gig app, you’ll need to create a marketing plan. Think about who’s most likely to need your services or products; this is your target audience. Once you’ve identified who they are, you can start researching the best ways to reach them.

When consumers need a product or service, they search for it online, either on a computer or through their phone. Digital marketing involves using these online channels to promote your products or services to your target audience. You can do this organically (unpaid) by creating content or inorganically (paid) by running ads.

Your side hustle will likely need to have an online presence. If you’re working on a platform or app, your presence will typically be an integrated profile. On Upwork, freelancers create profiles and portfolios that clients use to evaluate talent when they submit project proposals. Make sure you optimize your profile to attract clients and help these platforms and apps match you with relevant jobs.

You may also want to create social media profiles for your side gig, separate from your personal account. Consider whether or not your business would benefit from having a website. A business or personal website can give you more choices for marketing and be a valuable lead generation tool.

Marketing channels to explore:

Social media. Post about your side hustle and interact with potential customers in comments and direct messages. Social media is a free tool that can help you generate leads organically.

Networking. Attend in-person or virtual events related to your industry to grow your network. Meet independent professionals like yourself to share advice, support, and leads or find potential clients.

Content marketing. Position yourself as an expert in your industry with thought leadership content. Create content that is useful to your target audience to drive website traffic naturally.

Email marketing. Keep your target audience engaged with emails that promote your side hustle. Create gated content (requires contact information for access) and collect customer contacts to build your email list.

Pay-per-click ads. Drive traffic to your website or social media channel by running paid ads. Determine which keywords your audience uses to find services or products like yours and decide how much you’re willing to pay per click.

‍Tip: If you need help developing your marketing strategy or executing campaigns, you can hire expert digital marketers on Upwork.

When freelancing on Upwork, you can run ads on the platform to help you win more work and stand out to clients. Boosted Proposals show up first to clients when they review talent proposals for their open jobs. The Availability Badge lets clients know that you’re ready to take on new projects right now. When clients search for talent to send job invites, Boosted Profiles appear first on their results list.

Attracting and retaining customers is how you build a successful side hustle. Figure out what makes your side hustle different-–this is your unique selling proposition (USP). Present your product or service as a solution to a problem and use your USP to reinforce why they should choose you over a competitor.

Once you land a customer, the goal is retention. You want every customer to have a positive experience with you and want to work with you again. Each customer has the potential to grow your business by continuing to use your service or purchase products from you, leaving positive feedback and reviews, and spreading word of mouth (which can be digital).

Treat every customer like they’re your main focus and only customer. Do your best to go above and beyond to meet and exceed their expectations. The extra effort you put in to making your customers happy pays off when they decide to work with you again or refer you to someone else.

10. Build your brand

After establishing what you do, you need to decide who you are as a business. Whether you’re operating as a business or working as a freelancer, branding is how you connect with customers and stand out. Your brand positioning explains why a customer should choose you over the competition.

Branding is how you tell the story of your work. Stories add emotional appeal and personality so customers can connect and get to know you. When you’re working remotely or have a company, you want to make sure that you can build connections and feel human.

As a freelancer or gig worker, you want to develop a personal brand that makes you unique. Position yourself as an expert in your space and work hard to become the go-to person for your specific skill. Briefly tell the story of how you became a freelancer and why you’re passionate about what you do.

Businesses should explain why their product or service is better than their competitors. If two products and services are equal in features, price, and benefits, branding often determines the customer’s purchasing decision.

Eventually, as you grow, you want to create brand style guides that outline every element of your brand, from your mission statement to the color scheme in your social media graphics. These guidelines help you maintain consistent branding across all platforms and are especially helpful when hiring employees or independent professionals.

Key elements of a strong brand identity:

Name and logo. Decide on a business name and create a logo for your business (if needed).

Mission statement. Write down what your business offers and your goals—this is your “why.”  

Values and principles. Outline what you want your business to stand for and your promise to customers.

Voice. Discover how your brand should sound in content, keeping your target audience in mind. Imagine it had its own voice and personality. Some brands have a casual and conversational tone, while others are more serious.

Persona. Similar to a voice, imagine your brand was a person and describe them, from what they wear to what matters most to them.

