Starting Up on the Side for Freelancers and Entrepreneurs
Updated: October 16, 2024
Original Published Date: June 22, 2020
Live Twitter #StartupChats Discussing Starting up on the Side
Q&A with Startup Canada Guest Advisor Christine Whone
In the gig economy, it’s almost impossible not to know someone with a side hustle. If that someone is you, read the answers below to learn more about how to balance starting a business on the side while working from employee to entrepreneur.
Q1 First question! What advice do you have for entrepreneurs on starting up on the side?
Startup lean. You don’t have to register a business, corporation, or HST to start. Test your idea first to see if the idea generates revenue and if it’s something you want to be doing for 3-5 years or longer, just work under your name.
You can register a business name that acts as a professional alias for your sole proprietorship. Starting lean keeps costs down and makes it easier to get started without lots of money. Tons of software services you will need are free to start with.
Q2 How can part-time entrepreneurs balance a full-time job, starting up and other family and professional commitments?
Only accept work you are willing to commit to completing. I recommend beginning with small side projects that can be delivered from 1 to 2 work sessions. This will help to see if the service you are offering is the right fit for you.
Working extra nights or weekend days for 3 to 4-hour intervals is a great place to start. Maybe consider limiting working on your side business to a number of work sessions per month to avoid burnout. Calculate if the money earned to do that side gig is profitable to you.
Q3 What are some of the benefits of starting up on the side?
Starting up on the side can be your plan B option. A side business generates revenue that you can use for retirement, savings, nest egg, rainy days, vacation, or extra anything else you need that uniquely supports your lifestyle.
Q4 What are some of the biggest mistakes entrepreneurs make when starting up on the side?
They don’t start up lean. They believe they need everything right now. Keep your costs down and buy software or use services when needed. Spend money when you make it. Be very mindful of how you use high-interest-rate credit cards for business expenses because interest rates are very expensive when carrying large monthly balances.
Q5 Should a part-time entrepreneur inform their full-time employer if they are starting up on the side?
If it’s not violating conditions of employment, I think it’s safe to keep your side gig or startup business to yourself. If conducting your business doesn’t interfere with doing your employer’s work, or there isn’t a conflict of interest based on your employment contract, it’s probably safe to mind your own business.
If a conflict of interest presents itself, let your employer know. You could negotiate a new agreement that works for both sides. Maybe if you want to be a full-time consultant or full-time freelancer, you could switch your employment to a contract arrangement, so you can work on other business initiatives you are passionate about.
Q6 When should a part-time entrepreneur consider jumping full-time into their business?
When the side-gig revenue supports them financially. Savings are helpful for cash flow. You do not want to be scraping by. Set yourself up for success.
Q7 What are some of the top tools and technologies to help part-time entrepreneurs do business anywhere and anytime?
Bookkeeping Software: QuickBooks
Website Software: Squarespace
Adobe Creative Cloud Software: PDFs, design, and video editing
Group Conversation: Slack, Zoom, Google Hangouts
Online Appointment Scheduling: Acuity, Calendly
Q8 What are some innovative strategies that have proven successful in sustaining a part-time business while being employed full-time?
I think one of the most innovative strategies that prove successful in sustaining a part-time gig is making the time to do it, keeping it up and growing it to a full-time business.
Q9 How can entrepreneurs leverage the sharing economy to build supplemental entrepreneur income streams?
Instead of signing a long-term lease for retail or office space, rent a desk at a business centre or popup store. Instead of building a commercial kitchen, rent time or space at a commercial kitchen. If you need a vehicle once in a while, rent it instead of a lease or ownership.
Q10 When is starting up on the side just not worth your time?
When there’s no profit from your efforts. It’s just a hobby. This article helps you to know the difference between a business and a hobby.
Q11 What is your final piece of advice for those starting up on the side?
Start lean. Test yourself and your idea out first. See if you want to run a business long-term before making big decisions like quitting your job, relocating, or investing in a business with savings. I recommend doing what you can in your available free time. Use your free time to work and explore the side gig idea in the evening, on weekends, or over a holiday.
Working on the early stages of a business will help you determine the operational costs and create opportunities to develop marketing materials like a website or research a business plan. Doing the early stage parts of a business will help you later so you can hit the ground running after you quit your full-time job to run your business full-time.
Some things to work on in your stages of starting a business:
Write a business plan and develop contacts on LinkedIn
Research operational costs: insurance, phone, internet, retail or office space, software and advertising costs
Develop marketing materials (e.g., design a logo, build a website, write copy for the website, create a video)
Create a marketing plan and sales materials for business meetings
Find an accountant, bookkeeper, lawyer or business consultant
Hire talent to help you with areas of the business (e.g., business coach, web designer, logo designer photographer, virtual assistant, social media specialist)
