Article by Amy Anderson
Committing time to your side hustle is a big decision. The hours and resources you spend need to pay off in a tangible way — but are they?
Smart business owners ensure they’re investing the right time, energy, and money into their side hustles by measuring the right metrics. The finer details might be different for a creative contractor than for a real estate agent, but in general, the most important data includes:
• What you’re working on
• How fast you’re working
• How much revenue is coming in
• How many resources you’re using along the way
Your goal is to create the most revenue with the lowest investment of resources possible. In some cases, that might mean adjusting work hours to accommodate the flow of customers. In others, it might mean subcontracting and temporarily increasing your expenses to maximize personal productivity. Whatever your side hustle, consider tracking these metrics:
1. Number of Clients or Jobs
The number of clients or jobs you take in your side hustle directly impacts how much money you can make. It’s vital to keep track of what you’re juggling so you can be realistic about what you can take on next. In addition to tracking your number of clients, also track the types of clients you’re working with, how big or small their projects are, and the type of work each project entails.
If you primarily find jobs through marketplaces like Upwork, your project parameters can vary widely from gig to gig. That kind of up-and-down, feast-or-famine work can be exhausting. As an alternative, you can set standard project parameters for specific fees to provide yourself with more predictable work. Tracking your jobs will allow you to identify patterns in the kinds of work clients ask for. Then, you can create standard packages that are likely to meet your new and current clients’ needs.
Keeping track of how you’re spending time can dramatically transform how you run your business.
For example, let’s say you’re a designer. If your designing time is completely taken up by projects from only three clients, you can’t add any more. What if those three projects aren’t providing enough revenue to pay for your software, website hosting, and continuing education with profit left over? Then your business model needs to be adjusted so you can take on more clients. Maybe it’s time to hire subcontractors for the smaller tasks so you can spend your valuable time on the things only you can do.
Related to time tracking, productivity metrics measure how much you can do in a given time period.
If you drive for a rideshare, for example, your productivity metric will reflect how many rides you complete per hour. Your productivity will rise and fall in different situations, but if you track it for a week or two, you’ll be able to see patterns. Maybe you’re most productive with short-term fares for errands and least productive when you pick people up from the airport. This information can help you target your most productive time periods and locations.
Keep in mind that everyone has their rhythms. Your productivity can be affected by seemingly small things like time of day and current mood. Your goal with tracking this metric is to find the ideal productivity window for you.
If you’re not tracking how much money your side hustle is bringing in each month, now is the time to start. You have two goals in tracking revenue: understanding how much you earn and recognizing seasonal patterns that affect your income levels. Perhaps winter is slower for you than summer. In that case, you can set aside more of your income in the summer to pad your finances come December.
You’ll also want to track the major sources of your revenue. Are the bulk of your sales coming from one customer? If so, you should plan for what happens if that customer falls on hard times and has to stop their monthly order. Diversifying your revenue streams is vital to the health of your side hustle. Look for opportunities to spread out your revenue over multiple customers and offerings.
Revenue is only part of your side hustle’s financial picture. You also need to track how much money you’re spending in pursuit of that revenue. If you’re investing too much, you won’t make a profit. Expenses include things like taxes, software, website hosting, advertising, hiring childcare to free up your time, subcontracting, vehicle maintenance, office utilities, and anything else you need to pay for in order to run your side hustle.
Side Hustles by Season
A side hustle doesn’t have to last forever. Depending on what your metrics tell you about your productivity, you may determine that certain side hustles are only worth your investment during certain periods of time. If that’s the case, you can diversify your income by taking on seasonally specific side hustles to earn some extra cash. For example:
• Spring brings dog-walking jobs, temp work at amusement parks, and service gigs at local resorts.
• Summer offers opportunities for lifeguarding, lawn mowing, and house sitting while homeowners are on vacation.
• Fall side hustles include tutoring back-to-schoolers and selling concessions at sporting events.
• Winter gigs include holiday-rush retail jobs, personal shopping, and ski instructing.
Ask the Side Hustler
Q: The pandemic hit my career trajectory hard. Rather than wallow in what I’ve lost, I’ve decided to see it as a chance to start over with a side hustle. Are there still gigs available that make real money?
A: Grieving a lost career is hard. Focusing on what you can be grateful for is the best path to progress. The beauty of a side hustle is that you can try it out and decide along the way whether it’s right for you in the long term. In fact, you can try several until you find the right fit. Here are a few hustles that help folks stay ahead in tough times:
• Creative contracting: If you can write copy or design websites, being a creative contractor could be a viable side hustle. Many companies need freelancers with skills in IT, design, and marketing, and you’ll find several online platforms to help you get the word out to potential clients. Some freelancers can even win their previous employers as clients. While creative freelancing can be tough to break into, you can kick-start your client roster by initially offering servicers for lower prices or even in exchange for public testimonials.
• Affiliate marketing: If you’re looking for something that can provide passive income, affiliate marketing is a popular option. By promoting products on your website, blog, or social media platform, you gain a small profit from each sale. Simply place an ad on your page or write a post that advertises the product. When people click the link and buy the product, you get a small percentage of the purchase price. With the right search engine optimization, your affiliate page could bring you a nice passive income to supplement your other endeavors.
• Direct selling: With a variety of products and services to choose from, the direct-selling industry has something to offer just about anyone. Plus, direct selling is one of the few industries that has actually been thriving during the pandemic. Direct-selling companies offer stability, mentorship, and back-office logistics to small business owners who want to join an existing organization on their own terms. Over time, a business owner can gain enough clients with repeating orders to generate a nice income stream. Another benefit is the opportunity to work with products or services you believe in and create customer relationships based on integrity.
Starting over may feel daunting, but in the age of the side hustle, it’s doable. Find the right gig by trying the ones that appeal to you and being open to new experiences. You never know what might pay off.
Amy Anderson is the former senior editor of SUCCESS magazine, an Emmy Award-winning writer, and the founder of Anderson Content Consulting. She helps experts, coaches, consultants, and entrepreneurs discover their truth, write with confidence, and share their stories so they can transform their pasts into hope for others. Learn more at AmyKAnderson.com.