A shout-out to Pedro in Sydney who emailed a little while ago asking for assistance on a business plan for his Side Hustle. I love getting your emails, so if there’s a topic that you feel we should be covering here at Financial Autonomy, be sure to get in touch – the easiest way is simply responding to one of my Gaining CHOICE weekly emails.
An extra $10k earned through your Side Hustle and paid off your mortgage each year, could see you debt free years earlier than previously thought possible.
As we’ve explored in past episodes, a Side Hustle can be the key that unlocks Financial Autonomy for you. That little side business that brings in some extra cash, turbo charges your learning, and has the potential to enable a total career reinvention.
But how to get started, and I guess how to get started in a way that maximises your likelihood of success? Well, I’ve scoured the internet for various business plan templates, and thought about models I’ve used in the past. My experience is that a 40 page business plan is of no value to anyone, and is definitely not a good use of your Side Hustle creation time.
The reason highly detailed business plans are a waste of time is because they’re built on a whole lot of assumptions. A good portion of those assumptions will end up being wrong. As you get going with your business, you will learn things – what your customers actually want, how much they’re prepared to pay, extra expenses you hadn’t considered, and on it goes. And so to succeed, you need to adapt.
A useful business plan then, in my view, should be on a single page. I’ve created a template specifically for Side Hustles, which I’ll be stepping you through in today’s post. Download it here.
The Financial Autonomy Side Hustle business plan is broken up into 5 straightforward steps.
Step 1
What problem will your business solve, and for who? So for example if you plan on making a gym bag for women, what is wrong with what’s currently out there? What do women need in a gym bag that isn’t currently being provided for? And of course, who is your target market? In this example we’ve narrowed it down to women who go to the gym, so that’s an excellent start, but you could narrow it down still further. Is it for women you want to go to the gym before or after work, or for a mum who needs to drop her 2 year old at crèche along the way. Each of these different target audiences will have different needs, and certainly the marketing solution to get your product in front of each of these potential customers will differ.
A good process to help you get clear around the problem you will solve, and for who, is to use your social media connections to answer a simple questionnaire. Free tools like Survey Monkey can enable you to gain clarity and test your assumptions. Ideally, ask your friends to share the survey around, so you get a wide variety of responses. The insights you gain could save you many, many hours and plenty of dollars too.
Step 2
How will people learn about what you are offering? In my experience this is the bit most easily ignored or brushed over. It’s so easy to get caught up in the excitement of your idea that you just assume that once you put it out into the world, people will be breaking down your door to hand their money to you.
But of course business doesn’t work that way. Consumers are generally wary of new products. No one wants to be the first. And however beautiful your new web site is, it’s one of about 3 million new web sites launched just that day. The cliché is being a drop in the ocean, but when it comes to the internet, even that single drop is probably generous.
The foundation here is step 1 – being clear on who your product is for. (And for clarity, when I say product, it need not be a physical product. It could equally be a service. So I mean product in a broad sense – your offering – whatever that is).
So how will you reach your target market? Word of mouth, a local farmers market, social media promotion, or flyers in people’s letterbox. There’s plenty of possibilities, each with their own pro’s and con’s. In your Side Hustle business plan, get down some ideas that make sense. You can flesh this out into a marketing plan if you wish. Just recognise, this bit is super important to your success – don’t just skim past it. You might have the best product around, but if consumers don’t know about it, or just don’t care, you won’t be in business very long.
Step 3
The dollars. What will it cost to deliver your product or service? What do you need to charge to make this a viable business? How will they pay you?
Beware of the common trap of under-pricing your product. There’s a temptation to set a low price to make it easy to get sales early on. To win customers by being cheap. Ensure you give thought to charging enough so that you can invest back in the business to fuel growth. I’ve seen plenty of small businesses fade into oblivion not because there wasn’t customers or sales, but because the owner just wasn’t making enough to enable growth and sustainability. Your interest in your Side Hustle business will wain quickly if it becomes a form of modern day slavery.
Step 4
What does success look like? This is the classic “start with the end in mind” approach.
Be clear at the outset what your goal for the Side Hustle is. Is it to earn some extra cash to pay off the mortgage, or cover an annual holiday? Our perhaps it’s to build a business that will enable you to one day quit your current job.
Whatever your definition of success is, put some numbers around it. Perhaps success is earning an extra $2,000 a month, or being able to leave your current job in 12 months. Always quantify.
Having clarity here can really help in avoiding the pitfalls of saying yes to everyone. There’s a great quote I have up in my wardrobe – “you can do anything, but you can’t do everything”. Ensure that as you develop your Side Hustle business, each decision that you make gets you closer to the success that you have defined in this step.
Step 5
What are the 3 most critical things that need to occur for your Side Hustle to go ahead and become successful? How can you make them happen?
This is a step that I found was often lacking in the various business plan templates that I researched. I’ve talked back in episode 19 about how procrastination can be the killer of your dreams, and it is often fuelled by overwhelm – so many things to do and not knowing where to start.
That’s where this final step in your Side Hustle business plan is so important. Identify 3 things that need to happen if this idea of yours is to bear fruit. Taking the gym bag idea from earlier, the 3 things could be – creating a product proto-type, finding a manufacturer, and selling at least 10 bags to people outside of your family and friends within a month of your initial product run arriving. If these things aren’t achieved, your Side Hustle idea will shrivel up and die. So focus in on ticking these things off. I’d use a project management tool such as Trello, which I couldn’t live without – and it’s free. But you could also use something like Excel too if you prefer.
Well, that’s how I suggest you create a business plan for your Side Hustle. Be sure to download the free template.
Good luck in your Side Hustle adventure.
Resources & Links
- Gaining Choice – Newsletter
- 1 Page Side Hustle Business Plan
- Procrastination: 9 tips to combat this number one killer of Financial Autonomy dreams
- Trello
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