Ok, you’re not ready to jump in and run your business on a full-time basis so you’re working your day job either full or part time and running your business as a side hustle.
What do you need to consider?
1. Business Structure
If you’re running your business as a side hustle, and you’re likely to be making a loss from it, then you may find that it is more advantageous to operate as a sole trader.
This means that while you have an ABN and a business name, the business is under your name for tax purposes.
Because you already have other income from your day job you may be able to claim your business losses against your other income and reduce the tax you have to pay.
If you’re going to be making a profit then you may find it is more worthwhile to set up the business in a company. The company tax rate, at the time of writing, is lower than individual marginal tax rates.
Be aware, though, that you can't randomly take money out of a company without consequences. So get advice before you go down this track.
Don’t quit your day job until you have a proven sustainable income from your side hustle. This could mean reducing the hours in your day job as your side hustle starts to earn more.
Work out what income level you need to maintain your standard of living, including any savings you have set aside for growing your business.
3. Plan your time and set deadlines
Work out where you want to be in 1-, 3- and 5-years’ time. Be realistic about what you want to accomplish and how quickly you want your goals realised.
We all know that growing a business takes time and energy, so be kind to yourself when you’re growing it as a side hustle. Remember that there are only 24 hours in a day. When you add working a 9-5 job to the equation, you don’t have that many hours left to focus on your business. Basically, you will be working on your business when 9-5'ers are resting and enjoying life. So give it time.
4. Focus on your WHY
Passion for your product or service is not enough to keep you going. Why did you start your side hustle to begin with? Whatever the reason, make sure you keep it front of mind. This is the driving force. This will be your motivation when times are tough.
Need advice? Call me on 0422 391 370