How to start a side hustle and turn your idea into a profitable business

Whether you’re a nine-to-five warrior or a budding entrepreneur, side hustles are on the rise. Nearly 40% of U.S. adults have a side hustle, bringing in an average of $810 per month.¹ The numbers are even higher among younger populations like Gen Z and millennials, where approximately 50% of Americans earn extra income through side hustles.¹

How to get started with your new business idea

Starting a business begins with a great idea — one that can fulfill a need and generate income.

For example, are you an avid baker? A dog lover? Or a handy person? You could open a delivery-only bakery, start a dog-walking business, or launch a mobile home repair company.

Here are ways to brainstorm new business ideas:

• Generate relevant ideas: Identify your passions and skills, brainstorm ideas, and consider market gaps. Also, consider identifying problems in your community or industry and think of innovative solutions.
• Assess your skills: Understand what you're good at and how you can monetize those skills.
• Conduct market research: Study your target market, customer needs, and competition. Explore where there is unmet demand or underserved audiences.
• Network: Discuss ideas with friends, mentors, and industry experts to gain fresh perspectives.
• Validate your idea: Ensure demand exists by using surveys, collecting feedback from potential customers, and analyzing the success of similar businesses.

Your side business idea should align with your interests and expertise — this will not only make the journey more enjoyable but may also increase your chances of success. Check out more steps to start an online business.

Discovering profitable side business ideas

Still not set on an idea? Explore examples of potentially profitable side business ideas that require little to no startup costs:

• Digital services and freelancing: Services like graphic design, content writing, social media management, or digital marketing consulting.
• E-commerce: Sell products through online platforms, utilizing digital marketplaces to reach a wide audience.
• Skill-based ventures: Turn skills like organizing, home repair, photography, or tutoring into side hustles.
• Passive income streams: Explore opportunities like affiliate marketing or creating digital courses to generate income passively.
• Local services: Provide services like pet sitting, gardening, transportation, college admissions advising, etc. Determine how to choose an online marketplace for your business.

Key considerations before starting a side hustle

From time management to legal and finance, there are several factors to consider before launching a side hustle:

Effective time management

Time management and side hustles go hand-in-hand. You'll need to find a way to juggle your side business with any existing commitments, such as a full-time job, family responsibilities, or other obligations. Here’s how:

• Prioritize: Determine your priorities and allocate time accordingly. Create a schedule that accommodates both your primary commitments and your side hustle.

• Optimize: Optimize your workflow by identifying time-wasting activities and streamlining processes.

• Delegate: If feasible, consider delegating tasks or outsourcing certain aspects of your side business to free up more of your time.

Legal and finance

Legal and finance are crucial for any side hustle, helping prevent complications down the road. Here's a closer look:

• Business structure: Decide on the appropriate legal structure for your side hustle, whether it's a sole proprietorship, LLC, or another entity.

• Permits and licenses: Research and obtain any necessary licenses or permits required for your business.

• Taxes: Understand your tax obligations, including income tax, self-employment tax, and any deductions or credits that may apply to your business.

• Budgeting: Analyze business startup expenses and create a budget to manage your costs and cash flow. Also, learn why some entrepreneurs decide to apply for a PayPal Business loan.

Realistic goals

Think about where you want your side business to be in the future and how it aligns with your overall life and career goals. It may be helpful to:

• Get granular: Define specific, measurable, achievable, relevant, and time-bound (SMART) goals for your side hustle.
• Set milestones: Break down large goals into small milestones to track your progress and celebrate achievements along the way.
• Adjust as needed: Be open to adjusting your goals as your side hustle evolves and as you gain more insights into its potential.

From idea to action: Launching your side hustle

Ready to get started? Follow these general steps before launching your side hustle:

• Develop a game plan: Create a clear business strategy and timeline, outlining your objectives, target audience, and key milestones.
• Go digital: Establish an online presence through a website, online marketplace, or social media.
• Consider online marketplaces: If relevant to your side hustle, explore social marketplace platforms for selling products and services. Learn how to sell on Facebook Marketplace.

• Leverage social media: Connect with potential customers, build brand awareness, and drive sales. Learn how to market your business on social media.

• Create a pricing strategy: Develop a pricing strategy that balances competitiveness with profitability.

How to promote your side hustle and amplify your reach

Once you've chosen a side business idea and set clear goals, the next step is to create a marketing strategy. Building an audience and a customer base is key — here are ways to cultivate an engaged community:

• Social media: Leverage the power of social media platforms to showcase your offerings and connect with potential customers. Share compelling content, engage with your audience, and use paid advertising to expand your reach.

• Content marketing: Create valuable content that resonates with your target audience. Consistent, high-quality content can establish your side hustle as an authority and attract an engaged audience.

• Networking: Actively participate in local events, online forums, and networking groups. Building relationships with peers, influencers, and potential customers can help you gain visibility and trust.
• Referral programs: Reward existing customers for referring new clients. Encourage word-of-mouth marketing by offering discounts, freebies, or other incentives.
• Social proof: Collect testimonials and reviews that showcase the value of your side hustle. Recommendations are often one of the most effective ways to build trust and attract new customers.

How to overcome initial challenges of starting a side hustle

Side hustles aren’t without their challenges. From staying motivated to maintaining a healthy work-life balance, here are some insights and strategies to conquer any obstacle:

• Keep your motivation high: Develop practical, everyday business habits and maintain your drive by setting specific, achievable goals. Celebrate small victories to boost your motivation, and enlist a trusted friend or family member to hold you accountable.
• Work-life balance: Establish clear boundaries between your side hustle and personal life to prevent burnout. Prioritize self-care activities to recharge, consider outsourcing tasks or delegating responsibilities to free up time, and implement time management techniques to maximize productivity.
• Continuous improvement: Embrace feedback from customers or clients, stay informed about industry trends, and keep an eye on competitors. Diversify your offerings to mitigate market fluctuations, and be open to pivoting or making adjustments to align with changing demands. Learn more about adapting changing trends in the retail industry and beyond.

Explore more tips on running a successful business and stay up-to-date on the latest challenges for online businesses.

Launch your side hustle with PayPal

As side hustles continue to gain momentum, consider this your opportunity to turn your passion and skills into a profitable business. Take that first step, develop your game plan, and watch your side hustle grow.

Learn more about opening a PayPal business account.