I’ve interviewed numerous Side Hustlers over the past 3 years, including Side Hustle guru Nick Loper from the Side Hustle Show, and have conducted my own fair share of entrepreneurial experiments. The time has come therefore to provide the definitive guide to starting a Side Hustle in Australia.
A Side Hustle could be the way you earn some extra dollars to pay for an overseas trip. Perhaps it accelerates the repayment of your mortgage. Your ambitions might be grander, with the Side Hustle being your entrée into becoming your own boss and pursuing self-employment or a major career change. For many, pursuing a Side Hustle is a way to develop new skills, making them more employable and therefore resilient in our turbulent economic world.
Side Hustles can certainly provide choice, and of course, that’s what we’re all about here at Financial Autonomy. So how can you get started with your Side Hustle here in Australia?
In summary, here’s the process to start your Side Hustle:
- Determine your why – what is the goal here?
- Research ideas
- Choose an idea to move forward with
- Create a Side Hustle business plan to test your idea
- Determine your Side Hustle marketing plan – why is what you’re offering better?
- Get the details sorted – ABN, Merchant facilities, etc.
- Roll-out your Side Hustle business plan
- Evaluate, learn, modify
Let’s now dig into these steps in some detail so you can convert your Side Hustle thoughts into valuable experience and dollars in your bank account.
Why have a Side Hustle?
There are plenty of potential reasons to start a Side Hustle. To give yourself the best chance of success, you need to have clarity on why you’re going to embark on this adventure. Here’s some common reasons:
- Make some extra dollars
- Transition to self-employment
- Learn new skills
- See if this idea I’ve got is as awesome as I think it is
- A new hobby or interest
Step 1 in successfully starting your Side Hustle requires some self-reflection as to why you are starting it. The strategy you develop for an objective of earning a few extra dollars for an annual holiday, will be vastly different to a strategy where the goal is to develop the Side Hustle into your full-time occupation.
Once you have clarity on your why, determine some quantifiable goals that you can set. Taking the two potential whys mentioned in the previous section, if your goal is to make enough for an annual holiday, quantify that in dollar terms – let’s say $10,000 for example. It might even be helpful to then break that down further into how much you need to make each month to achieve that goal.
If instead you were shooting towards a career change and moving to self-employment perhaps the quantifiable goal might be to have made the move by a specified date. Now of course there will be some dollar milestones that will need to be hit, but those can be developed in step 4 when you build your Side Hustle business plan. For now just focus on a key measurable target that aligns directly to your why.
If your goal is to develop new skills to advance your career, volunteering at a not for profit could be a good way to go. You not only get the experience, but you broaden your network, and demonstrate positive traits around helping others. Clarity on your why informs the opportunities that you could pursue.
I’m going to hit you straight up with an important truth.
There is no perfect idea.
James Dyson famously created 5,126 versions of his Dyson vacuum cleaner before finally being successful on the 5,127th attempt. He learnt from each version, getting closer and closer to success with each iteration.
AirBnB is a huge success now but originally it was just two guys trying to earn extra dollars by renting out some air mattresses on the floor of their apartment when a big conference was in town. After that initial very small success they worked on a flat mate matching service, and launched the AirBnB concept at least 4 times, with the advantage of minimal traction from previous efforts meaning that no-one noticed they were launching something that had in fact been launched before.
It’s easy to be frozen in the starting blocks of your Side Hustle journey due to indecision on what idea to pursue. So where to start?
Here’s a few questions worth reflecting on:
- What do I enjoy doing that other people spend money on?
- What do I do that others have noticed I’m good at?
- What skills do I possess right now that people will pay money for?
- What are the topics I tend to look out for on Youtube, Reddit, online newsletters, etc? Is there an opportunity in these areas for me to start a business?
Come up with a list of potential ideas for your Side Hustle and do some Google research. You might find the SWOT framework useful here as you conduct your research. Think about these areas in relation to your ability to run a business in this space:
Strengths – what do you bring to the game that is important and impactful?
Weaknesses – what are your blind-spots or areas where you will need to pull in others?
Opportunities – where is the gap in the market that you can fill?
