How to Start a Side Business

Starting a side business is a great way to dip your toe into the waters of entrepreneurship. You can create and manage a side business alongside your normal job, so you’re reducing your risk and have a fallback position if the side business doesn’t work out. Of course, if the side business does work out and starts to grow, you can make an informed decision as to whether you want to focus on it full-time.

Until then, you’ll be able to work on your side business part-time at your own pace. You’ll still learn a great deal about starting and running a business, which will be incredibly valuable when you take your side business to the next level (or start up another new business).

how to start a side business

If you don’t know how to start a side business, we’re here to help. We’ve supported over 250,000 people to form their business and provided answers to transform them into entrepreneurs. We’ll guide you through what you need to know to create your side business and get it off the ground.

From validating your business and doing the research to filing your paperwork and running your business, this guide will help you out.

Read on for some insight into creating your own side business and becoming an entrepreneur.

Why You Should Start a New Side Business

If you’re wondering how viable it is to start a side business in addition to your regular job, here are some statistics to inspire you.

side business

Around 6 in 10 people who run a side
business have a full-time job already

  • Around a quarter of Americans have some sort of side business (almost 60 million people)
  • The main reason for starting a side business is to boost finances, with two-thirds of side business owners saying that was their main motivation
  • Just over half of side business owners said they could see their side business become a full-time career
  • Around six in 10 people who run a side business have a full-time job already Half of side business owners devote 10 or more hours a week to their side business
  • A quarter of side business entrepreneurs are using the business to make a lifestyle change or pursue their passion

If you want to find out whether a side business is right for you, the time to start is now. We're here to help you figure out how to do that.

What Type of Side Business Should You Start?

Ideally, you want a side business to be relatively hassle-free. If you’re running a side business on top of another job, the less time you spend on setting up the business (and the more time you spend earning money) the better. Here are some good opportunities to achieve this:


Start Blogging and Writing

If you can find a subject you’re knowledgeable about and can create exciting, engaging content, you might be able to make it as a blog writer. You can write when you have the time and monetize your blog through advertising, affiliate marketing or selling products you’ve created yourself.


Provide Freelance Services Through a Marketplace

Becoming a completely independent freelancer can be tough, as there’s a lot of competition. One great way to build up experience and see if its right for you is to provide creative services through a freelance marketplace. Services like Upwork, Fiverr and People Per Hour will allow you to list your services and attract potential clients.


Sell Products Via a Marketplace

If you’d rather sell products than services, a third-party marketplace like Amazon, eBay or Etsy could be ideal. You’ll need to find the right niche, understand profit margins and ship products, but this can be a great way to get started with ecommerce and online retail.


Offer Driving Services Through Lyft or Uber

Uber and Lyft provide a good way to earn some side income, and their reach and influence is increasing. Although the money you’ll get won’t be a huge income, driving for one of these services is a useful way to learn about self-employment.


Rent Property

Whether you rent a spare room via Airbnb or have apartments that you lease to renters, property management can be a lucrative side business. There can be a lot of work involved in managing a rental property, and it can be capital intensive, so it's not for everyone.


Offer Tutoring and Coaching

If you’ve got some skill at helping others, tutoring and coaching are in demand. You’ll need to demonstrate experience and expertise in your topic, but it’s a low-cost business to start.

If you want to start a successful home-based business, it's important to know what your options are. Here are some of the more popular business ideas.

Validating Your Side Business Idea

Remember, the ideas above are just a starting point, You can define and tweak exactly what type of side business you want to run through conducting your own research.

You will need the right skills to run a successful side business, and you’ll need to work those out before launching your new venture. For example, you need good creative skills to become a freelancer, and you’ll need to do plenty of marketplace research to find products you can sell successfully.

Another important area to think about is how much time, effort and energy you have to put into your side business. You need to commit to any venture in order to make it successful. And every side business will have dozens or hundreds of competitors, sometimes from full-time entrepreneurs.

Getting started in a side business is easy, but becoming a success is harder. Before committing too much time, energy and money into your new side business, it’s important to test the marketplace. These points will be more valid to some side businesses than others — for example, if you’re driving for Uber, you probably don’t need to worry too much about understanding your market and talking to clients. On the other hand, competitor research will be very important to selling products on Amazon.

