Some entrepreneurs don’t want to be limited to just one business; sometimes the best way to get started as a business owner is to start multiple side hustles. Starting a few different side businesses at the same time, and learning how to manage multiple side hustles, can help you test the market for your side hustle business ideas and explore a variety of interests.
Before you get started with multiple side hustles, it’s important to spend some time on business planning and strategy. Make sure you give yourself the framework needed to be successful in each of your side hustles.
Let’s take a closer look at a few tips and insights on how to be a master of multiple side hustles.
Can I Have Multiple Side Hustles?
“Starting a business” doesn’t always mean that the business must be focused on just one product, service or industry. There is nothing keeping you from having multiple side hustles! If you have enough time and energy, you can multitask and branch out with multiple side hustles. With careful planning and consistent time management, you’ll be amazed at how much you can accomplish between your multiple side hustles.
While you could theoretically start as many side hustles as you want, you might want to keep your side businesses focused on three or less to keep your workload manageable. A survey from Payoneer found that most freelancers stay focused on no more than three simultaneous projects at once. This is a good rule of thumb for side hustles, too.
How Do You Manage Two Side Hustles (Or More)?
Planning is the first step to starting multiple side hustles. Walk through the following checklist and analyze your readiness for each step:
1. Make a Business Plan
Commit to your own success by putting together a business plan and a solid overview of what you need to accomplish before officially starting your side hustles. Understand in advance where you have crossover between your side hustles so you can maximize your time. Remember that time is money; the more time you can save, the more money you have the potential to make!
2. Prioritize Your To-Dos
Once you have a list of to-do actions, determine which need to come first. Prioritize not only the actions required to start your side hustle business but also activities from your everyday life and to-do list. Your side hustle will inevitably take time away from your current schedule; understand where you can give a little and which tasks and priorities take precedence and cannot be dropped.
3. Get Precise About Time Management
Before getting started with your side hustles, do a complete audit of how you use your time for a few days. Keep track of each activity and how long each task takes.
If you have something you need to do each day, such as dropping kids off at school or going to your day job, make sure that you also track travel time for these activities to provide a true representation of what kind of time is involved for each activity in your day.
Next, determine how much time you can devote to each side hustle. Be realistic so you don’t overbook your time. Once you know how much time is available, research your chosen side hustles and resolve what amount of time can be dedicated to each.
4. Organize Your Daily Calendar
Keeping an orderly schedule will also help you keep your side hustle business organized. Decide how to schedule your calendar in a way that serves you best before you commit to anything. Figure out if you will be working on your side hustles a few hours every day or committing a full day out of the week for your small business.
Once you decide what your schedule will be, put it on the actual calendar. Set alarms and notifications on your phone to remind you to stop one activity and start another. Block out time on your calendar for both work and personal priorities.
And be willing to adjust your schedule as necessary; your business will be more likely to succeed if you are getting enough rest and feeling a sense of work-life balance, not feeling overextended and exhausted.
5. Combine and Conquer with Crossover Activities
Consider your side hustles and find out where you can combine activities to save time.
For example, if you have a dog-walking business and a handyperson home repair business, perhaps you could set aside time to do social media marketing for both businesses, to do customer outreach calls for both businesses or to buy supplies for both businesses.
The more you can do at one time to benefit multiple side hustles, the more precious time you can save for other activities.
6. Prepare for Accounting and Taxes
As a small business owner, you will need to pay your own self-employment taxes. You will be solely responsible for your portion of both Social Security and Medicare taxes since you are small business owner rather than an employee. Be prepared to save money from your business earnings and set it aside as you go; the generally accepted estimate is to put aside 25–30 percent of income for taxes.
Consider keeping separate bank accounts for each side hustle, if it makes sense, so that profits, losses and taxes are clearly defined for each. Keep track of all income and expenses for each side hustle throughout the year so it is easier to keep track of your business expenses, report your business income and document your tax deductions at tax time.
7. Incorporate Your Side Hustle...or Not Yet?
There is no time limit on when you can incorporate your side hustles and make them “official” as a legal business entity. If you want, you can form an LLC or other business entity when you first start doing business. However, it can also be a good idea to wait to incorporate and start making some real money with your side hustles. Some side hustle entrepreneurs might want to test the market, see where the opportunities are and see how much revenue can be earned before officially incorporating.
On the other hand, if you wait to form an LLC or other business structure, you might miss out on valuable legal liability protections and tax benefits of being a business owner. You might want to make your side hustle “official” with an LLC right away, so you can get an Employer ID Number (EIN), set up a business bank account and enjoy other advantages of being a business owner.
If you’re not sure about the exact business model for your side hustles, but you know that you want to be an entrepreneur and you’re committed to being a business owner, you can also form an LLC or other business entity today, and then adapt your business structure later as your business grows.
For example, if you wanted to start out with two side hustles, one dedicated to home renovations and one dedicated to staging homes for sale, you could form an LLC called “Your Name Home Services, LLC.” This could cover the business activities of both side hustles. And later, if you decide to branch out into other business activities, you could file a DBA to change your business name or offer new lines of business while keeping your LLC structure.
Keeping Your Side Hustles from Failing
Why do side hustles fail? Side hustles can fail for several reasons, but most frequently, it comes down to lack of planning, poor time management or picking a side hustle that isn’t lucrative enough or that doesn’t have enough demand in the market.
Some side hustle entrepreneurs don’t pay enough attention to the costs of setting up a business; a survey cited by CNBC found that the average first-year cost of a side hustle was $16,000. Some gig economy platforms charge significant fees that can cut into your business income; make sure you are charging enough for your products or services to be able to stay profitable.
What can you do to avoid having your side hustle fail? Ask yourself some of the following questions to help avoid potential pitfalls in your way:
- Do you have a manageable workload?
- Are you focusing your time and attention on revenue-generating activities, or are you getting bogged down with administrative busywork?
- Are there enough hours in your day to complete all the tasks necessary to be successful?
- Do you have a backup plan if things don’t work out?
- Did you diversify your side hustles so you have a diversified income?
- Have you made room in your schedule for rest and personal time, or are you in danger of burnout?
- Did you research your side hustle to ensure there is a need and/or a market to sustain your business?
- Do you know how to price your products/services to make sure you have a comfortable profit margin and are paying yourself a good hourly wage?
- Do you know what others have done to be successful in similar side hustles?
Thinking about how you could fail can help you focus your efforts and attention in a way that might make you less likely to fail. Do your research, and stick to your business plan. Think about the various outcomes, good and bad, that could happen for your business. Be proactive and resolve issues as they come at you. Staying flexible, being curious and adapting to change are some of the best skills to have as an entrepreneur, no matter how many side hustles you have.
Are you ready to start a side hustle or multiple side hustles? Check out the Incfile Side Hustle Checklist for more advice and insights.