In today's gig economy, people are thinking outside of the box for ways to increase their cash flow, and many are turning to side hustles to do so. If you plan ahead, you can use the extra working capital from your side hustle to learn new skills, make more money and do more of the things you love.
Getting started doesn't have to be difficult. You can make the shift with just a few easy steps.
1. Research your industry.
When it comes to side hustles, understanding your industry is key to profitability. Maybe you've had a couple false starts because the timing wasn't right. Maybe you are just starting out and having trouble maintaining a focus. If you are trying to find your footing, research your industry more deeply.
You can start generating working capital by evaluating your product or service and exploring how it fulfills a need. Your side hustle will be most profitable if it resonates with your target audience by addressing a gap in the market.
For example, before I developed my side hustle, I was experiencing a major transition: leaving my corporate job to focus on my newborn son. Through this challenge, I discovered that there are many other parents with the same dilemma.
Outsourcing to a trusted team makes for a well-run organization, which leads to profitability.
This gap in the market was a starting point for me. I did my homework and launched MORE, spaces where working parents can go to grow personally and professionally—without leaving their families behind.
The research paid off and my side hustle grew into a lifestyle brand that both fills a gap in the market and increases cash flow.
2. Create a sales and marketing plan.
Your sales and marketing plan can be the lifeblood of your growing side hustle.
1. Start with an overview of where you are now. This will help you identify the areas in which your side hustle thrives, where you could use some support and give you a picture of your financial stability.
2. Next, make a list of your marketing goals. What do you hope to achieve and how do you plan to get there?
3. Narrow in on your target audience. Who does your side hustle serve? How can you increase engagement and create a loyal following?
4. Make a budget. To gauge profitability, you need to understand how much is coming in and how much is going out. What expenses do you expect and how will you cover the cost? You will likely need some working capital to get your side hustle up and running. You may need to open a line of credit, use business credit cards or a small business loan to manage cash flow while you grow.
3. Automate processes to increase your efficiency.
Automating processes can help boost efficiency and cut down on cost to ensure you have the working capital you need to keep growing. However, it's important to focus on the areas of your business where automation makes the most sense while still maintaining a human focus.
For most, the best use of automation is to streamline task management and communication. Using tools and apps to manage communication and keep track of projects is a great way to systematize predictable aspects of the business. The goal is to create once, but engage and captivate your audience time and time again.
Email automation is another way to automate with a personal touch. You can pre-write emails, newsletters and other content to streamline without losing the voice and tone that connects you to your audience.
4. Build a team through outsourcing.
Building a team that believes in your side hustle and takes ownership for their contribution to its success is part of running a profitable business.
Hiring selectively and slowly will allow you to free up working capital for other aspects of the side hustle while also allowing you to get to know the strengths and skills of your people. Lean on them to help you manage cash flow, and let them give their input and take on skilled tasks for which you may be less knowledgeable. Outsourcing to a trusted team makes for a well-run organization, which leads to profitability.
So start from a place of passion—growing your side hustle takes effort and patience. But with strategic planning, clear financial goals and a dedicated team, you can generate enough working capital to turn your side hustle into a profitable business.
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