  • Identify your side business’ unique selling points (USPs): Whether you’re competing on features, price, quality, speed or something else, your USPs set you apart from competitors and encourage customers to come to you.
  • Look at who your competitors are in the space: Having competitors is a good thing as it shows there’s a market, but if there are too many, you’re likely to struggle without a really good unique selling point.
  • Understand your market: Clearly identify exactly who your customers are likely to be, where they hang out and how you’re going to reach them. This will be essential to your marketing, communications, sales and customer support.
  • Talk to clients: Speak with potential customers to understand what they want from your products and services, and validate this by asking if they would commit to spending real money on them.
  • Get involved with business communities and discussion groups: One of the great things about side businesses is that there are plenty of great communities and discussion groups. Get involved with them and learn the ins and outs of your chosen market before committing.
What Are the Main Challenges for an Amazon Seller Entrepreneur?

Your Side Business Needs a Business Plan

It’s easy to think you won’t need a business plan for a side business, but they can give you a surprising number of benefits (especially if you want to expand your business). A business plan will help you define your side business, market yourself, get sales, make a profit and grow.

Business plans do vary slightly, but they should all cover the following areas:

What Are the Main Challenges for an Amazon Seller Entrepreneur?
  • 1 An executive summary with the most important points from your business plan
  • 2 Your goals and what you hope to achieve with your side business
  • 3 A description of your side business, background information and contex
  • 4 A market analysis and likely demand
  • 5 An overview of how your side business is structured
  • 6 Your online business model
  • 7 How you will market and sell your offerings
  • 8 Financial projections, revenue and profitability
  • 9 Appendices

Choose the Right Business Structure and Register Your Side Business

There are five main business structures you can have in the U.S., and it’s important to choose the right one. We’ve shared your options below. They are:

Choose the Right Business Structure and Register Your Amazon Business

Sole Proprietorship

This is the "default" business structure and is what your side business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.

Limited Liability


This is a type of business that is formed when two or more people work together without creating a more formal business entity. Like a sole proprietorship, it may not give you all the protections your side business may need.

Series LLC

Limited Liability Company or LLC

The most common type of business entity, an LLC is fast, simple and inexpensive to set up and maintain. It protects your personal finances and assets and is a great way to start your side business.

S Corporation

S Corporation

This is a more complex type of
business and isn't generally
recommended for smaller

C Corporation

C Corporation

These are the largest and most
complex types of businesses
and are far more than the
average entrepreneur or
business owner will need.

Our in-depth guide covers more of the advantages and disadvantages of different types of business entities, and you’ve still got questions, you can read our answers to frequently asked questions on choosing the right business structure..

In most cases, our recommendation for a side business would be to create an LLC. See our complete guide to creating an LLC to learn everything you need to do, or and have Incfile register your business for you. No matter what state you’re in, we’ve got you covered.

Start your business with us, today!

Setting Up Your Side Business and Business Operations

Once you've legally created your side business, you’ll need to get some other things in place.

side business

Location of your business

The location of your side business will depend on the type of business you run. In almost all cases, you’ll run your side business mainly from home, even if your main place of work is your car or property that you’re renting out. Remember that if you’re selling products, you will need space to store your stock.


Just like the location of your business, the equipment you need will depend on the type of side business you’re running. In most cases a laptop and smartphone will be sufficient, although other types of side businesses may need more specialized equipment.

side business
side business


If you’re in an online marketplace, you probably won’t need to do much marketing. It’s important to represent yourself in the best possible way and gather good reviews. For people with another type of side business, your marketing needs will vary depending on the specifics of what you’re selling.

Software and Processes

The right software can make running your side business quicker and more efficient. See our great list of the top apps at the end of this guide.

side business
side business

Finances and taxes

In most cases, you will want to keep your personal and business finances separate. We recommend a separate business bank account for your side business. You might also want to consider a business credit card. Additionally, you will also need to keep careful bookkeeping records and file business and personal taxes. Here at Incfile we can help you file your taxes.

Our Start a Business Checklist will get your laundromat business going in the best possible way.


If you’re after a straightforward, easy-to-understand, in-demand business and have the money to invest in machinery, owning a laundromat could be a great opportunity. There’s not a lot of administrative overhead, and with the right location you will have a resilient income stream for years to come. Do your research and find the right space; you can develop a thriving laundromat business to serve the needs of your local community and provide you with a good living.

Start your business with us today.