Whether it’s because you’re ready to be your own boss, want to share your ideas with the world or just want to make a little extra cash, starting a side business is becoming more and more popular.
Since the goal of any small business is to make money, it’s important to craft a plan before you start one. Get inspiration for your small business – and tips for sticking to a budget – in this article
Step 1: Decide What You’ll Sell
This is the fun part of starting any business – determining what product or service you’ll offer. Since your main goal is to make money, not lose it, decide on something that you know is fairly inexpensive to produce.
You might start by brainstorming a list of hobbies or skills you already have. Remember – what you create doesn’t necessarily need to be a physical product. One of the most cost-effective ways to begin selling is to use your knowledge.
Are you an expert in something, like video games, physical fitness, or growing tomatoes? Your knowledge is valuable, and when you distill it into e-books, a video series, or an email consulting course, people will pay for it.
Step 2: Create a Business Plan
Before you rush into anything, you’ll need a solid business plan outlining some of the following items:
- • What service or product will you offer?
- • How is it unique from what’s already in the market?
- • How will you sell your offering?
- • How will you promote it?
- • What’s your total budget?
- • What are your goals for this business?
It might be tempting to jump into a business head-first, but without a clear plan outlining your goals and where you’re headed, you’ll quickly lose momentum. Take time now to figure out what you want to do. It doesn’t need to be complex; just clearly outline what’s important here.
When you’ve created your business plan, have friends, family, or anyone involved in your business take a look. Gather feedback and get other people’s opinions on it first. Remember, your business will only succeed if other people like what you have to sell – so consider this your first test!
Step 3: Take Care of Financial and Legal Needs
Owning a business comes with a new set of responsibilities and rules. Do your homework to find out what kind of legal protection you might need, like forming an LLC or getting certified by your state health department.
Remember, too, that the money you make from a side business isn’t tax-free. Check with your accountant or financial advisor to see what you’ll need to do.
You probably don’t need a full-time accountant to help with your business – at least not at first – but you will need to take careful note of your payments and revenue. Software like QuickBooks can help you keep track of everything.
Step 4: Set Up Shop
Nowadays, leasing space in a quaint downtown shop is far from your only option. And in fact, running your business virtually or out of your home is probably your best bet.
One of the keys to creating a successful business, beyond managing your cash flow, is scaling properly. That means starting as small as possible, with the least amount of overhead costs, and gradually moving up as you gain the cash to support a larger business. Don’t spend time creating things no one will ever buy; wait until you know there’s a market for your products or services.
That being said, explore outlets like Etsy or Upwork, or other online sites, to begin selling. If you’re creating a physical product, delegate a room or area of your home to create it. Now is the time to figure out how much inventory you need on hand at once and where it will come from.
Step 5: Start Promoting
As with your workspace, it’s not necessary to begin spending big bucks on marketing right away. The following promotion ideas are free or low-cost and can go a long way toward getting the word out about your business – because no one will buy from you if they don’t know you exist!
- • Set up a group or page on social media and invite your friends.
- • Announce your new business on your own social media accounts and invite people to check it out.
- • Create a simple website with blog capabilities and plan to post to it regularly.
- • Set up a YouTube channel and create videos to share your knowledge.
- • Post flyers in appropriate places depending on your business.
- • Use simple design tools like Canva to create consistent branding.
The most important thing to remember about marketing in today’s world is that people are less likely to want to be sold to than ever. Keep your messaging more about ways to share your knowledge and less about yourself.
Where to Go Next
Starting a side business can be a lot of work – but if it’s something you truly love to do, it can also be a lot of fun.
Want more insight on how you can set up your side business for success? Check out the rest of our business finance blogs to learn more.