For today’s employees, the secret to financial stability isn’t a college education, a traditional 9-to-5 job, or employer loyalty. Following Warren Buffet’s advice, more people than ever before are turning to entrepreneurship to help provide for their families while saving for long-term goals. Yet, with various options for becoming your own boss, how can you tell which one will work best for you? If you are a full-time employee considering a side hustle to keep up with today’s fast-paced economy, here are some of the most popular side hustles for achieving your goals.
Basics of the Gig Economy
Before diving into the different ways you can make income in your spare time, it’s essential to understand the gig economy and the basics of a side hustle. The gig economy is a labor market where individuals select temporary, contract labor instead of permanent jobs. The gig economy allows workers flexibility to set their schedules and complete work in their spare time. Employers also enjoy specific benefits from hiring independent contractors instead of employees because of tax benefits and reduced labor costs.
What Steps Should I Take Before Starting a Side Hustle?
As someone interested in starting a side hustle, there are several steps you should take to set your business up for long-term success. These steps include selecting the proper business structure, planning out your quarterly and annual tax liability, selecting the correct type of work for your lifestyle, and choosing the right payment processing company. Each step is equally essential on your road to success as an independent contractor, so let’s discuss why these steps are crucial.
Selecting A Business Structure for Your Side Hustle
There are several business structures to consider when it comes to building your own business or starting a side hustle. There are sole proprietorships, limited liability companies, and corporations to decide between, each with its strengths and weaknesses.
Because there are profound tax implications as self-employed people pay taxes and both an employee and an employer, your business structure matters. For this reason, it’s important to consult both an attorney and tax advisor while planning which structure is right for your business. The proper business structure will also protect your assets from any business liability while reducing other financial business risks if adequately handled. Even though it might cost several hundred dollars to select an entity and file business paperwork, this cost is well worth it.
Tax Considerations with a Side Hustle
Handling taxes as an employee is primarily straightforward. You have a specific wage, and your employer collects taxes for the state and local government on your behalf while matching your tax payment as your employer. Yet, business owners often have more complex tax needs, which you should consider before launching your business. As you earn more from a side hustle, you also pay more in taxes. However, owning your own business also helps you minimize your tax liability, as the expenses you use to create and run your business are typically tax-deductible. For this reason, you should meet with an accountant, separate your personal and business bank accounts, and plan for your higher tax obligations ahead of time each quarter.
For today’s employees, the secret to financial stability isn’t a college education, a traditional 9-to-5 job, or employer loyalty. Following Warren Buffet’s advice, more people than ever before are turning to entrepreneurship to help provide for their families while saving for long-term goals. Yet, with various options for becoming your own boss, how can you tell which one will work best for you? If you are a full-time employee considering a side hustle to keep up with today’s fast-paced economy, here are some of the most popular side hustles for achieving your goals.
Choosing the Right Work for Your Side Hustle
After forming an entity for your self-employment business and considering long-term tax implications, it’s time to choose the proper work for your side hustle. When you need income quickly, it can be easy to dive into a gig that pays fast. However, there might be better gigs available that match your work preferences and income requirements which you can find by conducting job research. Here are some popular side hustles that can pay above the minimum wage:
Renting out commercial or residential space.
Sites like Airbnb and VRBO make it simple to take unused space in your house or commercial space and lease it out to those who need it. This income isn’t passive, as it requires you to set up your area for visitors, clean up after guests, and prepare for new renters. However, it’s one side hustle that you can outsource to other parties’ management, making it an ideal option for workers with a limited amount of time to dedicate to their business.
Driving clients using a ridesharing app.
Rideshare workers often earn around $11 per hour after considering vehicle maintenance, cleaning, and other hidden costs. Although that rate doesn’t exceed what you can achieve with other side gigs, the money you earn ridesharing is typically available right away. Ridesharing apps make it convenient to bring in extra income quickly but limit your income earning potential.
Getting freelance clients using popular marketplace sites.
If you already have a specific skill set, you can build on it by working for yourself as a freelancer. Several popular sites like Freelancer.com and Upwork.com make it simple to begin earning money quickly. You can offer professional and creative services to clients, set your rates, and work specific hours as a freelance worker. It’s an excellent option for someone searching to replace their traditional employment with their own small business.
Becoming a babysitter or nanny with popular websites.
Websites like Cite.com help side workers find nannying and babysitting positions in their local area. You can even earn more as an individual with CPR and First Aid certifications. But these jobs aren’t only available for those looking to watch other people. On several of these platforms, you can also walk, dog sit, and care for pets, making it an ideal option for those who prefer caring for our four-legged companions.
Selecting A Payment Processing Company
Depending on the side hustle you select, you may need a payment processor to collect your clients’ wages and fees. While some sites like Airbnb combine a messaging app and payment processor to make it simple for gig economy workers to generate income quickly, some gig workers prefer to work in their own way. For instance, if you want to rent your house space privately, using a website like Craigslist, you’ll need a way to collect payments from clients.
There are several flat-fee providers that are good for brand new businesses. But as your business grows and you start transacting more per month, you will want to look at processors who charge a lower fee on each transaction.
Wrap Up
Building your own business or starting a side hustle is an exciting step for employees looking to earn extra income during their spare time. Although there are many things to consider, such as who will provide you with exceptional payment processing services, you’re ready to bring in additional income each month once you know the details. And after a few months of experience, you might earn enough to replace your full-time position and transition to being your own boss. Give these side hustle jobs some thought and consider which one matches your specific needs and lifestyle.
