What do Apple, Nike, Under Armour, Instagram, and Groupon all have in common?
It’s not just that they’re hugely successful, multibillion dollar companies. They also share a common birth – they all started life as side projects of their founders.
I’ve been reading Nike founder Phil Knight’s autobiography Shoe Dog recently, and I highly recommend it – very readable and interesting. He was working as an accountant at Price Waterhouse whilst establishing what we now know as Nike, and when he needed to spend more time on the business, he switched to become an accounting professor at his local university. It was several years into the business before he quit his day job and devoted himself full time to his enterprise.
So if businesses as enormously successful as these can spring from a side hustle, perhaps you can attain your Financial Autonomy goal by using the same approach. Let’s take a look at what a side hustle is, and how you might be able to use this approach to gain the choices in life that you’re yearning for.
NBN Co commissioned some research earlier in the year looking at how Australian’s were using the internet to generate additional income. The report found that the majority of Australians (80%) are looking to this as a way of finding fulfilment outside of work, and 1 in 4 are already earning additional income online. A similar study in the US found that 28% of those aged between 18 and 26 were working on their own, on the side. Of those almost all (96%) worked in the side hustle at least once per month, and 25% said they earned more the USD500 per month.
Certainly the increased comfort and normality of internet commerce is a key enabler in the rise of the side hustle trend around the world.
And whilst online businesses are perhaps the most popular of side hustle options, plenty of other opportunities exist too, from running a food stall at a local market, to teaching yoga classes of an evening, or pet sitting for people when they go on holidays.
Perhaps before we go too much further, let’s just define what a side hustle is to ensure everyone is on the same page. What we are talking about here is something that you do outside of your normal method of earning an income, that produces additional income. So in the Phil Knight example I mentioned earlier, by day he worked as an accountant, and then in the evening and on weekends, he built this little running shoe business.
Now in the Nike example this ultimately became his full time job, but that doesn’t have to be the objective. Maybe your side hustle is just a way to build up some savings, or pay down the mortgage quicker. There are all sorts of ways that you could use a side hustle to achieve your Financial Autonomy dream.
I used to work with a guy who hired out inflatable jumping castles for kids parties on the weekend. He ended up employing his daughter in the business full time.
Research undertaken by Manpower Group also highlighted how the side hustle concept linked to the idea of the “gig economy”, finding that 40% of Australian millennials preferred to work a number of part time jobs, rather a single, Monday to Friday, 9-5 job.
One aspect of the side hustle concept that I really like is that it enables you to give things a try, to experiment. To test ideas and see if real people are willing to part with their hard earned cash for your idea.
I’ve spoken in the past about the Lean Start Up methodology. A key concept in there is how many cycles can you go through of putting an idea out in the world, obtaining real customer feedback, tweaking your offer based on that feedback, and going back out to market again. The more times you can run through that cycle, the greater the likelihood you will find a sustainable business that you can grow. Working through those iterations as a side hustle can be fantastic, because you’re not relying on the new venture to put food on the table or a roof over your head. You can experiment and discover, and if those experiments don’t play out as you’d hope, you can live to fight another day.
A side hustle may also give you increased financial security. As I explored in The Security Illusion post (episode 11), being a full time employee feels like the low risk, secure option, but the reality can be the exact opposite. I was only listening to an interview with someone this morning who had worked as an architect at Mirvac in Brisbane, and in the space of 14 months that team went from 100 people to 4.
So having a side hustle might give you that safety net. A second source of income to help keep the household afloat until you find you next job. Or maybe it’s something you feel can be scaled up now that you have more time to devote to it. How great would it be to have a running start in this new chapter of your life – being self-employed?
So how might you get started on your side hustle journey? As you know, I’m a keen podcast consumer, so I’d suggest you check out the Side Hustle Nation show. He’s got over 250 episodes online, so scroll through and pick a few that jump out at you.
In the downloadable toolkit for this episode we’ve compiled a list of the 50 most popular side hustle ideas we’ve come across on the web. We’ve done the research leg-work for you here, so make sure you visit the financialautonomy.com.au website and grab yourself a copy of that.
It seems to me there are two mostly likely paths you could go down to find a side hustle that works for you. One is to think about your hobbies and passions. Is there scope to turn a dollar doing something in that space?
The other avenue is to consider what skills you have, and weather you can monetise those skills outside of your regular job.
So on the hobbies front, let’s say you love playing the guitar. Could you pick up some work in a cover band on the weekend? Or do guitar lessons. Maybe you could create an online course on learning the guitar, or tuning a guitar, or whatever. Perhaps you could import guitars and sell them on Ebay or Amazon.
There’s a cliché that if you love what you do, you’ll never work a day in your life. And whilst it is a cliché, I think it does hold some truth. Earning some money in a space that you love and are passionate about might be fantastically liberating. Chances are you have a community already around you who share your interest, which could be an incredibly useful sounding board for your plans, and perhaps even customers one day.
Then what about turning your skills into some extra cash. This is perhaps where the internet has provided the most liberation. If you’ve got design skills for instance, you could pick up work at 99 designs, AirTasker, Freelancer and no doubt plenty more. Of course in the case of AirTasker and Freelancer, there are opportunities for those with plenty of other skills too – from cleaning to web site design, there will be an avenue for you turn those skills you’ve acquired into extra money in your pocket.
Perhaps your skills point to selling a particular product that you know a lot about. Market places like Amazon and Ebay can open up enormous opportunities. Fulfilment by Amazon is an opportunity of enormous magnitude. I know of someone who designed a bag to hold medical items for children, such as epi-pens for instance. These bags could then be put in their school bag, or wherever they needed to go, and the parent could be confident everything that was needed was there, and there were instructions for carers if required.
She gets these manufactured in China and ships them to the Amazon warehouse in the UK. She can then market the product throughout Europe on Amazon, over 300 million potential customers, and anytime someone orders, Amazon takes care of the process from that point forward – picking the item, packaging it, and getting it delivered. And she can manage the entire thing from her study at home in Melbourne. What an incredible age we live in!
So what else to consider when exploring the side hustle route? It might be wise to consider whether what you are planning to do could conflict with your current employment. Many employment contracts will have conflict-of-interest polices, so be sure to have a read of that and get expert advice if you’re in any doubt. Even if you don’t work under a contract with any restrictions, things like poaching clients from your day job, or being involved in something that could cause reputational damage, are not likely to be a wise moves.
It may be a good idea to simply ask your employer “do you see any problems with what I’m planning to do?” Who knows, they may even be able to flick some opportunities your way.
If your side shuttle starts generating some consistent earnings it would be worth also having a chat with your accountant. Once turnover reaches $75,000, you are required to register for GST, and in some circumstances there can be value in registering even before you reach this threshold. Software like Xero can make your book-keeping really pretty simple, so don’t let those sort of things get out of control.
Well, that’s it for this episode, don’t forget to grab the toolkit for this episode that has a list of 50 side hustles you could try. Let’s get you another step closer to reaching your Financial Autonomy goals.
Also, we’ll have an interview episode out next week which will feature someone who has built a side hustle business in the past year. We’ll find out how she’s gone about it, and how she’s had to change and adapt as things have progressed. It’s a really energetic interview that I’m sure you’ll enjoy, so look out for that one.