This is my last post kind of focusing on “it’s the New Year”-type subject matter, but I feel this is important. Many people make plans to go hard at the turn of each calendar year, and some of that intention turns into solid side business ideas. But… There’s a bit of caution that it should be approached with that some don’t consider.
Today I just want to talk about the pros and cons of a side hustle, a few pitfalls to look out for, and how you can reduce the risk of falling into some of these traps yourself. And I’m not just speaking from conjecture here, this is stuff that I have actually tried and has worked for myself and a number of friends and associates.
A Quick Hit List of Pros & Cons of Side Hustles
I don’t want to rewrite the entire article “The pros and cons of a side hustle” from Washington Trust Bank‘s site, but I just did a quick search on Google and came across it. Their list isn’t all-inclusive by any means, but I think they catch a lot of good things for anyone who may be considering creating a side business but may not be familiar with what all that entails. So, I encourage people to check it out.
Here are the bullets from their listing…
Enhancing your career.
Mixing it up.
Growing your network.
Developing a creative outlet.
Supplementing your income.
Reducing your downtime.
Becoming distracted at work.
Adding more stress.
Determining your worth.
And I would add the following to each section…
PROS: Strengthening your independence & problem solving.
CONS: Potential schedule overloads & Taxes.
Again – I encourage you to check out the article for their reasoning, I’m going to share a few example stories from my past that I hope might bring up a few things for people to consider that they might not have.
The Pros of a Side Hustle in Action
American culture has a weird relationship with work. I think it’s fair to say that we all value a break and time off, but most of us have the understanding that if you want to achieve a certain level of living – a certain level of sacrifice has to be made. So, we’re willing to work for it. Some people pursue high-paying singular positions or fields while others prefer to dabble in multiple things to achieve their dreams.
When you dabble, you may end up working a side hustle like I pretty much did all through my twenties (in addition to my day job as a consumer insights analyst at a corporate office).
This took the form of me…
Running a totally amateur-ish web design business right out of college.
Doing art/graphic design commission work on the side.
Handling marketing initiatives for a few small companies.
Monetizing a blog through ad revenues and sponsorships.
At any given time in that period of my life, I had 2 – 3 things going on at once. And I was loving it!
I am a fairly organized person with a great understanding of the structure that I need in my personal life, so the extra load of “work” (because I was doing things I loved) really never got to me. I was typically great about scheduling stuff so nothing overlapped, and I had plenty of time to get various tasks completed because I learned early on to pad delivery schedules to allow for unexpected setbacks (underpromise — over-deliver).
And, yeah – I felt the pros listed above.
I was able to more readily learn and apply skills that I enjoyed outside of my day job that I didn’t use that often at work (enhancing my career). I felt like I was touching on completely different things in my side hustles compared to my day job (mixing it up & creating a creative outlet). I met sooo many interesting new people (growing my network). I got paid pretty well for the stuff I was doing (supplementing my income — had to pay off those student loans!). And when everything was said and done, my confidence grew and I felt like I could take on anything (due to a strengthened sense of independence & learning how to solve problems on my own).
The upside was amazing, and for anyone who thinks they may have the chops to get side things done in addition to their regular workloads (speaking specifically to the people who just want to “do something on the side” vs. venture out completely on their own) — I’d say try it if you never have.
But — I want to be transparent with you and let you know that there’s another side of the coin with side hustles that you should be aware of and plan for ahead of time.
The Cons of Side Hustles Come in Waves
Now, keep in mind – I was in my 20s when I went through my side hustle phase. I just had energy and time to take things on, so I did. And I think I did it fairly well, but there was A LOT of learning on the fly that I would take with me into the next project each time.
For starters – I quickly had to accept that I would just miss out on some things. While my friends were partying, creating new relationships and memories, having kids, and all that — I was working. Always. I didn’t have time to go to the movies, let alone have time for a romantic relationship.
Even if I wanted to sleep — so what? Sometimes you had to be willing to work late hours, have early client meetings, or (and this one is especially true) work AFTER you’ve gotten off work from your day job. A lot of people might dip their toe in thinking they’ll only work weekends, but if your new side hustle picks up any level of relative success, you’ll quickly find that time spilling over into other times you hadn’t intended to work originally. And I was dealing with that when I didn’t really have much else going on. People who manage all of that while having a family or other important obligations truly impress me!
Becoming distracted at work is very real. I can’t tell you how many times I had to take on making adjustments on a side hustle project during my lunch break at my day job. Most clients are very understanding if you tell them up front that this is more of a “night gig” for you or something that you do in off/non-business hours — but stuff comes up. Sometimes they will REALLY need you to get them something during a time that you may otherwise be working your regular job, and you have a choice: Either deliver – or tell them no and risk burning the relationship/revenue. And you’ll also find that some clients are just disrespectful of your time and the boundaries you’ve set (in those cases, I recommend cutting ties with those clients – they aren’t bad people, but their needs just don’t mix with your intentions).
