Make Money Side Hustles

How to Start a Side Hustle and Make Extra Money in [2024]

A side hustle can help you make extra money to meet your financial goals. Here’s how to get started and 10 side hustle ideas to consider.

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Updated Nov. 13, 2024
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If your paycheck never feels like enough to cover the bills or make progress toward your financial goals, a side hustle can help. Having an extra source of income in addition to your day job can help create financial stability and give you a buffer of cash to start saving for your goals.

There are a wide variety of options to choose from, some of which you can do in your spare time with little investment, while others can be turned into full-fledged businesses.

In this guide, we'll cover everything you need to know about how to start a side hustle, from choosing a side hustle idea to managing your business structure and finances.

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How to start a side hustle

Starting a side hustle is an exciting journey that could bring in extra income and the flexibility to explore your creativity. Before starting your side hustle, it’s important to research the necessary steps and requirements. Here’s a step-by-step guide to help you get started:

Step 1: Choose a side hustle

There is no shortage of side hustles to choose from, and the best option for you depends on your financial goals, your long-term vision for your side hustle, the amount of time you have to dedicate, and more. Here are a few things to consider:

  • Your strengths and interests: Taking note of your strengths and interests is one of the best ways to identify potential side hustle ideas. You’ll likely enjoy your side hustle more if it’s something you’re genuinely interested in, and you may even be able to turn it into a full-fledged business. For example, if you enjoy fitness, maybe you consider a side hustle as a personal trainer or fitness instructor.
  • Financial investment: Consider how much money is required upfront to start the business and how much you’re willing to invest. Costs can range from next to nothing to thousands of dollars, depending on your chosen side hustle. For example, you can get started as a food delivery driver with nothing but your car, but starting a YouTube channel could require expensive video equipment.
  • Time investment: Ask yourself how much time you really have to invest in your new side hustle. If you only have a little time, you may want something that’s easy to get started with. Meanwhile, if you have lots of time, you may feel comfortable investing your time for long-term success. For example, rideshare or food delivery can be done in less time than, say, setting up your own online store.
  • Risk profile: Different side hustles have different levels of risk, as well as different potential rewards. Some side hustles, such as food delivery, allow you to start earning money from the first day. Meanwhile, becoming an influencer or marketing online services could result in a lot of legwork upfront before you earn your first dollar. However, they may come with a greater potential reward.

One question to ask yourself is what's something you enjoy doing, even if you aren’t making money from it. I’ve always wanted to be a writer but ended up following another career choice originally. Considering I already used some of my free time to write, it was a natural choice as a side hustle.

Step 2: Research the market

Before starting your side hustle, it may be worth researching the market and the competition. Of course, for gig economy jobs like food delivery, rideshare, pet sitting, and others, there may be little to research — you set up a profile on the app and can start accepting customers right away. On the other hand, for a freelance business or online shop, understanding the market may be vital to landing clients.

For example, when I started freelance writing as a side hustle when I first had a full-time job, it was helpful to learn about the freelance market and how other freelancers marketed themselves, as well as find freelance communities to learn from others in the industry.

Step 3: Choose a business structure

Your business structure has implications for how the business is taxed, how ownership is established, and how legal disputes are handled. Because you are automatically a sole proprietor if you are the only owner and you are performing business activities, most side hustles are sole proprietorships.

  • Sole proprietorship: A sole proprietorship is a business structure that is owned and operated by one individual. It provides a simple way to start a business that typically doesn’t require formal registration or paperwork filing requirements. It also has simpler tax obligations. However, it also comes with minimal protection since your personal and business assets aren’t legally separated. You could be held personally responsible if your business is sued or goes into debt.
  • Partnership: A partnership is an arrangement where two or more people come together to conduct business as co-owners. Partnerships can be either formal or informal, with different arrangements that determine how each partner’s responsibilities are divided and how profits are shared. Partnerships generally have lower startup costs than other business structures but do require formal filing and documentation.
  • Limited liability company (LLC): An LLC is a business entity that offers limited liability protection to its owners and can be structured as a partnership. You get flexibility, tax benefits, and legal protection to guard your personal assets. An LLC is probably your best bet when getting started with your side hustle.
  • Corporation: With a corporation, you have to assign shareholders and it’s one of the most complicated structures because it must comply with government regulations. This type of business also involves double taxation and additional paperwork, as the corporation must file a corporate tax return each year. This business structure offers the most protection, but is not likely to be a good fit when just getting started with your side hustle. You can always restructure later as you grow.

Which is typically the best business structure when starting?

Most side hustles naturally start as sole proprietorships because they are the only structures that don’t require any steps to form. And you may decide to stick with a sole proprietorship for the long haul, especially if your hustle is temporary or you’re doing gig work.

However, if you’re starting a business, you may prefer the protection that comes with an LLC. You get the same tax benefits, but since your personal and business finances are legally separated, you don’t have to worry about losing your assets if your business is sued.

