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How to Start a Side Business While Working a Day Job in 2021

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This post is part of a series called How to Quickly Start a Side Business (Ultimate Guide).
Is Your Side Business Idea Worth It? How to Figure It Out
How to Launch Your Side Business in Record Time

If you're already employed and yet you still want to start a business on the side, you're not alone. In the US, for example, half of working adults report that they either own a business or are looking to start one

Businesswoman thinking of starting a side hustleBusinesswoman thinking of starting a side hustleBusinesswoman thinking of starting a side hustle
Thinking of starting a side hustle? This article will show you how. Image source: Envato Elements

There are many good reasons why even the most stable employee would want to learn how to start a side business, and even if they have no plans to quit their day job.

In your own business, you get to call the shots as well as actively decide on which tasks you should prioritize. This freedom means you can work on projects you love and be in an industry or field you are passionate about. Also, if you manage your side business well, it can bring in some extra income. In some cases, side businesses can bring in income even while you're working on your day job. 

While these benefits sound attractive, starting a project on the side, especially if you have full-time work, can be difficult.

The Challenges of a Side Business

With all the benefits you get from a side business, how come not everyone who wants a side business actually starts one, let alone succeeds with one? This is because starting a business involves many challenges, and these challenges compound if you're already spending most of your workdays being an employee. Here are some of the problems and obstacles you can expect:

  • You'll be working with limited time and energy. Since you'll be working a day job and keeping most of your other personal obligations, it's likely that you won't be able to spend as much time on your side business as you'd like to. This can make progress feel slow and, if you burn out from working too much, it can lower your morale as well. 
  • Your attention will often be divided. Having a side business can pull your attention in multiple directions. For example, when working on your business, you might feel guilty that you're not working on your "real job" or are using up the time that should have been spent with your family. The opposite could happen too—you might feel frustrated when you're unable to use your free time for your side business.
  • There's a steep learning curve. For those who have little experience or knowledge in starting a business, starting a side gig can seem intimidating because of all the skills you need to learn to survive. Even if you're getting some help from experts, you'll still need to be familiar with the general concepts of client management, team management, hiring, marketing, sales, and the other skills that are needed to run a business like yours. It's likely that you'll have to do some reading and research before you set up shop.

This challenge exists even for more experienced entrepreneurs. No matter how experienced you are in your field or in starting businesses, since no two businesses are exactly alike, there's still much to learn about starting this specific side business. There will always be unpredictable complications and problems that you'll only master through experience.

Since you'll be encountering these challenges, how do you make your side businesses work despite them?

  • Always be aware of your goals. So that you'll be extremely focused on reaching them. You'll also be able to make decisions quickly since you'll know your goals well (e.g. if your aim is to make $5,000 as quickly as possible, it might not make sense at this stage to do time-intensive projects just for exposure or prestige). Also, having very clear, measurable goals allows you to schedule your life in such a way that every important part has its own time. You can better deal with your feelings of guilt about not giving all your efforts to your full-time job or not spending your time with your family, because you'll be confident that you've carved out enough time for those other activities as well.
  • Keep things lean. This means working only on the most urgent essentials that will bring you closer to your goal. Make a list not just of things to do, but things to avoid doing, especially if these unnecessary tasks will eat up a lot of your time with little or no measurable returns. 
  • Get the buy-in of your family and anyone else who might be affected. While you don't need to get full permission, it will make things easier if your family supports your goals. As for your employer, while you don't have to disclose the details of your side business, it's best to go over your employment contract and make sure that running your business doesn't bring up conflicts of interest or breaches of contract. 

How to Start a Side Business: Step by Step

Given the above benefits and challenges, if you feel that starting a side business is right for you, here are the steps you can take that can improve your chances of success:

Step 1: Plan Out Your Schedule and Strategy

Have a realistic accounting of the time and energy needed to launch and run it, and compare with how much time and energy you actually have for releasing it. This will give you a realistic timeline to work with.

Note that it's very likely for your first schedule estimate to be wrong. If this turns out to be the case and you have trouble following your schedule, simply readjust it based on your habits and energy levels throughout the week. Making several tweaks to your initial plans is just part of running a business, so accept that iterating will just be part of the job.

Step 2: Research Your Customer

Usually, when people think about starting a business, they start with an idea. This means that if they don't have an idea yet, they can't start a business. To free yourself from this limitation, consider thinking about the customer first. Who do you want your business to serve? What do they need? 

But if you already have a list of possible businesses you'd want to start, you can use those ideas as a starting point for thinking about your customer. For example, if you want to launch a printing business, be specific about which types of clients do you want to prioritize: SMEs, large companies, or individuals? Among those, which particular niche do you want to serve: Event planners, marketing firms, or restaurants? By narrowing down your potential clientele, you can figure out their needs so that you can fine-tune your business idea to meet those needs.

How do you figure out what your future customers need? You can start by asking them. You can conduct online surveys, research any statistics or surveys you can find about your target market, or interview your personal contacts who are part of that market. 

Here are the things you need to know about your customer at this stage:

  • What challenges do they face regularly? What frustrates them? You can keep this question specific to the solution you're going to provide. For example, if you're thinking of creating a lawn care service, ask them what frustrates them the most about caring for their lawn.
  • What are their aspirations and goals? Again, keep it relevant to your idea. Given the above example, you can ask what they want their dream lawn or garden to be like.
  • Tell them about your business idea. Ask them if, hypothetically, you're ready to provide them with this product or service right now, how much do they think it should cost? Alternatively, figure out how much they are already paying for similar products or services. If they haven't paid for similar solutions and those solutions are readily available, find out what's getting in their way when it comes to making a buying decision.

