Prepare Now, Earn Tomorrow
Are you currently out of work, looking to supplement your income, or simply want to earn extra to put toward savings? If so, you may be wondering if you have to take on a second or third job. Chances are, you don’t — and you can easily launch a side hustle without committing to someone else’s schedule. Before you get started, take the time to prepare yourself for the world of entrepreneurship, whether you want to open a business or engage in the gig economy.
Finances and Business Formation
Unless you plan to get paid as an hourly or salary employee — meaning someone else handles taxes — it’s a smart idea to register with the IRS to pay quarterly estimates. Virtual Tax Associates can help you get set up to pay taxes as a self-employed individual. You will need your social security number, home-office information, and other documents.
If you plan to open a business, first look for a formation service that can help you register as an LLC. You can file online and save on the attorney fees, but you’ll need to be diligent and research your state’s rules and regulations. You will also benefit from discussing with a tax professional or financial advisor the pros and cons of forming an LLC, which is often done for tax benefits and the structural flexibility it allows as you grow.
Self-Employment or Entrepreneurship?
Self-employment and entrepreneurship are often one and the same. However, before you become a freelancer or start a business, you will want to evaluate your personal circumstances, skills, and availability. As a freelancer, you are self-employed and you work on projects that fit your skillset and availability. You are still an entrepreneur, but you do not have to commit to a particular company or group of clients.
If you choose a more traditional business, which may entail hiring others or opening a brick-and-mortar location, you are looking at a greater time commitment. As a small business owner, you’ll also want to possess exceptional leadership skills and understand that your success or failure is completely up to you.
Finding Work
There are many ways to find work as a freelancer or small business owner. You can test the waters or grow your portfolio by utilizing one of the dozens of gig economy job platforms recommended by Gig Smash. You should also reach out to your friends, family, and professional network to see where your skills may be most in-demand. As a small business, you’ll want to start by writing a business plan, which will necessitate doing market research in your area and industry. This can help you get a better idea of what products or services are most in-demand and where the competition is falling short. A competitive
analysis can also help you identify potential clients that aren’t currently being serviced by existing providers.
Creating a new income stream does not have to be a difficult or lengthy process. But it does require research and you will need to be disciplined to effectively manage both your existing and new responsibilities at work and at home. Whether you want to be the next big startup or simply lend an occasional hand to other local business owners, being prepared ahead of time will offer long-lasting benefits that may help you turn your part-time money-making endeavors into a full-time career where you are in charge of your income.
Virtual Tax Associates is based in Lindstrom, Minnesota, and services individuals and small businesses throughout the US. Get a service quote today.
