How to make extra cash with side hustles

Side businesses are becoming an increasingly popular way to earn extra income. According to Self.inc, up to 45 per cent of working Americans have some form of side income. In Canada, an Ipsos poll recently revealed that 74 per cent of business owners and aspiring entrepreneurs feel motivated to start a side hustle. For Gen Z respondents , the number rose to 84 per cent.

From covering the increasing cost of living to monetizing a hobby, many are seeing the benefits of earning an additional income.

What is a side business?

A side business is a way for individuals to earn extra money outside of their primary job. This can take the shape of many things. Walking dogs, selling candles, freelance writing — these are all considered side businesses as long as they earn the individual an extra income.

As for which side business to start? It can be helpful to consider a current skill set you already have, . while also factoring in what kind of side business would fit into your work schedule.

Consider the risk

Cary Greene, an Ontario-based candle maker, recommends considering the risks before jumping in head first.

“The risk of debt is very real,” Greene said. “For people who want guarantees, this can definitely be a problem.”

Greene’s advice for those wondering what type of side business they should start is to consider whether you have more time or money. For her, creating a candle business offered a good balance due to its lower startup cost.

Of course, with any business venture, some element of risk is involved. That doesn’t necessarily mean the risk isn’t worth taking, but just that the risk should be factored into the decision.

“Either way, you’re going to be investing lots of time, so it’s really about how much money you’re able to invest,” she said.

To Greene, investing as much as you are comfortable with potentially losing is worth it. Ultimately, it is best to identify your risk comfort levels before starting a new business.

Service-based businesses

For Paige Harris, a Toronto-based content writer, selling products was too risky.

“It’s very competitive,” she said. “ You can’t really stand out unless you’re doing something really different.”

That’s why she decided to start a side business focused on providing services to organizations and companies instead of selling a product.

Harris designed her side hustle to be as efficient at making money as possible. She did this by having a virtually nonexistent startup cost and entering a high demand market.

According to Harris, side businesses are best when they can provide something other peoples need but can’t do themselves.

Harris said she believes that interest in your service is just as important as your skills. That’s why it’s crucial to research the market you want to break into to ensure there is consumer demand.

Keep overheads as low as possible

Because many people want to start side businesses for extra money, keeping overhead costs as low as possible is important.

Overhead costs refer to ongoing business expenses not directly related to a specific product or service.

According to Harris, she started her business with only a computer and an internet connection. These were things she already had, so she was able to get a business going with no upfront costs.

Later, she added accounting software and a portfolio website when she grew her business to a point where it made sense to invest more money.

However, keeping costs low may not be the right approach for those with more money than
time. For people who are busy with their full-time jobs, starting something that doesn’t interfere with their main source of employment may make more sense, like an antique reselling business.

“There’s no one-size-fits-all, but I think, in general, people who want a side hustle don’t want to invest a ton of money,” Harris explained.

Market to other businesses

One challenge with launching any business is deciding on a target demographic.

“There’s a lot of reasons business-to-consumer is just harder,” Harris explained.

In Harris’s opinion, businesses typically have more money to spend than individual consumers, allowing them more flexibility and leeway with their expenses.

“It’s a lot harder to convince a normal person to spend $500 on a piece of writing, but it’s a much easier cost for a business to justify,” she said.

This way of thinking can also apply to other services besides content writing. For example, if an entrepreneur has a window washing business, it might be an easier sell to ask local businesses if they would like their windows washed, rather than asking homeowners.

“If you build that relationship, they’ll keep asking for your services as well, rather than with individual consumers where it might just be a one-time job,” Harris explained.

Embrace actively earning income

While it may be tempting to search for a passive income, individuals interested in starting a side business should keep in mind the hard work involved.

“You have to work hard. There’s nothing passive about running a business,” Greene explained. “We all want that passive income, but it just doesn’t happen.”

To Greene, while passive income may be possible for a small percentage of people, it is better not to expect it. Instead, it’s best to factor in your skills, schedule and goals when deciding whether or not to start a side business and what type of industry to break into.