Side hustles are supposed to be things you do to bring in extra money. Working in the evenings or at weekends can support your finances and leave you better off than you ever thought possible.
But, of course, it comes at a cost. Side hustles aren’t free. Instead, they require you to spend money, sometimes a lot of it, to get to where you want to go.
That’s where this post can help. It explores some of the methods you can use to secure additional income and increase your profitability.
Here’s everything you need to know:
Start Small
The first piece of advice is to start small. Don’t rush into a side hustle and try to expand it as rapidly as you can while throwing caution to the wind unless you’re in an arms race with other startups and there can only be one winner (a very rare situation).
Once you start scaling your business, then you can begin spending money on the tools and software you need to thrive. But before that point, it pays to remain low-cost.
Use Free Or Affordable Tools
You can also lower your costs by being careful about the tools you choose for your business. Only select those that offer value or are available for free.
For example, if you deal with people, then you might need to read articles like Shift & Employee Scheduling Software Made Easy | Sling. Or if communication is an issue at your firm, chat solutions that replace email could be the optimal path forward.
Use Your Home Office
If you’re not already, it’s also a good idea to use your home office if your business will allow it. Working from home cuts down on transportation costs, office rents and other utilities, allowing you to start being profitable from the moment you roll out of bed and set up your laptop.
Yes, home offices aren’t quite as professional as conventional workplaces. But that doesn’t matter for the vast majority of businesses. You can run them as effectively from home, or you can simply hire office space when you need it.
Start Outsourcing
Saving money is also possible when you start outsourcing. Passing tasks onto someone else through channels like Fiverr and Upwork can help reduce the burden on you, freeing you up for more revenue-generating tasks that more than offset the cost.
Once you start outsourcing, it allows you to put more of your business on autopilot. It sits in the background earning you money while you look for new opportunities elsewhere to expand the size of your operations.
Only Use Used Equipment
If your side hustle involves making physical products, then you can also save money by only buying used equipment (and being strict about it). You can often save 50% or more on most items, massively reducing your outgoings.
Most people with side hustles look on social media or eBay for the products and items they need first before buying them new. For example, you can often get massive discounts on items like cameras and tools by going online and searching for bargains. You can also go to stores that refurbish items for you and offer them at a massively discounted price. Many times, these have guarantees that ensure you haven’t wasted your money.
Use Shared Resources
Another approach that many entrepreneurs with side hustles try is leveraging shared resources. These can cut the costs involved in running a side hustle further and also reduce the risk of trying out new ideas.
For example, you could subscribe to a coworking space. These facilities essentially provide an office when you need it without the usual long-term lease commitments.
You could also consider using a shared kitchen space if you’re in the food business or taking over a corner of a workshop for crafts that serve as inputs to a nearby process.
The trick here is to be as resourceful as you can. The more you can leverage clever solutions and systems that are already out there, the more you will be able to do. Entrepreneurs who lean on others are less likely to go out of business because of high costs.
Track Your Tax Deductions
Tracking your tax deductions can also help you reduce your outgoings significantly, making your side hustle more profitable. The more you can reduce your taxable income, the higher your take-home pay will be.
Of course, you need to be careful if you plan on using this strategy. You don’t want to get on the wrong side of the law. But if you can make progress in this respect, then you can often increase the gap between what you earn and what you spend.
Make sure that you use mile-tracking software if you drive around for work. These apps keep a record of how far you’ve driven, allowing you to keep accurate records to show the taxman in the event of an audit.
Negotiate With Vendors
Negotiating with the people who supply your business can be another excellent way to reduce costs and get more out of your side hustle. Asking for lower prices or arriving at deals with these individuals can be a surefire way to improve the overall performance of your business.
Where possible, try to work with small businesses. These outfits tend to have significantly more control over pricing, allowing them to grant significant discounts if they have an incentive to do so.
You can also try asking larger vendors for money off and reduced prices, but they won’t always provide it. Some may offer additional perks if you call them, but these are rare.
Start Bartering
You could also try bartering to save more money on your side hustle. Offering to trade something you can make using a few inputs for something that costs a lot can be an excellent way to bypass the price system and save your capital.
For example, you could offer your web services to an accountant and then get them to fill out your tax forms for you for free.
Bartering can be complicated because of the differences in relative value between services. But because people aren’t used to it, you can often secure yourself some incredible and unexpected deals!
Do Things Yourself
Sometimes, it can also make sense to do things yourself from time to time, instead of outsourcing them. Usually, this approach makes sense when the task is something repetitive you can complete at low cost but that would set you back a lot of money if you went to a professional instead.
For example, bookkeeping is often expensive. But if you learn to do it yourself, you can bring down the price tremendously.
The same applies to writing. Doing it yourself is free and quick if you’re good at it, but expensive if you go through an agency.
Don’t Go Into Debt
Side hustle costs can also get out of control if you go into debt. Financing everything on credit cards can cost a lot of money if you don’t keep your outgoings under control. Credit card companies often charge a lot of money for borrowing long-term.
If you do use debt to finance your side hustle, make sure that it goes into productive investments. Don’t spend it on anything that doesn’t offer a reasonable return in the future.
If you can bootstrap your business, that’s even better. This way, you can avoid high interest charges that plague many people who try to set up their own businesses.
So there you have it, a guide on how to save money on your side hustle. Was this advice helpful?