Launching a side hustle can be a great way to indulge a passion, earn extra income, or plan for a career change. Because of these benefits, as well as their inherent flexibility, side gigs are extremely popular.
If you’re one of the many Americans working a side gig, you may be wondering how to make it even more profitable (without it sucking up more of your time). The new year is the perfect opportunity to reevaluate your business and set new goals to take your gig to the next level. Whether you have a weekend side hustle or are growing a new business, here’s how to plan for a more profitable and productive 2020:
1. Establish a Purpose for Your Side-Hustle
Think about the purpose of your side gig income. Are you saving for a new home or car? Are you trying to branch into a new career? Are you simply trying to maximize your earnings each month?
Knowing exactly why you’re working can help you establish a concrete plan. Maybe you need to save $20,000 for a down payment on a home. Armed with this knowledge, you can break down how much you need to make from your side hustle each month to reach you goal in a reasonable time frame. Plus, having a purpose in mind can keep you focused so you aren’t tempted to spend your side-gig income on nonessentials.
2. Set a Goal for Your 2020 Earnings
First, review your earnings from 2019. If you used accounting software to track your income and expenses, you can look at your profit and loss statement. If not, you can calculate your income by looking at your bank statements. Once you know how much you made in 2019, you can use that information to set a new financial goal for 2020.
If you want to increase your income, set a goal with a specific measurement in mind. For example, you may decide to increase your side hustle income by 10 percent over the course of the year. If you made $1,122 per month in 2019, you’d need to make $1,234.20 per month in 2020, or $14,810.40 over the course of the entire year.
If leveling up your side hustle has more to do with something outside of finances, you could focus on decreasing the number of hours you work while maintaining your overall earnings. To accomplish this goal, you’d need to get better-paying clients or pick more lucrative gigs. If you go this route, it is once again helpful to keep hard numbers in mind. For instance, you could say, “I want to work two hours less per week while maintaining $1,122 in monthly income.” This will give you a specific target to aim for.
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3. Invest in Yourself
Learning a new skill or otherwise investing in yourself can inspire you to strive for more, mitigate burnout, and even increase your earning potential. Here are a few ideas for self-development in 2020:
- Attend a conference: At a conference, you can network with other professionals, learn the latest technology and trends, and pick up some new best practices to improve your business.
- Learn a new skill: Consider learning a new skill to complement the work you already do. For example, if you’re a freelance writer, you can learn basic graphic design and offer design services along with your copywriting work.
- Get certified: In some fields, obtaining a certification can increase your credibility and skills, allowing you to charge higher rates.
- Give customers a better experience: No matter your business, there are ways you can improve your clients’ experiences. If you’re a rideshare driver, provide passengers with phone chargers, mints, and water to increase your chances of getting a tip. If you’re a pet sitter, take pictures of your clients’ pets and send them to their owners while they’re at work to give them peace of mind.
- Launch a new website: A professional-looking website can be an effective marketing tool that helps new clients find you. You can start a website yourself with services like Wix or WordPress, or you can hire a professional designer to do it for you.
4. Use the Best Financial Products for Your Situation
Finally, it’s important to treat your side gig like a real business — because it is one! That means keeping your finances in order.
Keep your business and personal expenses separate by opening standalone checking and savings accounts solely for your side gig. For the savings account, look for a high-yield account so your money can grow faster.
You likely have some expenses with your side gig, such as fuel for your car, office supplies, or marketing materials. If that’s the case, you may want to apply for a business credit card. Using a business card to pay for those expenses can help you earn valuable rewards on your purchases. Just make sure you never use your business credit card for personal expenses.
Finally, purchase bookkeeping software if you haven’t already. Accounting software like QuickBooks or FreshBooks can make managing your side-hustle income much easier. It will also make doing your taxes much simpler.
While the year is winding down, you can use the remaining time to review your side gig earnings and plan for an even bigger year in 2020. By setting specific goals for your business in the new year, you can hit the ground running in January and take your side gig — and yourself — to the next level.
Kat Tretina is a freelance personal finance writer based in Orlando.