Typography. Choose the fonts and how you want to visually display content.

Color scheme. Set your brand’s color scheme.

11. Leverage technology and tools

When working for yourself and starting a side hustle, you want to make the most out of your time. Leveraging technology and tools can help you be more productive and efficient. Always be looking for ways to automate processes and integrate tools that can help you save time.

If you realize you’re spending too much time on one aspect of your business, like data entry or project management, check to see which tools can streamline the process. You can find a variety of web or app-based tools designed to help with nearly every aspect of your business. Many of these tools have free versions with lighter features and free trials, so you can test the product before paying the full price.

You can also hire freelancers for tasks or projects that you need help with. Working with an independent bookkeeper, data entry specialist, or virtual assistant could free up some of your workweek so you can focus on what you like doing most.

More resources on tools you can incorporate into your workflows and processes:

• The Top 18 Collaboration Tools for 2024
• A Freelancer’s Toolkit: 27 Tools Everyone Can Use
• The Best SEO Tools: Top Platforms and Useful Software
• The Best Capacity Planning Tools: Free and Paid
• How To Increase Website Traffic Organically With Free Tools
• 12 Best Writing Tools for Planning, Editing, and Optimizing Content
• 10 Best Data Entry Tools to Automate Your Workflows
• Top 10 Tools for Organic Instagram Growth
• 40+ Best Productivity Tools for 2024
• Top 15 Social Media Tools for Businesses in 2024 (Free & Paid Options)
• Best Time Tracking Apps for Freelancers in 2024

Learn about artificial intelligence (AI), a game-changer in today’s business world. Freelancers are finding innovative ways to use generative AI to enhance their creativity and improve the quality and speed of their work output.

Find information on AI-powered tools:

• Top 11 ChatGPT Plugins: Do More With AI
• The Best AI Platforms: Top 12 AI Tools for Business
• The 28 Best AI Tools For Freelancers in 2024
• 19 Web Productivity Tools for Freelancers
• 10 Best AI Coding Tools To Supercharge Your Workflow
• Best AI Tools for Video Editing: 10 Picks for 2024
• Top 10 AI Tools for Lead Generation
• Best 10 AI Finance Tools for Professionals
• 12 AI Marketing Tools To Unlock Your Business Potential
• 11 AI Customer Service Tools To Streamline Customer Support
• The Best AI Scheduling Assistants and Tools for 2024
• 9 AI Writing Tools for Freelance Work
• 14 AI Productivity Tools To Help You Work Smarter

12. Network and build relationships

Networking is an opportunity to build relationships with others in your industry and meet potential clients. You can attend virtual or in-person networking events. Depending on the type of event, you may be able to pitch your services directly to clients or meet other professionals at different stages in their careers. Find a mentor or eventually become one yourself.

Before you attend an event, create an elevator pitch for your side hustle. When you meet someone and they ask what you do, have an answer ready. Elevator pitches are usually around 30 seconds and should explain who you are, what you do, and why someone should use your product or service.

Businesses are built on relationships. Other freelancers or gig workers could become part of your professional support system to give and get advice from and bounce ideas off of. You can refer clients back and forth if you have complementary services.

Networking events can also help you find new leads. You can meet clients either face-to-face or virtually and make a connection. Learn about opportunities before they’re posted online or widely known. Even if a potential client doesn’t need your product or service, they may refer you to a colleague who does.

Tip: You can attend Upwork events either in person or online to meet industry leaders and other independent professionals and learn how to succeed as a freelancer.

13. Track your progress and adjust

Having a clear idea of how your side hustle is doing can help you see where you need to make adjustments. Track your progress and performance using tools and then gain insights from the reporting features. Take the feedback you receive from clients and customers to see what you’re doing right and what you could be doing better.

Successful business owners, freelancers, and side hustlers know how to adjust their strategies and pivot based on feedback, industry trends, and new technology developments. Being the first to incorporate a new technology or offer a trending service can help you stand out.

