How to start a successful side hustle

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September 24 2019
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If you’re looking for a few extra dollars or a way to monetise a hobby, a side hustle can be a great place to start.

But with literally hundreds of options requiring unique needs and skills, how does one go about starting a side hustle?

In a conversation with nestegg, director and senior financial adviser at Firefly Wealth Adele Martin discusses how to create a successful side hustle.

Who should start up a side hustle?

The financial planner said there’s a number of people who may be in need of additional income that can benefit from starting up a side hustle.

“People on maternity leave or are working part-time because they have had kids, their income has dropped but their expenses may not have. So, often, it’s a time where people get themselves in trouble,” the money mentor said.

“For those people, this could be an extra source of income.”

Picking the right side hustle

In Ms Martin’s experience, side hustles start as something that people love doing anyway and that friends and family would ask them to do.

Using the example of one of her clients, Ms Martin said that “one particular client makes earrings and then other people asked her and now she is not having to work outside of the home”.

Other side hustles can include work in the gig economy and includes roles such as Airtasker, Uber driver or even using Airbnb to lease out a spare room.

Don’t give up your regular job

As tempting as it may be, the financial adviser has encouraged people to stick with the nine-to-five and not go all-in on their side hustles.

“Do not quit your day job,” she said.

“Most businesses fail because they go all-in, all up straight away.”

Ms Martin explained that such a move puts your household and business under too much financial stress.

When can the side hustle become the full-time job?

While many might be hesitant to quit their full-time job, once a side hustle creates more revenue than their personal expenses, they are able to leave their employer.

“That’s why [financial advisers] spend lots of time understanding people’s personal cost of living,” Ms Martin said.

As an example, she highlighted that one of her clients would have to drop their expenses by upwards of $20,000 if they wanted to turn their side hustle into a full-time gig.

Should businesses have separate bank accounts?

The financial adviser has advocated for the creation of separate bank accounts for side hustles to make it easier to track income and expenses.

If you’re not tracking expenses, it becomes harder to know when the company is making a profit and means incorrect taxes might be paid.

“As soon as you start the side hustle, have a chat with an accountant, set up a separate bank account so you know if and when you need to start paying tax,” Ms Martin outlined.

She warned that the tax man is targeting the gig economy, which means investors need to be able to provide the required paperwork to support their claims.

Creating financial freedom

Ms Martin is an advocate for side hustles due to the financial freedom they can provide people as well as the ability they give for upskilling business owners while they might potentially only be working part-time or at home with the kids.

Using the example of an eyelash side hustle, one of Ms Martin’s clients is using half of her income to pay down credit card debts, while also saving for a trip to the Northern Territory.

For women who are at home, a side hustle can give them an additional income while keeping their skills up and making themselves valuable if they do return to the workforce, she continued.

3 tips for anyone starting a side hustle

Ms Martin has provided three practical tips for anyone considering setting up a side hustle.

Do something you love because you might not make money for a little while.
Set aside scheduled time to work on your side hustle.
Make sure you understand the numbers for your business, including the right selling price for your goods or services.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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