By finding out the answers to these specific questions, you can quickly tell if your business idea is the right fit for your target customers—before you even spend a minute planning out your product or service idea.

Step 3: Craft and Test Your Business Ideas

Now that you know a lot about your customer, what types of products or services would they be interested in? Brainstorm using the information you already have. If you're done brainstorming or if you already have a list of business ideas that are a fit for your target customers, it's time to start testing the validity of these ideas. At the end of these tests, you need to know which offers your target customers will be willing to pay for. 

The following guides on Envato Tuts+ contain some tests you can do, and some tools to use for these tests: 

You can also do offline tests, such as printing and posting flyers, or through word of mouth by going around your neighborhood and talking to individuals and businesses about the product or service you'll be offering soon. If you have the resources to spend, you can place small ads in local newspapers or radio stations.

The point of these tests is to learn whether you'll get any responses to your offers. Which product or service idea did you get the most responses for? If you highlighted any of your customers' pain points or goals in your tests, which one got the most responses?

This might seem like an unnecessary step, after all, you are pressed for time and already have a day job. But that's exactly why testing customer response is necessary. Before you start investing more of your precious time and energy in building, marketing, and planning your product or service, you need to know which version of your idea will give you the highest returns.

Step 4: Create Your Minimum Viable Product or Service

This is where you take everything you've learned and done so far and start creating the product or service you'll be selling. Since this is a side business, it's best to create a "minimum viable product" first, the simplest version of what you're planning to sell. At this stage, it's tempting to fully flesh out your products, but doing so would be gambling and might distract you from your immediate goal: Making your side business profitable as early as possible.

If, for example, you're providing copywriting services, start by providing the service that was most called for when you were doing your research. Now is not the time to provide a full suite of writing services—that can come later after more research and testing, or after some clients have started asking for add-ons.

The concept of having a "minimum viable product" comes from the Lean Startup method, a framework developed by author and entrepreneur Eric Ries. The Lean Startup approach is meant for managing the risk behind growing a business and releasing products as quickly as possible. Though the framework is often used in the tech sector, many of the ideas are applicable in other types of business as well.

Step 5: Start Selling

For new businesses, usually it's a good idea to turn to the people you consulted with while creating your product or service and actually sell it to them. Since you're very familiar with their goals, desires, and challenges, you'll know exactly how your offer fits into their needs. Alternatively, you can make announcements, place inexpensive ads, or promote your offers in the spaces where your target customers tend to gather, whether it's offline or online.

As you start selling your product or service for the first time, you'll learn to recognize the sales funnel—a handy framework for thinking about the flow of sales opportunities through your business. After all, not all interested parties who listen to or read your sales pitch or view your online store will turn into paying customers. This is why it's important to keep your sales funnel flowing with leads. In case you get stuck or fail to meet your sales goals, the funnel will tell you the exact areas of your sales process that need improving.

Remember to set sales goals before you start selling. This goal should include how many sales you intend to make and the deadline for meeting that goal. Having a goal and deadline will give you a specific timeline to follow so that you can tell if it's time to reconsider how your funnel works.

working a side business late at nightworking a side business late at nightworking a side business late at night
Starting a side business may involve some late nights, but it can be very rewarding. Image source: Envato Elements

Step 6: Evaluate Your Progress

After you've gone through your sales process, study your progress so far. Did you reach your sales goals? What were the main situations or decisions that contributed to that outcome? Where are you having the most difficulty? Go back and review every step you've taken so far and see which parts you could have done better and will do better at next time.

It's also important to go beyond your business' profitability and consider the other challenges and opportunities you face. Are you having trouble carving out time for the business during weekends? Is your home a difficult space to conduct business in? Do you find yourself missing and enjoying your day job more than you do your side business? Your answers will tell you what your key actions should be in the next steps if you want to be more effective at balancing both your side gig and your full-time job.

Step 7: Improve and Iterate

Given your review, which weaknesses do you need to fix right now before you take your side business any further? Have an action plan for fixing these weak spots and keep repeating this step and the previous step until you've worked out the kinks. Otherwise, you'll be bringing these problems with you and perhaps even compound them when you take the business further or decide to quit your day job. 

Also consider the opportunities and goals you'd like to reach for next. What changes do you need to make right now in your side business if you want to meet your goals or attract more opportunities? 

This could mean saving up for a bigger marketing budget, hiring people to help you out, upgrading your tools, or improving your product or service. No business will ever be perfect, but by regularly reviewing and tweaking your business, you can make it thrive even in challenging circumstances. 

Use a tool like the Business Model Canvas to visualize your business model and look for areas to improve: 

Step 8: Take It to the Next Level

Defining what the next level is for your business is entirely up to your big picture goals. Were you planning on quitting your job? Do you want to not just focus on sales, but also start marketing and branding? Should you be expanding the scale of your operations? Define what the next level is and what criteria you need to fulfill to reach it.

Sometimes, this stage also means making specific legal and fiscal decisions about what the next stage is. If you're earning enough from your side gig, this could be a good time to start consulting with an accountant about business registration or how to take advantage of tax deductions and benefits.

Making Your Side Business Work

Starting a side business sounds so simple, but it's much harder in practice. You will have doubts and long workdays, and you'll be pushed out of your comfort zone. It may be challenging to build a sustainable side business while working a day job, but if you make a consistent effort over time, conduct regular reviews, and keep your sales pipeline flowing, you can make it work.

If you take your side business online, then you may need a website template to get a professional-looking site set up quickly and easily. You can purchase a quality site design at Envato Market (ThemeForest). We have thousands of professional options to choose from.

Editorial Note: This content was originally published in 2016. We're sharing it again because our editors have determined that this information is still accurate and relevant.

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