Side gig scaleup

Steps to expand your side hustle

The pandemic isn’t crushing the entrepreneurial spirit. It’s fueling it.

People normally tied to a desk or working double shifts used lockdown to launch side hustles, often out of necessity. And some have turned those side gigs into full-fledged businesses.

These basic steps can help you take things to the next level and give your new venture a shot at staying power.

1

Choose a business structure There are six common types of business entities: sole proprietorship, general partnership, limited partnership, C corporation, S corporation and limited liability company. The structure you choose determines how your business is taxed, as well as who is financially responsible if your business is sued.

Entrepreneurs often default to sole proprietorship because it’s the easiest, but it’s also the riskiest, says Nellie Akalp, CEO and co-founder of corpnet.com.

“There is no registration required nor are there corporate requirements,” Akalp says. But “there is no legal separation from the company, so the sole proprietor is personally responsible for any debts or liabilities.”

Registering as an LLC or corporation is more expensive and requires more paperwork, but shields your personal assets from lawsuits.

2

Open a business bank account Mixing business and personal finances can get messy, especially when it comes to filing taxes or securing a business loan. Open a business checking account to keep business income and expenses organized and easily accessible.

Look for a business account that has low or no monthly fees and fits your business needs in terms of transaction and deposit limits.

3

Upgrade your bookkeeping No more manual spreadsheets or shoeboxes full of receipts; scale up to accounting software that can do some of the heavy lifting for you, like tracking cash flow, managing invoices and generating reports.

Expect a learning curve with any new system, but know that it will help your operation run more smoothly. The right accounting software can also give you deeper insights into your business and help you identify weak points and opportunities to save money.

4

Spell out your business plan Sketch out short- and long-term goals for your business, along with a sales plan, financial projections and potential roadblocks. Be realistic, set specific targets and spell out how you plan to reach them.

Need help with your business plan? Turn to your local Small Business Development Center. These outposts are run by the U.S. Small Business Administration and offer free business consulting services.