Make the most out of the data you collect by using the right tools for informed decision-making. Analyze different aspects of your business with these and other popular tools:

• Sales reporting – Salesforce or Zoho CRM
• Customer feedback – Zendesk or Qualtrics
• Analytics – Tableau or Qlik
• Project management – Monday.com or Wrike
• Social Media – Hootsuite or Sprout Social
• Marketing – SEMrush or Google Analytics
• Finance – Quickbooks or Freshbooks
• eCommerce – Shopify or WooCommerce

14. Scale your side hustle

Once you hit the limit of what you can accomplish by yourself in the time that you have, you can start to think about scaling your side hustle. You may find that as a freelancer, you have to decline new clients and projects because your workweek is consistently maxed out. If you’re selling products, you may regularly reach the cap of the number of orders you can fulfill on time.

As your side hustle begins to earn more and require more of your time, consider transitioning into working at it full time. You’ll know it’s time when you’re on track for your side hustle to bring in the same or greater revenue than what you earn at your other jobs.

Remember that working as an independent professional and owning your own business doesn’t always have the stability and job security that full-time employment provides. While you have more potential for earnings and growth, you may also have more risk. Before going all in on your side hustle, make sure it makes sense based on your financial situation.

Think about what growing your business would mean. This could be expanding your service or product offerings so you’re a one-stop shop for clients. You could expand into new markets. Scaling your side hustle may mean hiring employees or independent professionals so you can take on more customers or clients.

Summary

Side hustles are jobs you do outside your main source of income or primary responsibilities. They could be short-term income-generating opportunities or a way to try out a new career or passion project.

If you’re working a full-time or steady part-time job, you may decide that you want to start a side hustle like freelancing or on-demand gig work to earn additional income. Parents or other caretakers may choose a flexible side hustle to make extra cash in their spare time.

The first step in starting a side hustle is coming up with an idea and then making sure there’s a demand for your product or service. While brainstorming an idea, you’ll want to audit your current skills and interests and what you’d be open to learning.

Once you have a few ideas, you can check to see if people have a need for your skills or products. After deciding on your idea, you’ll need to create a business and marketing plan to determine how to reach your target customers.

The next step is to implement your plans and start your side hustle. Build your brand online and begin marketing your services. As you grow and scale your business, you’ll want to streamline your processes and workflows, and figure out ways to improve productivity and efficiency with the right tools.

The final step is to transition into scaling your side hustle and making it your full-time career if you choose to do so. You can facilitate this process by hiring freelance talent on Upwork. This will help free up your workload so you can focus on what you do best.

More ideas to help you find the best side hustle:  

• 30 Side Hustles for Stay-at-Home Moms
• 50+ Side Hustles for Seniors, Plus Tips for Retirees
• Kickstart Your Copywriting Side Hustle: 10 Ideas for 2024
• 25 Marketing Side Hustles for Earning Extra Money
• 10 Data Entry Side Hustle Ideas for 2024
• 10 Virtual Assistant Side Hustle Ideas for 2024
• 10 Digital Marketing Side Hustle Ideas for 2024
• 25 Coding Side Hustles to Earn Extra Money
• 12 Graphic Design Side Hustle Ideas for Extra Income
• The Best Gig Apps: Explore Top Platforms by Skill Set
• How To Earn Extra Money at Home: 10 Ideas

Start your side hustle with Upwork

Upwork can be your secret to success when starting your side hustle. You can join Upwork, make a freelancer profile, and check the Talent Marketplace, where you’ll find thousands of opportunities every day. Decide how many hours a week you can dedicate to freelancing and send proposals to jobs that fit your skill set. As an independent professional, you get to choose what projects you accept and can make your own schedule, working around your other commitments.

You can also use freelance talent to help build your side hustle. Create a client account and find experts in exactly what you need help with, whether that’s building a website or doing data entry. Hire talent for the work that you don’t need to do yourself so you have more time doing what you’re passionate about. Get help whenever you need it with whatever you need it for.

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Upwork is an OpenAI partner, giving OpenAI customers and other businesses direct access to trusted expert independent professionals experienced in working with OpenAI technologies.

Upwork does not control, operate, or sponsor the other tools or services discussed in this article, which are only provided as potential options. Each reader and company should take the time to adequately analyze and determine the tools or services that would best fit their specific needs and situation.

This article is intended for educational purposes and should not be viewed as legal or tax advice. Please consult a professional to find the solution that best fits your situation.