It’s not impossible to work full-time and run your own business on the side – it just takes dedication, self-discipline, and a clear vision. According to Intuit Canada 45% of the Canadian workforce will become self-employed by 2020. Whether you want to supplement your full-time income with a side business or work toward being fully self-employed, follow these tips to help make your dreams become reality.
Don’t Feel Pressure to Go All In
While you might think you have to give up your full-time position to chase after your dreams of self-employment, it doesn’t have to be that way. In fact, it’s often better to maintain your current position and take advantage of the guaranteed income while you steadily build your side hustle. There are plenty of ways to earn extra income, and some even tap into the job knowledge and experience you already have. Consider options such as:
- Blogging – Post affiliate links on your blog to generate a new income stream.
- Teaching/Consulting – Share your expertise with students, whether through online courses or at a local university.
- Social Lending – Sites like Lending Loop let you earn interest on funds you front to other small business owners and entrepreneurs.
- Sharing Economy – Draw in extra cash by driving for a ridesharing company or renting your home on a vacation rental site.
- Selling Your Hobby – Turn an interest such as baking and woodworking into a lucrative side business by peddling your wares.
Follow Your Passions
If you have an idea of your direction, you’ve already won half the side-hustle battle. Since a side business reduces the amount of free time you have, you should choose something you enjoy doing. If you can’t decide where your passions lie, consider these options to help you find them:
- Jot down ideas that make you happy and look for a common theme.
- Ask your friends and family members to list the things you truly excel at.
- Take courses online or enroll in night classes to learn about various subjects.
- Job shadow a friend to see what a day in their industry looks like.
- Volunteer within your community to explore potential career paths.
- Take a short trip to change your perspective and gain new experiences
Working for your current boss, you’re probably innovative and solving problems all the time – but you’re doing so to benefit the company, not yourself. It’s part of the job, and you might not feel genuine excitement over it. When you have a side business that you love, you reap these benefits:
- You relate more easily to the work and you’re closer to the subject, which results in better ideas.
- You’re more willing to put in extra hours because you enjoy the work you’re doing.
- You have a greater desire to produce high-quality work rather than doing “just enough.”
- You’re not willing to accept failure as an option
- You feel more fulfilled by your successes, even the small ones
Prepare a Business Plan
Even if you don’t actually write out a formal plan, planning is still an essential aspect of any side business. Freelancers don’t necessarily require a written business plan, but it’s best to have one if you’re building a startup. For example, if you plan to create a highly effective acne wash, you need to have research to prove why yours is the best – research that you can back up. This research requires funding.
A proper business plan should include:
- A description of your company
- An explanation of organization and management (Sole proprietorship or LLC? Will you have a board? Do you eventually want to incorporate?)
- A description of the market you’re targeting and the niche you expect to fill
- A planned marketing strategy that shows potential customers that you are indeed filling a niche
- A funding request (if needed)
- Projections of future revenue should your plan explode — in a good way
Set Concise, Clear-cut Goals
As your own boss, you can afford a little flexibility. However, being too flexible can lead to nothing getting accomplished. Setting goals can help you stay on target. The best type of goal-setting is smart – not just smart, but S.M.A.R.T:
Be specific as to what you want to accomplish. Ensure you can measure your goals to see if you’re making progress. Set goals you can accomplish, and if you’re falling behind, take another glance at your goals and the highlighted steps to ensure they’re reachable. Make sure each goal has a realistic timeline and that you set clear deadlines. Finally, adhere to your deadlines. You’re the boss, so you have no one to answer to but you, making self-discipline vital.
Find Mentors or Coaches
If you’re feeling overwhelmed or you have basic questions, don’t be afraid to ask for help. Look for business mentors who you know are successful in their fields. Ask the most accomplished people in your life to point you in the right direction, and ask for introductions to other industrious people in their network.
If your network of successful individuals falls short, consider hiring a business coach to work alongside you in an intimate capacity. Business coaches are adept at asking tough questions to help you find clarity and focus. They guide you toward outcomes while helping you discover solutions on your own. A good business coach acts as a personal sounding board, so you can brainstorm and bounce ideas off someone with experience.
Find the Time
You may feel like there aren’t enough hours in the day to pursue your own business while working a full-time job. The day isn’t getting any longer, so you have to invent time to pursue your side job. Wake up an hour earlier in the morning or go to bed an hour later at night. Use this extra time to write your business plan, map out your goals, search for a business coach, or build your inventory.
It’s also vital that you set aside specific times for your work. After all, just because you’re operating out of your home doesn’t mean you don’t have other responsibilities, whether they are your family or personal errands. By setting a specific — and strict — schedule for your self-employment, you can manage your time more efficiently without experiencing burnout.
Manage Your Expectations
Obviously the greatest aspect of working for yourself is the flexibility of work hours and time for family, friends, and hobbies. But one of the greatest sacrifices involved with running your own side business is that you lose out on a lot of the benefits attached to a standard full-time position. Benefits you might miss as a self-employed person include:
- Medical insurance
- Company-matched payments into your Registered Retirement Savings Plan (RRSP)
- Paid time off
- Holiday and overtime pay
Also, if you don’t spend time working on your business, you don’t earning any income. It’s not unheard of for small business owners to put in 50 or more hours per week. As a one-person show, you have a lot to handle. Consider these solutions:
- Determine whether you’re eligible for health insurance under your spouse’s plan if they’re employed.
- Explore health insurance options through an insurance broker.
- Start a savings account to help mitigate the expense of unexpected costs when filing taxes.
- Remember that you may be able to deduct premiums from your business income.
Prepare for Tax Time
Taxes are the most important aspect of running a side business that you might have overlooked. Taxes on income you receive as a result of doing business must be paid — by you. Your accounting practices should include keeping a detailed ledger of all your transactions. Keep physical receipts or take digital photos of your receipts, and store them on a secure server. Most importantly, keep detailed and accurate records so you understand what you owe when it comes time to pay taxes.
If your side hustle is just you (no employees), be aware of the following taxes:
- Federal personal income tax
- Provincial personal income tax
- Federal business income tax
- Provincial business income tax
- Self-employment tax
- CPP or QPP payments
- Employment Insurance (optional)
- Goods and Services/Harmonized Sales Tax (GST/HST)
Using your income entries, receipts, and other items, you can calculate your tax deductions. The difference between the total of these deductions and your tax bill is the net tax that you owe.
The Bottom Line
You don’t have to go all in and leave behind your nine-to-five paycheque immediately after deciding to become self-employed. Working a side hustle or owning your own side business while working a full-time job means that overall, you’re boosting your bottom line — immensely in some cases. QuickBooks Self-Employed app helps freelancers, contractors, and sole proprietors track and manage business on the go. Download the app.