Incorporating Your Side Hustle

Do you have a side hustle? If so, you’re not the only one—about 40% of people in the U.S. run a side hustle or small business in addition to their 9-to-5, according to a 2022 Zapier report. Or maybe you’re thinking of starting one, just like 31% of people (according to the same report). Side hustles can be a great way to pursue your passions outside of work while providing financial security and diverse streams of revenue. Sometimes, a side hustle can even present new opportunities for a career change, giving you the chance to earn a living doing what you love. Whether you’re looking to make extra income, start your own small business, or make a complete career transition, we’re here to guide you through the process.

Starting a Side Hustle With a Full-Time Job

Ready to dive into your new side project? Consider this your checklist: once you’ve got all of these steps completed, you’ll be all set to start.

• Check with your employer. This LinkedIn post by Mariah Flores recommends checking your full-time job policy on side businesses. Some companies have rules against working a side job in the employment contract, while others only request that you disclose your work. Most employers will want to ensure there’s no conflict between your day job and your small business on the side. Before getting started, ask your manager or an HR representative about your company’s policy on working extra jobs. Don’t try to keep it from your company, as this will only cause added stress!

• Figure out your schedule. Decide how much time you’ll allocate to your side hustle outside of work hours. You don’t need to spend a ton of time on your side hustle—half of the people with them spend 10 hours or less per week, according to the Zapier report previously shared. Just remember to factor in sleep and personal time, too.
  
  
• Give yourself room to grow. It’s easy to read the stories of overnight success and wonder what’s taking so long, but those stories don’t capture the full picture. A lot of work went on behind the scenes, and that work took a lot of time. You’re doing the work and putting in the time right now, so remember to have patience with yourself and your business.

Turning Your Side Hustle Into a Small Business

If you’re seeing success with your side gig, you may consider turning it into a small business. Starting a small business can help generate more revenue, which can also give you some flexibility with your day job. You may be able to work fewer hours with the additional income. If you’re considering transitioning from a side hustle to a small business, here are some things to consider.

• Will you hire employees? It might be time to ask for a helping hand! If that’s the case, you’ll need to figure out issues such as payroll and hiring practices. 
  
  
• Do you need a new space? Lots of side hustles start at home, but as your business grows, you may need to rent an office building or studio.
  
  
• How will you generate buzz? Websites and social media accounts can be a great way to get your name out there. Offline, you can also consider marketing strategies such as customer loyalty rewards or discounts for customer referrals. 
  
  
• Will you get a business bank account? A business bank account is different from a personal bank account. We’d recommend a business bank account so you can keep your personal and business capital separate. To get a business bank account, you’ll need to register your small business in Florida. This will require a federal employee identification number, or FEIN, from the IRS. You can apply for one online with your business structure.

Bonus: What’s your business structure? 

There are multiple types of structures for small businesses, including sole proprietorship, partnerships, and limited liability company (LLC). Each of these structures will have different tax requirements, license and regulation requirements, and rules specific to the state. Sole proprietorship is when your personal and business assets aren’t separate, which means you’re responsible personally for your business debts and expenses. In comparison, an LLC keeps your personal assets, like your car and house, separate from your business expenses. If something happens to your business, such as issues with debt or bankruptcy, registering as an LLC can prevent your personal finances from being affected. Partnerships are for when two or more people run a business together, and it affects the amount of liability each partner has in the business.

Making a Career Change

So your side hustle has become a bustling small business—congratulations! You put in the work, you’ve diversified your income, and you’ve got extra cash in your account. Take a moment to celebrate.

Maybe you’re happy keeping your side hustle on the side, and that’s great. Or, maybe now you’re considering making the switch from side hustle to full-time career. If that’s the case, here are a couple of things to keep in mind.

• Let your employer know early. Since your employer should already know about your side hustle, we recommend letting them know about your transition into your new career sooner rather than later. This will give your employer ample time to find a replacement for your role. They may even offer you more flexibility as you get your business off the ground.

• Draft a business plan. This step is especially important if you need a small business loan. Business plans will require research about your market, your competitors, and your business’ plans for growth and longevity. This article on Indeed offers good insights on how to write an effective business plan.
  
  
• Determine how much money you’ll need to start. This could include lease payments on rental spaces, payroll for employees, and any equipment you’ll need to buy to run the business. Since every startup is different, each business will have its own unique needs for capital. Just ensure that you’re thorough about calculating costs.
  
  
• Consider a credit card. One option to help with startup costs is to get a business credit card. You can choose cards with a low annual percentage rate, or APR, to limit the amount you’ll need to pay in interest. Or, you can look for a card with cash back rewards so you’ll have more money to invest in your business. If you’d benefit from a business credit card, we can help you choose which one is right for you.
  
  
• Separate personal and professional. You may have already started this if you’ve registered your business as an LLC, LLP, or any other structure that separates personal and professional assets, but now that you’re launching a new career as a small business owner, keeping your business and personal assets separate is essential. You’ll want to start a business account to track the amount of money your business makes and spends. 

Learn more about Crews Bank business banking.