Starting a side business? I realize that the opportunity to start a side business can be exciting, especially when you have found others with like minded intentions and interests as yourself. Further, seeing proof of success validates your intention even more and makes you anxious to get started immediately.
Although I am a huge advocate of proper and careful planning, I’ve been a victim of anxiety several times in the past. So if you are like how I was and the kind to fire and then aim and adjust, the following points to consider will hopefully help you take just a step back to aim before you fire.
What are you trying to achieve by starting a side business? Is it more money that you want? If so is it a need or a want? Do you need the money immediately? Are you trying to establish a more flexible business model? Are you aiming for financial freedom? Or are you simply pursuing a passion that you buried overtime as you dug yourself deeper in the race?
Your answers to these questions are critical in helping you establish the kind of business you pursue. For example, if you have an immediate need for money, you may consider the freelance option by trading your hours for dollars (time for money). You are paid immediately for tasks completed.
On the other hand, if you intend to establish a venture that you can build into a viable business down the road, you may opt for the web, or a combination of both the web and freelancing.
The answer you are looking for is really whether you should be pursuing a business that rewards you on a short term basis vs. long term, or a blend of both.
Can your life go on without a blink if your $20,000 investment goes down the drain tomorrow? Your risk profile is critical in your decision in pursuing the type of side business you will get involved in.
If money is scarce and you don’t have much to invest into your business, real estate may not be the option for you right now (unless you can strike a low or zero down deal). In the same way, you may not want to invest in a small business in your community.
There are several other side business options however that you can consider. For example, any service related part time gig will likely involve low start up costs (it can at least). You may want to tap into your human capital here and determine what is it that you can offer the world and make money from it?
What type of interaction would you like to have with the world (your customers)? Do you prefer more of a face to face business? Are you an introvert and rather work from home on your laptop? Is it a combination of both?
You answers here will further define the medium through which you conduct business. For example, if you crave physical interaction, the freelance model may work best for you. Specifically, a freelance business with heavy human interaction such as teaching and tutoring may be the way to go?
You can also run a freelance business with zero or minimal interaction. Consider this scenario: You bid online on a project with pre defined terms, you win the bid, you do the work, you get paid for it. All that without a word exchanged with the “payor”.
If you prefer working from home, you may consider a data entry type position, or work on establishing a website or blog in your field of interest and / or expertise. Note that online businesses can also provide tons of interaction. Think about blog commenting, moderating forums, online chat support, etc.
When starting a side business, this question will help you further consider not only the business medium you select, but also the type of business model you want to pursue based on the human interaction level.
How much do you want to work? When do you want to work?
These kinds of questions will help you determine the work-load or type of assignments you take. Say you decide to take up a part time data entry job, and that your client has strict deadlines. This doesn’t really give you the freedom and flexibility to work around your schedule does it?
On the other hand, say you decide to bid on a web design project. The project allows for 3 months and you know you can do the job in a month. Better yet, say you are able to negotiate the terms of the contract. This type of part time work will give you some freedom and flexibility around your work schedule.
If you decide to establish a website or start blogging, you are working for yourself and have absolutely no restrictions. So think carefully about the type of commitment you are ready and willing to make before deciding what business to go into.
When starting a side business, think about whether you want to continue trading hours for dollars? Or do you want to build a passive, residual stream of income? When you are working on a project / job in exchange for a fee, you are essentially trading your time for money.
When you stop working, the dollars stop flowing in. When you establish a successful website, your advertising revenue comes in month after month on auto pilot. Another example of this is multi-level marketing (MLM). It takes time to build, but once the income comes, it likely comes continuously month after month.
You will collect cash payment for your work / project immediately, whereas the website and MLM efforts will take you months to establish before you start cashing in the rewards. Which direction do you want to go?
Do you like to see, touch and feel things? Or are you an idea / theory person. I am talking about the difference in real estate and cyber estate. If you are more of the touchy feely type, you might want to consider flipping homes in your spare time.
On the other hand, if you are comfortable with cyber real estate, you may want to purchase a domain and build an asset online instead – such as a website or a blog. Cash flow from both activities is on the longer term horizon – but hopefully you have already answered this question by answering the ones above.
The answer to this question determines the scale of assignments you are willing to take on. For example, if you don’t like working with others, you are not likely to take a part time gig as a Project Management Professional (PMP). On the other hand, if you enjoy working with others, you may round up the troops and go bid for a larger scale project that you can do in your spare time.
This is one of the most important factors to get right when starting a side business. I’ve seen way too many businesses fail because one or some people involved don’t pull their own weight.
Your answers to any of the above will depend on your personal situation. What is constant fact however is the fact that this is your OWN business, and there should be NO compromises. There is no one to force you or make you do anything (like showing up to the office at 8am every morning even when your Sunday night flight got in at 3am last night). When starting a side business, design it the way you envision it to be and hone it into your own fulfilling empire.
If you are an over-thinker, who simply aims, aims and aims without ever firing, I hope this article helped you in your aiming stages so that you can aim quicker and more precisely and hopefully start firing shortly.
Readers: What should one consider when starting a side business?
Here are my additional thoughts to consider when starting a side business.