Are You Ready to Start a Side Business?

This post may contain affiliate links. Please read my disclosure for more information.

Today I’m breaking down the difference between side hustle vs. business if you want to make extra money fast.

Chances are if you’ve searched for “how to make more money” You’ve seen every app and service that wants to overwork you for less than minimum wage. 

What’s a Side Hustle vs. a Side Business?

A side gig is a one time job. You can take someone for a ride with Uber or put together some Ikea furniture through TaskRabbit but that’s it for you and that customer. You can’t nurture that relationship to get referrals for more riders or upsell someone to assemble more furniture because it’s not your business.

A side business, on the other hand, can be much more lucrative in that you have control of the price, you can market yourself however you like and you can get repeat customers. My first business was a t-shirt design business. I designed popular shirts and people could buy as many as they wanted. I even made requests for custom shirts. I also rented out my guest room on Airbnb. I set the price, the fees were low and transparent, and our guests could easily share our place with their friends if they wanted to.

If you’re not going to watch the video above then I’ll let you know, a side business is much more lucrative than a side gig or side hustle. But, I didn’t start with a side business. I spent almost two years doing side hustles. We paid off $78K of debt in two years thanks to almost exclusively side hustles.

So here’s the thing the real questions are “When should I do a side hustle?” and “When should I start a side business?” so that’s how I’m going to compare side hustle vs business.

When should you do a side hustle?

For people starting out who’ve never made any money on the side before. It’s a good idea to get some experience in making your own money before you go out and do it yourself. See how another business manages 1099 contractors so you can see how it’s done. Get a real world education in running a business while making some money.

If you’re scared to start a side business then start a side hustle. Do it long enough to make some money, put it in a savings account or toward debt then calculate how much you’re making hourly and how much is being takend out in fees and then how much you’ll have to pay in taxes. Let your anger about that fuel you into starting your own side business.

People who want to make some money fast and get out. If you just want to make some money for the holidays or a birthday or maybe you need extra to pay a big bill but you don’t want or need extra money coming in every month, a side business is not for you. Side businesses take work every month of the year and while it’s not intended to replace your full-time job some people don’t want that commitment. If that’s you then stick to the gigs.

When should you start a side business?

First, your side gig just isn’t making what it used to. If you’ve been working a side gig long enough to see a decline in pay, you’ve been working it for too long. When you work your side business you want income to increase and it usually will if you do it right.

But Side gig companies are always trying to lower what they pay contractors (which is what you are) to increase their bottom line. And because shareholders demand an increased revenue quarter over quarter this will only get worse for the worker.

The side gig you’re doing is oversaturated with workers. Grocery shoppers saw a lot of this in 2020. Not only did companies get overwhelmed with shoppers, but people also started creating bots that would snatch high-earning shops making it almost impossible to make money. If there isn’t enough work to go around, don’t try another app, start your own thing.

You’re ready to make more money but you don’t want to quit your day job. There are fundamental differences between a side job and being a full-time entrepreneur. There are many side businesses that can turn into full-time businesses, I’m living proof of that, but realistically you’ll only see $1K or $2K extra per month.

That’s awesome of you’re fully employed, great to have if you lose your job, but not something you can plan to live off of unless you already have a trust fund to support you. If you want to create a side business that eventually allows you to leave you job that’s awesome but you’ll be looking at a particular kind of side business and looking at it in a different way than someone who just wants to supplement and secure their income.

And if you’re ready to start a side business I’ve got a side business starter kit available that’ll debunk some myths, help you figure out what you should do, and how to do it as frugally as possible. I’ll link to it below. And check out some of my other videos over here if you want more info on making extra money without lame survey sites and task apps.