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Strained budgets. Deferred dreams. A surplus of time. There are many reasons people start a side business. The ones that succeed, though, are planned just as carefully as their fullblown counterparts. Here are some points to consider before moonlighting in your spare time.
Your barbecue sauce is universally raved about at neighborhood block parties. Friends love your floral arrangements. Your handmade jewelry is a hit with the moms at your children’s school. You find fulfillment with such projects in your spare time. But when is a hobby a solid foundation for a business?
According to Susan Urquhart-Brown, small business coach at CareerSteps123.com and author of The Accidental Entrepreneur: 50 Things I Wish Someone Had Told Me About Starting a Business, it’s pretty simple. “You’d have to be making some money at it, first of all,” she says. “It takes desire and seriousness for a hobby to become a viable business.”
First and foremost, it’s critical to evaluate your priorities to make sure you have the capacity to tackle a side business in addition to your day job and other commitments. “How much time in your life do you have to devote to work?” Urquhart-Brown says. “Most people have a family, a significant other, kids and other things they like to do.”
Then, you need to take a no-holds-barred look at your idea. “Can somebody make money [off it]? Can someone save money? Does it solve a problem, or does it give people personal satisfaction?” offers John Vanston, author of the award-winning book Minitrends and chairman of Technology Futures, Inc.
It’s a great idea to vet your side business idea with someone objective who can give you honest feedback. “Seek out people who have already done it, and talk to them,” suggests Urquhart-Brown.
“I also think associations [groups or clubs with a particular focus] can be very useful,” Vanston says. “There are associations for everything from bearded Santa Clauses to nuclear reactors, and they’re a great place to start.” He suggests asking your local chamber of commerce for a list of them.
SCORE, a program funded in part by the U.S. Small Business Administration, offers free business counseling, mentoring and other resources for would-be entrepreneurs. With chapters across the country, as well as online workshops, it’s an accessible way to tap into expert advice from those who have already taken the plunge into entrepreneurship. In addition, private career coaches also can guide you through the process of starting a business, although you’ll have to pay them.
Once you’ve decided to move forward, starting a side venture is much like starting any small business. At the onset, Urquhart-Brown recommends doing your research. “Now it is so easy to do informal market research with the Internet,” she says. “Find out what makes you unique in providing your product or service because you will always have competition.” Vanston agrees that defining your market is critical for success, even in the smallest side business. “If you have a business and nobody buys [your product or service], then it really doesn’t matter,” he says.
A roadmap is a necessity as you connect the dots between dream and reality. “[You need to create] an action plan or a business plan,” stresses Urquhart-Brown. “Most clients I work with will not be getting investors, so this is just for them to develop their ideas. It can be done simply in one to two pages—it’s kind of a GPS for your business.”
The act of writing a plan forces side business owners to think through their goals and create a timeline of tactics to reach them. It can be as simple as designating Monday for marketing and Thursday for doing the books, which can keep you on track when you have personal and professional priorities competing for your free time. “Set up specific times every week when you are doing something to move yourself forward,” Urquhart-Brown advises.
Even if you’re not devoting 80 hours a week to it, a side business counts as a business—period. This means you are responsible for obtaining the licenses, insurance or permits required in your industry or geographic location. If you sell products, you need to make sure you are charging and paying the appropriate federal and state taxes. “This is the kind of legal research you’ll need to do, depending on what kind of business you are in,” says Urquhart-Brown.
In the end, for those who are passionate about their side ventures, it’s all worth it. “If you can combine your interests, love and expertise in a side business, so much the better,” concludes Vanston. “It doesn’t hurt to have something in your back pocket.”