Often the subject of think pieces about the gig economy, side hustle culture may also be a hotbed for entrepreneurship. According to an Intuit customer survey, nearly two-thirds of 18 to 35-year-olds have started or plan to start a side hustle to bring in extra money. And about 44 percent of entrepreneurs started their small business as a side hustle, according to Entrepreneur magazine.
Making the leap from side hustle or startup to business owner is a big jump. Where should you start? Experts at Northern Colorado’s small business development centers can help answer just that.
Think it through
Jaydon Rice is the interim executive director of the Small Business Development Center serving eastern Colorado, which includes Weld County. She operated several businesses as a one-woman show before falling in love with helping other small business owners. One of her biggest pieces of advice for entrepreneurs at all stages is to use the free resources available to them—their local Small Business Development Center being one of them.
These offices offer:
• No-cost, confidential, one-on-one business advising from a network of experts across the state.
• Essential training, events and workshops.
• Specialized business support in areas such as marketing, business planning, financial management and more.
Rice encourages folks to go through what she calls “business ideation” before anything else. This involves thinking through the idea and nailing down some specifics, such as:
1. Do I want this to be a side hustle or my livelihood? Determine how much time you can devote to your business. If your goal is to build a business that can fully support you, consider the milestones you need to hit in order to achieve that.
2. Is there actually a market for this? How do I know? To find the answer, consider making an appointment with the Business & Nonprofit Center, a resource provided by Poudre Libraries, to learn how to conduct market research. You should be able to identify who your customer is and whether the market is sustainable or even growing.
3. What are my personal priorities? Rice sees many business owners get six months in and realize their personal priorities clash with what is needed as an entrepreneur.
“If your immediate goal is schedule flexibility, family time or a lower level of stress, small business ownership probably isn’t for you,” she says. “But if your goals are to be able to follow your passion, build up your community and create a legacy that you can pass down to a child, those might be good reasons to be looking at small business ownership.”
4. Do I have support and buy-in from loved ones? Rice has seen many examples of one person being all in on a business while their partner isn’t.
“I have seen [this affect] too many relationships, whether it be spousal or a significant other, child, parent, brother, sister or cousin,” she says. “If they’re going to have their life altered by this decision, you need to consider what their opinion of it is.”
Make a business plan
It doesn’t have to be fancy. In fact, you can probably find a business plan template specific to your desired industry online. Rice says business plans are the most impactful tool for startups.
“It gives you a roadmap to follow,” she says.
A business plan can be crucial when owners get three months in and find themselves overwhelmed. But it’s also the first step to getting capital, Rice says.
“Even if a business doesn’t think it needs a loan to start, maybe three, six or nine months down the line, if they need some operating capital, they already have a business plan they can dust off and make a few tweaks to,” she says.
Go to networking events
Networking helps you find investors and get plugged into the business community. Briana Hale, marketing and communications coordinator for the east Small Business Development Center, says networking can even help small business owners realize they aren’t alone.
“I usually recommend starting with the chamber of commerce because those are all going to be similar, like-minded individuals,” she says. “Getting connected with town or city contacts can be helpful as well. Then there are lots of startup groups, events and get-togethers that are scattered throughout communities.”
Besides expanding your contact list, networking can help you find partnerships you might not have thought about before.
“You never know who you can partner with,” Hale says.
Prep for Tax Season
QuickBooks and Xero are bookkeeping software options that can make tax season easy, Rice says. Finding a comfortable system can also mean manually entering data into a spreadsheet or using an app to scan receipts or track mileage.
Rice recommends talking about your tax strategy with a certified public accountant. Look at your expenses and revenues quarterly, both to keep up with taxes and to understand where you might need to cut costs or make investments, she says.
Adjust for products versus services
One of the biggest differences between selling products and services comes down to having the proper registrations, permits, licenses and insurance, says Hope Hartman, executive director of the Small Business Development Center serving Larimer County. Folks often need permits for inventory, retail or food, and they may need licenses to offer services.
“We help point people toward those,” Hartman says.
Hale says it’s also important to work with your town or city to figure out your sales tax rates.
“Every town is a little bit different, so working with a CPA and understanding sales tax for what you’re selling is important,” she says.
One of the biggest differences between service-based businesses and product-based businesses is how you market them, says Martha Alvarez, associate director of the east Small Business Development Center. For service-based businesses, the owner is the brand, she says.
“If that business owner is responsive, they do great work and they know how to communicate, the customer will have a great experience,” she says. “With a product-based business, someone can have a bad customer service experience with the person selling the product, but if they love the product, they’ll continue to come back.”
Know your “why”
In her seven years with the east Small Business Development Center, Rice says she’s been able to celebrate with clients who made their first $1,000 as well as clients who landed $2 million contracts. What sticks with her is each client’s version of success.
“Not every business is looking for $1 million in sales,” she says. “A lot of business [owners] just want to be able to work in what they’re passionate about, make a difference in their community and support themselves and maybe some employees.”
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Handling Stress as a Small Business Owner
According to Forbes, entrepreneurs are more likely to be impacted by mental health issues than the general population. This might look like anxiety, burnout or stress. One small survey conducted by Founder Reports showed that about half of entrepreneurs experience anxiety, and about one-quarter say they have an unhealthy work-life balance. So, what can you do to take care of yourself?
1. Take the time to celebrate wins.
Hale always encourages people to look back at what their business has accomplished.
“A lot of people get so caught up in the growth stage that they don’t look back at what they’ve accomplished,” she says. “Acknowledging the different stages of your business and celebrating them, whether that’s you being open for a year or moving into a physical location, is super important.”
2. Lean on loved ones for support.
“Many of our clients with success stories have really strong support systems,” Alvarez says.
3. Use your network for more than the bottom line.
Meeting up with other passionate people in your industry can help you feel less alone, Hartman says. Your network may also have strategies or ideas to help you address roadblocks in your business, like employee turnover or administrative demands.
4. Use free resources available to you.
Visit the Small Business Development Center serving Larimer County, located in Fort Collins, or the Small Business Development Center serving eastern Colorado, located in Greeley.
