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Having a side hustle is the cool new thing. Dipping your toes into entrepreneurship is hard. Especially if you have no clue where your personal money is going right now. There really are a ton of benefits to having a side hustle, especially in today’s world. When our restaurant shut down in March of 2020, it was my side hustles that I ended up being able to fall back on to support us. They say that most millionaires have seven sources of income! At one point during my debt free journey, I had 5-6 sources of income to help pay off debt!
However, business finances can be even more stressful when you don’t have great personal money management. I have launched my Business Budget Coaching to help entrepreneurs set their business finances up for success after struggling with my own business finances for years.
I remember being very stressed in the first months of starting my business because I wasn’t making any money but I sure was spending a lot of it. There was a lot of time thinking about how much I needed to do for my business (and a lot of time not actually working on my to do list.) People kept saying “Well, that is a tax write off.” And some of it is, but don’t be so afraid of taxes that you write off all of your profit!
Whether your side hustle is direct sales/MLM, photography, or a creative shop, Etsy. There are a few things you can do to really get the most out of the time you are investing into your business!
7 Tips For Getting The Most Out of Your Side Hustle
1. Open a separate checking
Having a separate checking is something I repeat over and over again to Business Budget Clients. I know WAY too many people who are constantly spending all of their business money from their side hustles. If your business has business expenses, you need a separate account. If your business has income, you need a separate account. Pretty plain and simple. I talk about this being one of the things you need for successful business finances!
ALL of your income and ALL of your expenses should be going in and out of this one account. Simplify this for yourself, because 9 times out of 10, you aren’t going to remember to transfer it from one account to another. Making things as simple as they can be is one of the biggest keys to managing your finances. If people are paying you on Venmo or PayPal, set up your account to go directly to your business bank account. The 20 minutes that it takes to do this can completely save you from so many headaches.
2. Decide how much you are willing to invest
Your initial investment should be a very clear number. If you share a budget with a partner, this is a conversation that needs to be had. If you are just starting a side hustle, set a strict limit for yourself.
For this blog post, we are going to use a candle making business as the example. Let’s say, you decide that you can get a first round of candles made for $250 with the materials, the tools, any marketing you want.
Transfer that $250 to your new separate checking. With that initial money, you should be able to make a round of candles to sell. When those start selling, you can reinvest the money from the sales to keep going. The goal with this is to not transfer any more money into your account than this and you will want to slowly pay yourself back for you investment when you can.
By setting a limit, putting it in a separate account, and not transferring any more money, you are giving yourself a guideline. If you run out of money before you start making an income, it would be time to evaluate your business plan. It doesn’t mean you failed, but maybe you didn’t give yourself enough time or initial investment.
3. Decide on set percentages for savings, expenses, and profit.
Having an income plan is so incredibly important to any side hustle. This is what I talk about as an income cash flow plan in The Savvy Business Workbook. Every business will be different because of the natural overhead of different businesses. You can change them if they aren’t working, but ideally you want to keep these the same with every single sale.
Say you can get your candle materials for $3 and you are selling them for $12 each. This is what a breakdown of each candle sale COULD look like.
- $5 into Business Expenses
- $3 into Business Savings
- $4 into Profit
You want to set aside a little bit extra in expenses to grow. After the sale of a few candles, you will be able to upgrade the wax, wicks, scents, or jars or you can buy in bulk for the next round and possibly save you a little money. Or it could go to signing up for a vendor event in the future where you could sell even more! Business savings covers things like taxes and upgrading equipment that you use to make and market your candles. And you make $4 profit on each sale.
This is purely just an example and by no means the exact numbers you need to use for your business.
4. Make a list of Income Producing Activities
It is SO easy to get wrapped up in always thinking about your business. It can be exhausting to feel like you are always working. My advice for this is to make a list of ALL of the things that need to be done for you to run your business. Think of anything and everything. Then categorize them into two categories; Income producing and Non Income Producing. Meaning, does this task directly lead to more income or is it more of a back end task that still eventually needs done but doesn’t move my business forward.
For your candle business it would be things like:
- Making candles
- Listing finished candles in your Etsy store or Facebook group for sale
- Packaging and delivering orders
- Doing vendor events/ virtual events
Things that are NOT income producing are:
- Researching other candle brands
- Scrolling Tik Tok watching other people make candles
- Talking to other candle makers about how much you love it
- Spending hours looking at Pinterest for different combinations
- Managing your excel spreadsheet with your inventory and expenses.
- Rearranging your shelf with all of your inventory on it
NON income producing activities still need completed at some point. This is not to ay that they aren’t important, they just don’t directly bring in income. You are not going to manage a business without doing some of both. But set aside an hour. Set a timer and give yourself that time to do the non income producing activities, but once that timer is up, move on to your other things. A bulk of your side hustle time should be income producing activities.
5. Start with 1-2 Marketing Methods
There are 10,000 different ways that you could market your business for sale. Things like Etsy, a Website, Facebook Groups, Tik Tok, and Instagram all seem so appealing when you are first starting out. You might feel like you need to do it all. But while social media CAN be an income producing activity. It can also be a giant time suck where you feel like you are working MUCH harder than you actually are.
Start with 1 or 2 of the methods. They all have their pros and cons depending on your business so do a little research for your industry. Then jump in and get started! As you grow you can decide to add one more but don’t spend so much time advertising your business that you don’t really have a product to offer (Calling myself out there).
6. A Schedule for Side Hustle Time
This is a little bit of a combination of #4 and #5. You don’t want your side hustle to completely take over all of your freedom. I am definitely one to talk about the beauty of entrepreneurship being that I don’t have to have a schedule. I can work whenever I want or wherever I want. And I mostly still do. But let’s say that you know that you have 5 hours spread out through the week that you can work. You can plan your tasks based on those time slots. You also know that for one hour on Tuesday morning, your kids won’t be home. So Tuesday mornings is the BEST time for you to actually make the candles.
But now I have a list of what tasks that I work on which days. Mondays I focus on Instagram content for the week. Tuesdays I work on website stuff. And so on. I call this my weekly plan and I keep it on an excel file. Every Sunday I print it out, add other things to the calendar and then throughout the week I can highlight things as they are completed.
Take your list of Income producing and Non Income producing tasks and assign them a day. This helps with the overwhelm and frustration of feeling like there are a thousand things that are at the highest priority.]
7. Set a goal for your profit.
Having a set goal for your side hustle profit is extremely motivating. Maybe you want to focus on paying off one debt. Or saving up for something special like a vacation or electronic. Or to treat yourself to a big splurge. I personally try to avoid spending my business income on $5 and $10 things because it doesn’t feel like as much of a reward for my work. If you are constantly spending your profit on frivolous, but cheap things and not seeing a big outcome, it might get disheartening. Usually, my profit goal is debt or a mini vacation!
Setting boundaries and having fun!
Whatever your side hustle or business, the most important thing to me has been setting CLEAR boundaries on where I am working, when I am working, and what things ACTUALLY need done. It is a work in progress because I am definitely still guilty of feeling like I am constantly doing something for my business when really I am 20 minutes deep on scrolling through parenting tik toks.
The more I focus on my business and the more intentional that I get, the more I feel like I actually have the freedom of an entrepreneur that everyone is striving for instead of the work around the clock that many people describe.
Need a few more tips to starting your business budget or just a printable that lays it all out for you? Grab my FREE Mini Business Budget Workbook!
