If you’ve ever considered starting a side business to supplement your income or follow a passion, ensure you’re ready with the correct business setup, resources, and mindset.
Side companies are started for various reasons, including extra cash, a challenge that they don’t get from other jobs, or to test a concept that they want to transform into full-time work.
Some entrepreneurs with experience in this field offer guidance on establishing a side business, whether you’re seeking extra cash or want to start a new profession.
A common myth prevents those who want to start their own business from doing so. The myth is that enterprises must begin with a “bang,” which entails a lot of time, abandoning your day job, sacrificing family time, and taking a significant personal and financial risk on a dream that may or may fail, leaving you in a lot of debt.
In reality, many entrepreneurs begin their firms as side projects. They don’t quit their day jobs; instead, they employ the talents they’ve acquired to launch their side business. They don’t expect these enterprises to pay their bills, but they also don’t limit their expansion.
One of the most innovative financial choices you can make right now is to start a side business. With the economy in such a fragile state, no one can have too much income variety. Since Covid-19, even workers in supposedly solid public sector jobs have been subjected to furloughs and layoffs.
Even if you aren’t concerned about losing your work, a side business can help you pay off debt, save money, and invest. It may also provide tax benefits. If you make purchases for the business, you may be eligible for tax deductions. Aside from that, a side business might be an excellent method to obtain a taste of a possible vocation that you may wish to pursue full-time later.
How to start a side business while still working full-time:
1. Make the Commitment
It is going to be challenging. Your relationships will be strained, and you’ll be pushed to make difficult decisions regularly.
Make a note of all of your upcoming activities and commitments, with the amount of time you plan to give to each.
Take note of the ones with whom you can afford to reduce your involvement and inform them that you will be taking a step back to focus on a new important project.
2. Make Sure You Enjoy Doing It
You don’t want to put your current job in jeopardy by squeezing in a little extra work throughout the day. As a result, you’ll most likely work a full day before starting a side business.
That’s a lot of time spent working, so you should be looking forward to your second job.
3. Start Small and Validate
Test your proposal on a modest scale first, possibly with friends and family, to avoid overspending or going into debt to fund your side business.
People should think about which choice provides them with the highest opportunity of earning $100 this month. Then put together a minimally effective product or service that will allow them to acquire $100.
4. Validate Your Business Idea
Validate your business idea early in the planning process. This entails soliciting candid feedback from paying customers.
It’s in our instinct to believe that we’re always correct and that our ideas are always brilliant. Unfortunately, many of our company’s thoughts and product ideas are not well-considered, practical, or even thoroughly studied.
Slowing down and creating a straightforward proof of concept with ongoing feedback from your target audience can help you progressively design a solution that will fulfill their demands. From there, you’ll be able to progress.
5. Find out if you need to pay estimated taxes
The tax system in the United States is a “pay-as-you-go” system. That implies that the IRS prefers people to pay their taxes over the year rather than one big sum. That’s why you could have to pay estimated taxes (also known as quarterly taxes) on the money you make from your side hustle quarterly throughout the year.
You may rest if your side gig earns a few hundred dollars per year. Estimated taxes are usually not anything you need to be concerned about. Maintain track of your earnings, file your tax return in the spring as usual, and pay whatever taxes you owe on the extra money.
If you need assitance setting up your business tax planning, feel free to contact us.