by Kailey Hagen | Feb. 5, 2020
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The average person makes a decent chunk of change from their side hustle. But here’s how you can do even better.
You've probably heard stories about some wildly successful businesses that started out as nothing more than a side hustle. On the other end of that spectrum, you might know some people who are slaving away at their side gig without much to show for it. With such a wide range of possible outcomes, you might be wondering how much you can actually make from a side hustle. Well, wonder no more.
The Ascent recently conducted a survey of 493 respondents who all had their own side hustles. It found that the average man earned about $8,948 per year from his side hustle, while the average woman earned about $6,085 from hers. That comes out to about $746 per month for men and $507 for women.
That's a pretty nice chunk of change, but there are things you can do to fatten your wallet even more. Here are a few strategies to try.
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Side hustles can range from driving for a ridesharing company and walking dogs to designing websites and fixing broken electronics. There are more options today than ever, but they don't all pay the same.
The most lucrative side hustles are often the ones that require more specialized training and equipment. This might explain to some degree the gender gap we found between men’s and women's side hustle incomes. The men surveyed were more likely to have side hustles that involved specialized training and equipment, and this likely enables them to charge more for their services.
Think about your skills -- particularly, unique skills that few other people have -- and brainstorm ways to turn those skills into a business. Ask for help from friends and family if you're struggling to come up with ideas.
Most side hustles involve at least some costs that can eat into your profits if you're not careful.
For example, rideshare drivers have to buy gas more often and put more wear and tear on their vehicles. Some also purchase snacks and beverages to keep in their cars for their passengers.
Many of these costs are unavoidable, while others are up to you. You might decide that it's worth spending a little extra money to give your customers a better experience, or you might decide that some expenses don't add much to your business. Try to limit your costs to only what's essential and avoid taking on debt for your side hustle.
Don't overlook the indirect costs of having a side hustle as well. If your side hustle is keeping you too busy to cook for yourself, you'll probably start spending more money on dining out, and this could affect your profits as well.
If you hope to be profitable, you need a regular routine to keep yourself in the habit. A set schedule can also help customers because they know when they can contact you. Figure out when you can devote time to your side hustle and try to stick to roughly the same hours every week. Just don't run yourself ragged. If you push yourself so hard that your regular job performance begins to suffer, you could end up costing yourself money instead of making it.
Draw in new customers by advertising your business on your social media channels. You should also encourage your friends, family, and existing customers to tell others about your business. These sources of advertising are free, but you might also want to consider paid advertising, too. However, you must weigh the costs to decide if this is worth it.
Think about what distinguishes your business from your competitors, whether it's a unique product, excellent customer service, or more advanced training. Highlight this in your marketing materials so that people understand what sets your company apart.
Keep yourself motivated to grow your business by setting goals for yourself. These might be financial goals or they might be related to the service you offer your clients. For example, you might have a goal to attend a new training course or to purchase new equipment for your business. Write all these goals down and set deadlines for them. Then, track your progress over time and make adjustments as needed.
Side hustles don't have regular paychecks that the government can take money from, so it’s up to you to set aside the money for your taxes and pay them quarterly. If you had your side hustle last year, your tax return should tell you how much you must pay in each quarter this year. Otherwise, you can use this worksheet to estimate your payments. Put this money in a separate bank account so you don't accidentally spend it.
You are allowed to deduct business expenses from your taxes, but you must keep records and receipts to prove that your deductions are legitimate. You can also deduct only things that you use solely or primarily for your business. You can't deduct your cell phone bill because you once took a business call on it, but you could if you used that phone only for business.
Growing a side hustle takes time and dedication, but it can boost your income quite a bit if you're serious about it. Try some of the above tips and see how much of a difference they can make to your bottom line.
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