Are you dreaming of turning your hobby into something you can use to make a few dollars on the side? Do you dream of one day quitting your job and opening your own business? Whether you are looking to earn a few dollars on the side or want to create a full-time career, the idea of starting a side business can be really alluring. But, before you start designing your logo and business letterhead, make sure you have thought through the venture fully.
7 Considerations Before Starting a Side Business
Do Your Market Research
Before starting your small business, make sure there is a market for your idea. Are you looking to provide a product or a service in an area where the field is already saturated? Make sure there is a market need and know where you will fit into the market space. Talk to the people who would (eventually) become your paying customers and get their take on your idea. Do some basic internet searches to see if there is a need in your area for your concept.
Create a Value Proposition
Think about how you will differentiate yourself in the market. What value will you bring that your competitors aren’t providing? Know what makes your idea different and unique and build a plan around that. How can you promote what makes your idea different? This is known as your value proposition, or what value you add to the marketplace.
Make Your Small Business Idea Scalable
Do you love baking cupcakes? Opening a bakery might seem like an ideal end-goal, but could you start with a smaller goal of creating a mobile cupcake delivery service, or catering to parties and events? You will be able to try out your idea on a much smaller scale to begin with and build your name from there. You may decide you are happy with weekend gigs (and that’s OK!), or your weekend hobby-turned-business may make you yearn for more. Broadening out your small business may hurt your side hustle down the road and prove to be a costly mistake. Listen to your intuition and learn everything you can while your business is small.
Consider Your Marketing Plan
You may have the greatest idea in the world, or the best cupcakes in town, but you won’t get a lot of business if you don’t get the word out. Marketing doesn’t have to be expensive for it to be effective, but it does take some extensive knowledge. Think about how you want to promote your business and develop a plan. Consider using social media as an inexpensive approach to connect with your community.
Starting a small business can be costly – you have technology needs, up-front costs, and other expenses at the very beginning. Plan for these expenses: maybe you have been budgeting for this and have money set aside, or you are being backed financially by others. Tracking your expenses may also help you from hidden costs arising that will take you by surprise. Either way, make sure you set up separate accounts and keep track of all business-related expenses from the beginning. Things can get really complicated when you comingle business and personal funds.
Keep it Separate from Your Full-Time Job
When you are working on launching a side business while still employed full time, make sure you keep your interests separate. This may mean not using your company resources to work on your personal business. (Yes, even logging into your small business account from your company laptop could be a conflict of interest.) You want to ensure that your company time and resources are used for the job you are being paid to do. Check your company policy for conflict of interest clauses to be sure you aren’t violating any policies of your workplace.
Buy Business Insurance
When your business starts providing products or services, it’s time to consider business insurance. You need to be covered if something goes wrong, no matter how small your business is in the beginning. Farm Bureau offers policies designed for home-based businesses which help you keep everything you have worked for covered.
Whether you are starting a side business for extra cash, or a full-fledged small business, be sure to think through the time commitment and what you hope to accomplish. Talk to your local Farm Bureau agent about how they can help. They have insurance and budgeting tools that might help you make your dream a reality.