And remember, it's also okay to switch from one to the other at some point. I operated as a sole proprietor for several years. But when I felt my business finances were getting too complex to handle on my own, I hired a CPA who suggested I become an LLC.

Tip
It's important to understand how each business structure works before deciding which one suits your side hustle best. You should also consult a qualified accountant or lawyer to ensure all legal matters related to your venture are properly addressed.

Step 4: Get licensed and insured

Depending on your side hustle, you may need to obtain licenses and insurance to operate legally in your state. These documents could also protect your side hustle from potential legal liabilities.

The required business paperwork may differ depending on the state you operate in, but common requirements include:

Additionally, you may need to purchase liability insurance for your business so that if someone gets hurt in the course of your business operations, costs and legal fees are covered. If your side hustle involves a brick-and-mortar business location, you will also want to get that insured in case of natural disasters, fires, and other unforeseen events.

Insurance will help reduce financial losses if anything goes wrong while you’re side hustling. Consult a local insurance agent to learn what kinds of insurance are available for your business.

If your side hustle involves contracting for another company, such as Airbnb or DoorDash, you are probably already covered by the company’s insurance.

Step 5: Create a business plan

Once you have decided on a business idea, the next step is planning how you will launch, how you plan or hope to make money, and manage your side hustle. An essential part of this step is conducting thorough research. The more detailed your business plan, the better prepared you'll be when starting your side hustle.

To help you get started, consider the following common components of a business plan. Because every business is different, your plan should be tailored to your specific situation. For some side hustles, you don’t have to write a formal business plan, but you should still consider the following:

  • Goals and objectives: Define how you want to achieve your goals, how long it will take, and how much money you need to make.
  • Budget: Outline how much money you need to invest in starting the business and how long it will take before you start seeing returns.
  • Business structure: Understand how each type of business structure works and how you can best use them to your advantage.
  • Marketing strategies: Decide how you'll reach your target customers and stay visible in the market.
  • Legal requirements: Determine what licenses, permits, and documentation are required for your side hustle.

Every business is unique, so your business plan can be as simple or complicated as you want, depending on what you think is helpful. If you’re someone who finds it helpful to get things down on paper, then a lengthy business plan may be your preference. But if you’re more of an action-taker, you might prefer to dive in and let the business plan naturally come later.

Step 6: Set up your business finances

It’s important to set up your business finances in a way that protects you and simplifies your financial management. If you’re earning money from a side hustle, it’s usually best practice to set up a separate business bank account, even if it’s gig work like food delivery or pet sitting.

The reason a separate bank account is important is that you’ll have to report that income on your tax return and pay income taxes on it. At the same time, you’ll be able to deduct your business expenses. Having those transactions in an entirely separate account will make it easier to manage your business finances and report that income on your taxes.

Whether you’re filing your taxes yourself or hiring the job out to an accountant, I promise you’ll thank yourself for having separate records for your business transactions!

Step 7: Create a work schedule

Starting a business, no matter how small, requires time and dedication. Depending on your availability and the commitment required for your chosen business, this can range from a very part-time schedule of a few hours per week to managing it full time.

Once you have determined your schedule, make sure those times are marked into your calendar so they become part of your routine. Treat it just like a normal job where you’re expected to be there during certain hours. After all, if you don’t show up to hustle, you won’t make any money on the side.

Step 8: Market your business

Depending on the type of side hustle you choose, it may not be enough to just set up your business. You may also need to market yourself to find customers. For example, if you start a side hustle as a freelancer or an online shop owner, you’ll have to market your business so potential customers can find and get to know you.

The best way to market your business will depend on the business type and your personal preferences. You may consider social media, online ads, SEO, personal outreach, and more.

Your marketing strategies may also evolve over time. When I first started writing, I spent a lot of time cold-emailing editors and scouring. Fast-forward several years, and finding new clients looks a lot different since I already have a network in place. It’s okay for your marketing strategy to adapt over time, too.

Step 9: Invest in business growth

Every side hustle is different. Some people use their side hustles as short-term endeavors they take on to help them reach a specific financial goal. However, other people start side hustles in the hope of turning them into businesses and their sole source of income.

If the latter is the case for you, consider ways you can invest in yourself and your business to help it grow. Investment ideas may include paid advertising, online courses, or contractors to help you in your business.

Your investments can also include tools that make your job easier. If there’s a tool that can save you time in your business, it can free up time to focus on other growth opportunities.

Tax implications of a side hustle

If you decide to start a side hustle, it’s important to understand the tax implications. The IRS requires workers to pay taxes on their income, and side hustle income is no exception. The difference is you don’t have an employer taking those taxes out of your paycheck — you’ll have to pay them yourself.

First, you’ll have to report your side hustle income on your annual tax return. Luckily, you can also report your business expenses and deduct them from your taxable income.

Additionally, you may need to make estimated tax payments throughout the year. Consider how your employer withdraws your income taxes each month — this is the same concept. It ensures the IRS gets paid throughout the year and helps you avoid tax penalties at the end of the year.

