The first time I heard the expression side hustle, I was sitting in an airboat in the swamps outside of New Orleans. Over the deafening sound of the motor, the captain explained that while ferrying tourists was his main source of income, he kept a small shellfish business on the side. He demonstrated by lifting some half full traps teeming with someone’s future pricey dinner.
Over the past few years, we’ve been hearing everyone from moonlighting CEOs to short order cooks refer to their bonus gigs as side hustles. What was once considered moonlighting, where a full-time employee might take on some extra work before a big occasion, has now given way to people supplementing their income with another – hopefully regular — revenue stream.
“There are a lot of people who think they have side hustles but are part of the gig economy,” says entrepreneurial consultant and side hustle expert Damon Brown whose most recent book is The Ultimate Bite-Sized Entrepreneur. “A person who drives a car around and picks up other people or rents out another part of their home to strangers, those aren’t actually side hustles. You’re actually working for someone else.”
So, what exactly is a side hustle? Brown explains: “A side hustle is something you create on your own, can pull the plug on your own and you can generate your own checks.” More importantly, “You’re not dependent on other people to pay you, you get it directly from the consumer.”
Brown believes the best side hustles incorporate 3 things: Who you are; Something in your current toolkit and who you want to serve. “If you can combine them, it can be long-lasting and lucrative,” he said.
Brown believes it’s important to differentiate the gig economy from the side hustle. In one, “You’re working for someone else’s side hustle, dream or startup. You’re essentially furnishing someone else’s dream.” In the other, you might just be padding your income or setting the groundwork for your retirement fund.
In the past, Brown and a partner launched and ultimately sold Cuddlr, an app that connected would-be huggers. “We bootstrapped the whole thing, we made a little profit. There was nothing about anyone else owning it,” Brown said.
Before starting your own side hustle, beware of two red flags:
- The non-compete aspects: In your current job, are you allowed to do anything on the side?
- Ownership issue: If you do come up with something great, does it become part of the company you work with or is it fully owned by you?
If you’re working for a company that pays your benefits — a company car or even your phone or laptop — your employer can argue that the benefits contribute to your idea and the side hustle. “People who are writing the contracts are very aware of side hustles,” Brown said. “Today’s side hustle can be tomorrow’s $10 million company,” he explains. And your employer might want a part of it.
So, what should you be mindful of on your route to side-hustle success?
- Proceed with caution: Don’t work on your passion project during office hours and expect to fully own it.
- Read your contract carefully: If it seems at all confusing, have your attorney give it a once-over. You don’t want your zillion dollar idea belonging to someone else.
- Be honest: “You don’t want to be doing something on the side and there’s even a hint that it’s affecting your day job,” says Brown.
- Beware: When Brown launched Cuddlr, he had to make sure people were safe. “We’re connecting people for hugs, but that can go south,” he explained. “Do your due diligence.”
- Plan for success: “If you have a simple idea and think 100 people will buy it what happens if 100,000 people buy it?” asks Brown. “The biggest issue I see with side hustles is that people don’t plan. What you have in place when a handful of people use their product isn’t the same as when a million people use it.”
- Define your goal: “Be definitive about where you want to be and know when you want to wrap things up” Says Brown. And set success markers for yourself.
If you’re worried your boss might see your side hustle as a challenge to your day job, use some of your new-found skills at work. “Say you learn how to market things better and you work at a University,” Brown says, “you can help them learn how to market themselves better.”
More from Ladders
- $50,000 in 5 months: 3 essential steps to turn a passion project into a business
- ‘Entrepreneurship porn’ paints a pretty picture of startup life, but glosses over the dangers
- 5 reasons why side hustles can benefit your mental health
- A guide to writing the perfect pitch to secure a side hustle
- How to use the Law of Attraction to thrive in your career