Threats – Is there a risk technology change will make your idea redundant? Are there numerous strong competitors that would make your entry into the market very difficult?
Choose an idea to move forward with
You’ve come up with some ideas and researched them to narrow the field. Now it’s time to choose one and move forward. As already mentioned, paralysis here is common, so don’t let yourself fall in this trap. Some key things to remember here:
- Whatever idea you go with will almost guaranteed need some refining as a minimum, and a major re-think is very possible. So don’t obsess over your Side Hustle idea being perfect. It’s far more important to get started and learn as you go.
- The idea of a Side Hustle is that it is a low risk way of trying a business idea. It’s low risk because you’re not giving up your day job to do it, and it typically requires only a small financial investment. Given it is low risk, if it fails, it’s no big deal.Get stuck in and learn along the way. The worst that can happen – the business just doesn’t work – is not really very terrible.
Create a Side Hustle business plan to test your idea
You’ve selected the Side Hustle idea that you’re going to start with. Now let’s get this thing off the ground.
You need a plan. Without a plan you’re running around like the classic headless chook.
Back in episode 90 I devoted an entire episode to creating a Side Hustle business plan.
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. 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 encourage you to download for free here.
The key elements are (some of which we’ve covered earlier):
- What problem will your business solve, and for who?
- How will people learn about what you are offering?
- The dollars. What will it cost to deliver your product or service?
- What does success look like?
- What are the 3 most critical things that need to occur for your Side Hustle to go ahead and become successful?
Once you’ve created your 1 Page Business Plan I suggest you use a tool like Trello (Youtube video on how to use Trello) with 3 lists – things to do, doing, and done.
Start filling up your things to do list from your Business Plan, and if you’re anything like me, you’ll think of new things that need doing when you’re in the supermarket or on the train, so have a mechanism to jot these down in your phone.
Determine your Side Hustle marketing plan – why is what you’re offering better?
You’ve determined the idea that you’re going to move forward with in starting your Side Hustle. And you’ve sketched out a 1 page business plan to provide some coherence as you move forward.
Step 2 in your business plan was to consider how people will learn about your offering. It’s time now to develop this some more. You might have an awesome Side Hustle idea, but unless you can put it in front of people interested in your idea, with a willingness and capacity to pay for it, then you’re dead in the water.
Step 1 is to determine your target market. “Everyone” is never the answer. In fact, the more niche your offering and target market, the better. This is because you can focus your marketing effort more specifically on their needs, requiring fewer resources to get noticed. Your Side Hustle is not creating the next Coke. Broad awareness is not realistic or even desirable.
Your target market might be “people who attend farmers markets in the Melbourne metro area who are vegans”. Even that’s pretty broad, but it’s a good start.
Step 2 – why will they buy? What problem are you solving? And why is your solution better than your competitors? Perhaps your target market will buy from you because your packaging is fully recyclable. Or maybe the design is more attractive. Perhaps you help with implementation, an area people often get stuck.
The jargon here is your USP – Unique Selling Point. A successful USP should fit in a single sentence.
As an example our USP at Financial Autonomy is helping Australians gain choice in life through a better understanding of money and finances.
Step 3 – how will your target market learn about your offering? This is the step where you will spend some money – Facebook boosts, Google ads, or old fashioned (but still effective) letter box drops, to name a few. You’re going to want to communicate your USP to your target market. And you want to do it at the lowest cost per sale. A key then in step 3 is measurement. You need to track what you spend, and what it delivers.
It’s quite possible that social media will be an important element of your marketing, and so you could rationalise that your costs will be zero or near enough too. It’s free to post on social media right?
True enough, but after your initial family and friends (most of whom are probably not your target market anyhow) give you a smiley face or thumbs up, how is anyone else in your target market going to learn about your awesome solution to their problem?
Be prepared to spend some money. It might only be $10 per day – that’s fine – but when planning to start your Side Hustle, a marketing budget and a plan around how you will get your message out to your ideal customers is essential.
Step 4 – how will you convert interest into sales? Page likes are great, but they don’t pay the bills.
