This post originally appeared on startupnation.com/start-your-business
Plenty of side hustles can earn you a bit of side income, but only some have the potential to reach six figures per year, especially if you’re working a full-time job, too. After growing my own side hustle to multiple six figures per year, I’m going to share how to brainstorm and launch your own successful side business that can eventually replace your full-time income.
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Keep the following tips in mind to start your own six-figure side hustle:
Take stock of your skills
In my experience, people don’t give themselves enough credit. Most of us have unique skills and experiences that we’ve acquired through our work, hobbies and interests. So, if you’re going to start a side hustle, it’s a good idea to draw on your strengths.
Ask yourself the following questions:
- What schooling or training do I have?
- What work experience do I have?
- What things do I do better than most people I know?
For example, maybe you went to school for art. This could set you up as a freelance graphic designer. Or you could create a course on graphic design, illustration, etc. Or maybe you’re suited for sharing your expertise through a podcast or informational YouTube channel, that you’d monetize with ads and sponsorships.
Think outside of the box to come up with some answers to the above questions.
Identify your passions
Next, you need to figure out what you’re passionate about. I know your primary goal is to make money, but it should also be to find something you’re genuinely interested in. Here’s why:
- If you’re passionate about your side hustle, then you’ll have more motivation. You won’t need to convince yourself to work on it, you’ll want to work on it.
- Your passion will shine through in whatever you do, whether that be writing a book or creating a YouTube channel. This will result in a better product for your customers.
- You’ll be less likely to quit. Your business is going to hit rough patches sometimes, and if you’re only in it for the money, it will be really tempting to give up. But if it’s something you’re passionate about, there’s a much better chance you’ll keep going.
Now that you have a list of your skills and passions, it’s time to come up with an actual idea for your side hustle.
One common suggestion is to find a problem and then create a solution for it. This works, but I think it puts people on a path toward trying to come up with new inventions, which isn’t always required.
Most entrepreneurs are not inventors, and they don’t need to be.
So, along with looking at potential problems you can solve for the topics you identified in the steps above, look at what’s currently being sold in those markets, too. Look at products on Amazon, conduct a Google search, review websites and blogs related to the topic and see what they’re promoting and how they’re doing it.
You may be able to slightly improve upon an idea or repurpose it for a slightly different target audience, which is much easier than creating something from scratch.
For example, I heard a story a few years ago about a young man who found a popular product on Amazon — wooden cooking skewers — but saw many customer reviews stating that the skewers were slightly too short. Their hands were getting hot during cooking. So, he found a manufacturer to make the same product but extended it from 12 inches to 16 inches. He ended up with a top-selling product on Amazon.
Choose a narrow niche
At this point, you probably have a few ideas, but your work isn’t done yet! If you really want to be successful, you need to get specific and find yourself a well-defined niche and focus on delivering just one product or service to start.
If you start too broad and try to appeal to everyone, you run the risk of appealing to no one. I experienced this firsthand when launching my own side hustle, a career advice website called Career Sidekick. When I launched it as a general career advice blog, I didn’t gain any traction. I was trying to tackle too many topics and gain the attention of too many different types of people. It wasn’t until I narrowed down from general career advice to only job search advice that I began gaining a following and eventually began selling my e-books.
In fact, for a few months, I wrote only about job interviews. While my potential audience was much smaller, I was a clearer choice for that audience. Plus, by focusing on that one narrow topic, I became an authority on the subject faster.
Whatever your idea is, try to find a specific niche within it to stand out and gain faster recognition and traction.
You can narrow down your idea in terms of what you offer, but also who you offer it to. For example, I chose to narrow down my focus from general career advice to job search advice. I could have narrowed it down to an even more specific audience, such as job search advice for tech workers, job search advice for recent graduates, etc.
Choose a business type
There are many types of side hustles to choose from, which can make things a little overwhelming at first. That’s why I’ve broken them down into two different business types that have a particularly high chance of earning you six figures:
The idea here is to create a product or set up a service that generates income without you having to constantly monitor or work at it.
A great example is creating a video course. Sure, you’d have to spend a lot of time developing it upfront. But once you’re done, you can post it and charge people an enrollment fee. From that point on your work is mostly done and you’re bringing in passive income.
By disconnecting your time from your income, the amount of money you make is no longer tied to how many hours you work. This makes it much easier to scale your business.
Some other examples of this kind of side hustle include:
- Selling a physical product
- Writing a book
- Monetizing web content through ads or affiliate marketing
- Creating and monetizing a podcast
- Software as a Service (SaaS)
Offer a high-ticket service
Your time is valuable, so if you’re going to trade your time for money, then you want to make sure it’s worth it. This is why I recommend B2B (Business-to-Business) services if you are going to sell your time.
Businesses typically have much larger budgets than individuals, so while $5,000 is going to be a lot for your typical consumer, for many businesses, it’s a small amount to pay for something that offers them value.
Plus, when you sell to someone representing a business, they aren’t spending their own money, so they’re less emotionally attached. Many business managers have budgets set and money that’s tagged for spending. You simply need to offer them a solution to one of their problems, or a way for them to earn more money.
Some examples of high-ticket services include:
- Digital marketing
- Software development
- Web design
- Lead generation
You can perform these tasks as a freelance consultant. Just make sure that you haven’t signed a noncompete agreement with past or current employers.
Validate your idea
Before you invest a lot of time and money into your side hustle, you should do some research to determine whether or not there’s a market for it. Use tools like Google Trends to see what people are searching for online and talk to potential customers to get their thoughts on your idea. Consider your findings and adjust if necessary.
You’ll also want to research other companies in the space to see what they’re currently offering. Seeing some competition for your idea is a good thing, as it proves there’s an appetite and willingness to spend money on what you plan to offer. But too much competition will make it difficult for you to succeed, so also consider the level of competition, and whether there are any gaps in the market or ways in which you can stand out.
Finally, consider whether the idea is profitable based on prices you’re seeing in the market. How much can you expect to earn with each sale, and how much time and other costs will be required to fulfill each order?
Launch your business
One of the biggest mistakes I see entrepreneurs make is that they continue to delay the launch of their product until it’s absolutely perfect.
Here’s the unfortunate truth: It will never be perfect. Instead of trying to solve every small problem, or create every feature you’ve envisioned, work toward developing a minimum viable product (MVP).
From there, let a select group of people try it out for free, or for a deep discount. This has two benefits:
- It will alert you to any problems with your product (there will be problems, but don’t panic), and
- You can ask people to provide reviews and testimonials that you can use in your marketing. It’s perfectly fine to offer a discounted product and tell people that in return, you’re hoping for an honest testimonial about what they truly thought.
Once you’ve addressed those initial issues, launch it! There will likely still be a few bugs to work out. That’s OK! As I always say, done is better than perfect.
Continue to collect customer feedback and refine your product. Once your offering is working the way it should be, you can start to look at ways to increase profitability, too. You can achieve this by reducing your average cost per sale or time spent per sale, and/or by experimenting with increased prices.
Building a six-figure side hustle doesn’t happen overnight. It takes time, patience and hard work. But if you follow this outline, and you’re willing to put in the required effort, then achieving six figures in side income is possible.
The post This Entrepreneur Shares How to Start a Six-Figure Side Hustle appeared first on StartupNation.