Still, all of this creates stress in addition to your regular things. Stress makes you mess up. Your quality of work may falter at either your day job or your side hustle and now you’re not doing anyone any favors. So… sometimes you may want to pause. YOU control how many things you take on, and you’ll just need to learn to manage your time well to mitigate this as much as you can — but — surprises happen. And that’s what I mean by the cons coming in waves.
I never really struggled with the whole “determining my worth” thing. My prices were my prices, and if that didn’t work for people – I wasn’t for them. But I know others who have really struggled here and I’ve had to help them do an analysis of their competitors to determine the prices their market would pay.
If general business management, customer service, and accounting aren’t your thing — I would STRONGLY recommend you design your side hustle aspirations in a way that you aren’t dealing with people. This doesn’t alleviate EVERYTHING, but it gets rid of one of the larger hurdles you just may not have time to deal with and navigate.
Beyond that, if you’re doing REALLY well — there always comes tax time. If you’ve been doing regular work for a client with an actual company, you may be sent a tax form from their company at the end of the year that you have to file. If that’s income from another state, there are things to consider there. I specifically remember the first year that my side hustles put me into a new tax bracket. I was happy about the milestone, but I also hadn’t prepared properly for the tax hit that came with that. My lifestyle and yield from my day job just didn’t sit well with what was needed for that financial shock. Fortunately, I always tended to file a little early – so I had time to collect a bit more revenue from my job and a few clients before footing the tax bill.
And that’s just the tip of the iceberg.
Take Time to Set-Up Properly & Know Limits
The things that I can tell people, based on my experiences, to counter each con listed above for side hustles are pretty simple, and I’ll address them in order. If you do these simple things, it’ll help guard your reputation AND sanity.
Set boundaries with your time and target work hours. If you really only want to sacrifice 10-15 hours a week to your side hustle and you know that, don’t book projects that you know will create 30-hours of work. And treasure your break times. Do what you love in that time. Spend it with family and friends.
Make it clear to potential clients that you have a day job and won’t be available during certain hours and could potentially do communications during your lunchtime, but that’s it. If you give your side hustle clients an inch, they may take a mile — and it may not be worth it. If your day job is the main provider of your income, health insurance, and overall lifestyle — always prioritize THAT over the side hustle (unless you’re trying to make the side hustle your full-time gig, then you have choices to make).
Take breaks when you need them. You’ll know when you feel heightened and overloaded. At that point, stop taking on new side hustle work – let things settle – breathe – and then get back to it. You’ll find your resilience for how much you can handle will build over time, but that comes with experience. Don’t rush into it haphazardly.
Before you start your side business, research what comparable quality business providers are providing for their services. Take into account that you might plan to only work during night hours — that’s a bit more invonvenient for your clients, so your prices should reflect that (but modestly — don’t become known as a discount shop). Create bundles of your services that you can present to potential clients who want to haggle your prices with you. You’re still not short-changing yourself that way, but they’re also getting the mental satisfaction of “getting a deal” if they see the cost benefit to your packages of related services/products.
Mange your time wisely and DEFINITELY keep a calendar. Once you get a feel for how long certain types of services that you offer take to complete, you’ll be able to estimate times (and maybe even costs if your work is based on hourly fees) better. Also, anticipate busy times of the year if that impacts your services. If you don’t do this, you may find yourself overwhelmed or missing opportunities during certain times of the year.
Make friends with an accountant. That’s the easiest things I can tell you if you’re going at this hard/seriously. You are independent, sure – but you don’t know everything. If you opt to NOT do that, and you understandably might not, as a precaution – keep back 40% of everything you make from your side hustle efforts for taxes. Yes, that’s a lot. Yes, it’s probably too much in most cases. But, hey – at least you’ll have the bag to cover the costs (or most of it) when everything is said and done.
If you do these things while paying attention to your limits, you’ll be in an ok place for someone new to this type of work.
You may even hopefully get to a place one day where, like me – you opt not to do a side hustle, but focus on passion projects and side interests instead.
Don’t disregard the value of “getting the RIGHT day job”. If you do that, pull in an appropriate (for you) level of income there, and enjoy what you do – you’ll have more than enough time for whatever side venture(s) you may want to pursue. And even better, you may not need a side option at all and only go after your hobbies in your free time.
Experiment and have fun! When you stop having fun, always be open to re-evaluation.
There are a ton of other things I could add in the context of this type of stuff, but I want to keep this one light and focused on what’s been presented so far. This was slanted toward people working on things in service-oriented side-hustles because that’s what I did mostly.Sacrificing time for money. There are definitely ways around that alternative (because it doesn’t scale), but if you’re just trying to create a little extra lifestyle money like I was – it’ll do just fine for you so long as you do the right thing and charge (and are able to get) the right money.
Remember that side hustles aren’t just extra money. They’re extra work and time spent sacrificing your most precious non-renewable resource (time) for someone else (if you opt to go into something service-oriented or that has you creating crafts — talking to you artisans — by hand). Make sure that the sacrifice is worth it for YOU.
I wish you all well in your new hustle endeavors if you’re choosing to take that on in 2022, and I stress that you take your time and carefully consider things before putting too much on your plate (in a bad way).