Tip
If you’re making estimated tax payments throughout the year, don’t forget about state taxes! In my first year making estimated tax payments, I only made federal tax payments. When the end of the year rolled around, I owed a large tax bill to my state’s Department of Revenue. Luckily, they were kind enough to waive penalties for a new business, but there’s no guarantee you’ll have the same luck.

The amount you’ll owe in taxes and the process for filing them will depend on your business tax structure. Filing taxes as a sole proprietor or LLC isn’t all that different from filing your normal tax return. However, if you’re a partnership or corporation, or if you’re an LLC that elects to file as an S corporation, the process may be a bit more complex.

Don’t be afraid to hire professional help. It’s much better to spend a little money to ensure you’re following all the tax laws than to spend a lot of money down the road if it turns out you mistakenly did something wrong.

Beginner-friendly side hustle ideas

There are plenty of side hustles you can start today, even if you’ve never side-hustled before. Check out these options and see what fits at the intersection of your skills, interests, and time available.

  • Freelancing: If you have a specific skill set, consider freelancing for other businesses on a contract basis. There are freelance opportunities for writers, editors, graphic designers, bookkeepers, and more. You can make money on an hourly or per-project basis. There are freelance platforms that can quickly connect you with potential clients.

Tip
Fiverr and Upwork are two of many platforms that connect freelance writers, graphic designers, and more with clients.

  • Tutoring: Do you have a skill that you can teach others? Tutoring is a great way to use your knowledge while also making extra money. It can be done either in person or line, depending on your subject matter expertise and preferences.
  • Virtual assistant: Business owners often seek extra help managing their day-to-day tasks, and a virtual assistant can be the perfect way to make money online. You can provide customer support, data entry, or social media management. Typically, this role is done virtually, which means you can work from anywhere.
  • Social media management: Businesses recognize the importance of having an online presence, so they're hiring social media managers to help them manage their accounts. If you have experience with various social media platforms, this could be a great side hustle opportunity.
  • Gig work: A gig worker is someone who provides contract work on an on-demand basis, often using an app. Common examples of gig work include pet sitting or dog walking on apps like Wag or Rover, rideshare driving through Uber or Lyft, and food delivery through apps like Instacart, Doordash, or Uber Eats.
  • Content creation: Many people today make money creating content as an influencer on platforms like YouTube, Instagram, TikTok, and more. However, it can take a long time to start making money, depending on your niche and how quickly you can grow your audience.
  • Airbnb host: Do you have an extra room or two in your house? You can make some extra money by renting them out on Airbnb. Guests might be staying for a few days, a week, or even longer, which is great if you're looking to make consistent income from a side hustle. Some people even buy a second property to rent out on Airbnb for passive income.
  • E-commerce: If you have a product idea that people are interested in buying, consider starting your online store. You can use platforms such as Shopify or Etsy to reach customers worldwide. If you’re tech-savvy, you can also create your own e-commerce website. Online stores can be used to sell just about any physical product.
  • Selling items on eBay: Alternatively, if you have items around your house that you don't need, consider selling them on eBay. You can make extra money by selling old clothing, household items, and other goods. You can even find antiques and items such as old game consoles at garage sales and estate sales and flip them for a profit on eBay.
  • Online surveys and focus groups: Another easy side hustle is completing paid online surveys or joining focus groups. Companies will give you cash in return for your opinion, as long as you fit their target demographic. You won't get rich overnight, but it's a good way to earn extra money. The key is to look for legitimate websites for paid surveys. Some survey sites to consider include InboxDollars and Survey Junkie.

FAQs

How do you start a side hustle with no money?

There are plenty of good side hustles that cost absolutely nothing to start. You could start by offering services such as writing, proofreading, tutoring, babysitting, or pet-sitting. Another option is to become a blogger or start a podcast or YouTube channel and monetize it with ads or affiliate marketing. You could start creating or recording these on your phone. Finally, you could start working as a gig worker, but you may need a car to get started.

How do I find a side hustle?

To find the perfect side hustle start by determining how much time and money you want to invest in your side hustle, then assess your skills and interests. Once you know what type of side hustle you want, it will be easier to start finding work.

You can check out job boards, apps, and websites dedicated to finding side hustles. Networking is another great way to find opportunities, so don't be afraid to ask around if anyone knows of any freelancing gigs available. LinkedIn could be a good place to connect with potential clients.

What side hustle should I start?

The best side hustle depends on your skills, interests, and the amount of time and money you're willing to invest. Take some time to research various options and think about what would be the most rewarding for you. Determine whether it’s more important for you to enjoy the work you do or earn a lot of money while doing it. Answering these questions will help you pick the best side hustle for you.

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Bottom line

A side hustle can provide a bit of extra cash when you need it, and can even help you start a business with long-term potential. Luckily, there are so many different types of side hustles that you can start one no matter how much time or money you have to invest or how much money you hope to make.

When you’re starting a side hustle, it can help to start small. Break it down into simple steps and do your research ahead of time to ensure you’re prepared. And once you decide on a venture, commit to the plan and be prepared to put in the work necessary to make it successful.

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