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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Five Stages of Business Growth (25-slide PowerPoint presentation). This presentation introduces a framework for entrepreneurs to use when building and navigating their business from a nascent, startup state to an enterprise with a global footprint. This framework, called the 5 Stages of Business Growth, is based on the fact that all businesses experience common [read more]
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The ups and downs of being an entrepreneur can force you to come up with money just to live. Over time, freelancers find their niche and customer base, making it easier to focus solely on their chosen work. However, having some ideas for supplemental income in the early stages of starting a new business or for particularly lean times can take pressure off.
The time to consider your supplemental income is before you need it. If you already have a plan B to survive a sudden loss of clients or non-paying customer situations, you will not risk losing everything you have worked so hard for.
Before working more or outside your regular gigs, decide if your current rates are high enough. The average small business owner’s salary is around $69,000 per year. Those just getting into the industry may make as little as $30,000 and those with years of experience or special skills might reach $133,000.
Study competitors to determine the going rate for your products or services. If you are making less than they are, it may be time to adjust some things.
Having the option to bring in supplemental income is comforting. However, focusing on building your business is the most effective solution. Make sure you are charging what you are worth.
You have likely heard all the advice to drive an Uber, deliver food or shop for groceries for others. While these methods are an excellent way to bring in a bit of short-term supplemental income, they only work if you live in an area supporting ride sharing and other concepts. For example, if you live in a rural community hours from the nearest grocery store, you will either spend a lot of time and fuel driving to gigs, or not have enough extra work to keep you busy.
Entrepreneurs will likely put in more than full-time hours to keep things afloat. In the early days, you may not have much revenue coming in, but you serve as the salesperson, marketing department, accountant and several other roles. Adding on additional work to bring in more income seems grueling when you do something you do not care much about.
However, it is much easier to put in the time if you are passionate about your work. For example, if you love to make wreaths for doors or grave sites, you might add a small side hustle creating items for friends and family.
Whether you get busy and do not have the time to declutter or you have extra components, selling off what you can live without can bring in additional funds when you need them the most. If you have an old smartphone, you can get an estimate online of its worth and potentially make several hundred dollars for something you do not use. The advantage of selling items is it does not require much extra effort and brings in cash fast.
Make sure your side hustle is worth the effort. If you spend six hours making $20, you may be better off grabbing and reselling used items on local classified boards or getting a job at the local fast food restaurant to make a set wage.
Adding some side hustles — such as designing websites or creating images for companies — sounds good, but difficult clients can eat into your time and profits. Some business owners also offer services at a reduced rate on sites such as Fiverr and Upwork until they bring in enough profit to leave those third-party sites behind.
Grabbing supplemental income from proven sources in your field is smart. However, set some rules, such as a set number of edits. Also, know that if the customer is unhappy, you may have little recourse and might not get paid. They can refuse the service and the third-party provider will likely side with them.
For most business owners, the holidays are a time when sales see an uptick. On the opposite end of the spectrum, January and February and summer months can see a lag in sales.
Picking up seasonal side hustles during the slow periods keeps you busy and helps create a steady income flow. For example, you might use the summer months to go to local art fairs in neighboring towns and sell items while getting the word out about what you do.
Choose supplemental income based on what you already do. You may stumble upon a need in your local community and be able to incorporate it into your small business.
If you run a clothing store and offer fashion consultations or closet remakes during the slow season, can you add these services to what you do throughout the year? Choose something that ties into your small business and you will get to know the industry better, make connections that might come into your storefront and expand what you already offer.
When you see bills coming and there is no money to pay them, it is time to get to work. Entrepreneurs’ unique make-it-happen spirit pushes them to get things done. Consider looking for creative solutions to bring in revenue.
Feel free to take on a part-time job, pick up hustles in the gig economy or start another small business on a shoestring to add to the revenue already coming in. The more trickles of money you have, the better your chances of staying afloat and making your startup successful in the years to come.
You can download in-depth presentations on Entrepreneurship and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
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