Starting Up on the Side for Freelancers and Entrepreneurs
Updated: November 14, 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: 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 will generate revenue. Then if it’s something you want to be doing for 3-5 years (or longer) work under your name or start a corporation.
You can register a business name which acts as a professional alias for your sole proprietorship. When you start up lean it keeps costs down and makes it easier to wrap your head around starting a business without a lot of money. There are a variety of software services which are free to help aspiring entrepreneurs get started.
Q2: How can part-time entrepreneurs balance a full-time job, starting up and other family and professional commitments?
Only accept work you will commit to complete. I recommend beginning with small side projects that can be delivered in one or two work sessions. This will help to see if the service you are offering is the right fit for you as an aspiring entrepreneur.
Working extra nights or a day on the weekend for three to four-hour intervals is a great place to start. Consider limiting the number of working hours in the business to avoid burnout if you have a full-time job. Then, calculate if the money earned is profitable and worth it after taxes on the increased annual income.
Q3: What are some of the benefits of starting up on the side?
Starting up on the side can be a plan B option. A side business generates revenue that anyone can use for retirement, savings, vacation, or any other financial needs that uniquely support 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. Aspiring entrepreneurs can keep their costs down by purchasing software or services when needed, and not a moment prior. Also, spend money only after you earn it. Be mindful of high-interest credit cards and their use for business expenses because the interest rates are 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 does not violate the conditions of employment, I think it is safe to keep a side gig or startup business to yourself as an aspiring entrepreneur.
If a conflict of interest presents itself, let your employer know. You can negotiate a new employment agreement that works for both parties. For example, you could switch your full-time employment to a contract, so you can work other businesses too.
Q6: When should a part-time entrepreneur consider jumping full-time into their business?
When the side-gig revenue fully supports them financially. Savings are helpful for cash flow because you do not want to be scraping by.
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?
One innovative strategy that proves successful in sustaining a part-time business is making the time to do it, showing up regularly and growing the business to full-time hours.
Q9: How can entrepreneurs leverage the sharing economy to build supplemental entrepreneur income streams?
Instead of committing to a long-term lease for office space, rent a desk at a business centre or popup store. Instead of investing in building a commercial kitchen, rent time at a shared commercial kitchen. If you need a vehicle occasionally, rent one instead of committing to a lease or ownership.
Q10: When is starting up on the side just not worth your time?
When there’s no profit from the business efforts, then it is 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 as an aspiring entrepreneur and the idea out first. See if you want to run a business long-term before committing to big decisions like quitting your job, relocating, or financially investing big in a business. I recommend doing what you can in the available free time to start, purchase what is only required to start and operate and develop all materials before jumping into full-time employment (e.g., website, logo, marketing materials, slide deck, and developing social media).
For example, 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, slide deck and marketing plan. Doing the early stage parts of a business will help aspiring entrepreneurs save time and money if they decide to commit and quit a full-time job to run the business full-time.
Some things to work on in your early stages of starting a business:
Write a business plan
Create a LinkedIn profile and develop contacts on LinkedIn
Research operational costs for all aspects of the business operations (e.g., insurance, phone, internet, retail or office space, software costs, marketing and advertising costs)
Develop marketing materials (e.g., design a logo, build a website, write copy for the website, create a promotional video)
Create a marketing plan and sales materials for future business meetings
Find an accountant, bookkeeper, lawyer, business consultant, mentor or business coach
Hire talent to help you with areas of the business (e.g., business coach, web designer, logo designer photographer, virtual assistant, social media specialist)