Depending on the price point of what you are trying to sell, either your online advertising will take interested prospective customers straight to a web page where they can purchase, or else to some sort of free or low cost offer where you can deliver value in exchange for their email address.
This second approach is known as a funnel – it provides prospective customers the opportunity to get to know and understand what you do and how you can help, so that they can determine whether buying what you are offering makes sense for them.
If your business is not online – eg. a stall at farmers markets – then converting interest into sales comes down to the staff on your stall being passionate and knowledgeable about your product. Even in the “real world” it might still be possible to collect email addresses and develop a funnel to nurture interest over time.
Step 5 – what can you do to encourage word of mouth referrals? Ever since humans started trading goods, recommendations and referrals from others have been a core element. When we hand over our hard-earned money for a product or service, we trust that it will deliver what is promised. Having trust in a complete stranger is challenging. But having trust in a business where your friend or neighbor has had past successful dealings is far less risky. As a consumer then, referrals are hugely valuable.
Doing all that you can to encourage word of mouth referral should be an important piece of your marketing plan. And the great thing is social media can potentially make this more impactful than ever. This is especially so if what you do is visually appealing.
Get the details sorted – ABN, Merchant facilities, etc.
It’s perhaps a little dull, but in starting your Side Hustle in Australia, you do need to get some basic infrastructure sorted.
An ABN – Australian Business Number – is a good place to start as you will need to quote this when opening accounts with suppliers. ABN’s are free to obtain. You can apply here.
GST registration is required where your turnover is greater than $75,000 per year. Most Side Hustles will do less than this, at least initially, so you can hopefully avoid this compliance headache, but keep it in mind as you grow.
You will want to register your business name, which is done here via ASIC. A small fee applies.
People need to pay you if this endeavour is to have any legs, so next determine how you will offer merchant facilities. Most online platforms offer built in merchant facilities, so you don’t need to get your own. If you want to process transaction outside of the platform though, you might need a physical solution. Talk to your bank and you could also explore services like Stripe and Square.
At some point in the first year or two, have a chat with an accountant. They can fill you in on the items required by the Tax Office, and potentially direct you on the best structure through which to operate your business.
Roll-out your Side Hustle business plan
The name says it all here. You’ve got all of your ducks in a row now – time to launch!
Action that marketing plan and make the world a better place. Expects some setbacks. Expect things to take longer than you had anticipated. Smile lots when you make your first sale.
Evaluate, learn, modify
Maybe your Side Hustle will grow and become your main income earner, or maybe it won’t. But what it will certainly provide is learnings.
When you developed your business plan, you made assumptions around what your target customer wanted. But it’s not until you put your idea in front of them that you learn whether you are correct. Learning is a fundamental reason for undertaking a Side Hustle in the first place. Side Hustles are a low risk way to test an idea, and your entrepreneurial talents.
Measure results against the goals you set in your Business Plan. Ask questions wherever you can. Email customers and enquire how they are going. Seek feedback at every opportunity.
Then be prepared to respond and adapt. You may have thought that the world would be beating down your door for bright yellow umbrellas, but if you get feedback that they love your umbrellas, but bright yellow isn’t to their liking, consider adding some new colours.
It could even be that your initial Side Hustle just doesn’t fly. Sometimes this is as simple as no sales, but more often it’s a realisation that the money you are making for the hours that you’re putting in, just doesn’t make sense.
Whilst there might be some disappointment, recognise that:
- This is precisely why you embarked on this endeavour as a Side Hustle and not through quitting your regular day job and going all-in – failure is not catastrophic.
- You will have learnt about things like digital marketing. Setting prices. Dealing with customers, managing money, and lots, lots more. You’ve basically completed a hands-on business degree. How can you get value form these learnings?
Good luck on your Side Hustle journey and let me know how you get on – I’d love to cheer you on!
In my book Financial Autonomy – the money book that gives you choice, we step through the framework below. The content covered in this blog and podcast explore each of these steps. Learn more – down a free sample of the first chapter here.
Resources & Links
- Apply for an ABN
- Register for GST
- Register your Business Name
- 1 Page Business Plan – Free Download
- How to create a business plan for your Side Hustle – Episode 90