10 Steps for Setting Up a Side Hustle - Step #5 Setting Goals
Why are you doing this?
If you’re looking to turn a hobby or passion into a business, and you want to go about it seriously, you need to have a “why.” Not why do you like your hobby, or why should someone pay you, but why are you looking to have a side hustle. Why are you trying to make money doing what you’re doing? This post will walk you through determining your true goals, and then how to measure them so you know whether you’re succeeding, and whether it’s time to grow, move on, or pick another goal/hustle.
Your goal may be right in front of you
Amazingly, for some people a side hustle falls in their lap. Maybe you’re good at creating videos, maybe people rely on you to watch their pets, maybe you’re good at tutoring and have a few people you work with regularly. You decide you should charge money for that and boom! You’ve got a side hustle. But why are you looking to turn it into an actual business? Pocket change is one thing, expecting to make recurring income is different. There are any number of goals you could choose, but the goal you should choose needs to be S.M.A.R.T. Before we get into that though, you need to determine your real reason for wanting to take your side hustle seriously:
- Are you looking to raise cash for some reason? Is there a specific goal? Short or long term, it’s something to plan for.
- Would having a specific number of clients or followers turn your business into a moneymaker? Then building that client base is the goal.
- Are there skills you can only develop through real hands-on experience, and that would help grow in your career? Or take your side hustle to the next step? Make a list of those skills and where you could explore them.
- Do you have a hunch for a new service and need to test it out in the market? Do you know what market would be right for testing? Do some thinking.
Any one of the above or others can be your start, but the key is to come up with a goal that you can define clearly, set an end goal, and some steps along the way to show progress. In fact, most people understand their goal, but haven’t ever really said it out loud. Then they start work on “going pro” but don’t have any real direction. Sure, a business plan is important, but when you’re just starting and it’s not your full-time job, creating a 5-year plan, full-blown competitive analysis, marketing strategy and the lot is overwhelming for most. Instead, start small. Define your primary goal for this side hustle, and then let that goal guide your steps for growth and measuring progress/success towards that initial goal. It’s an organic way to create a direction until you’re ready to go bigger with a longer-term plan.
Cash is the thing
Cash goals. We’ve all got them, whether we like to admit it or not. Whether it’s an amount you need to pay off credit cards or a student loan, saving up money for a first and last month’s rent, or a deposit on a new house/condo. Or maybe you need seed money to get your real life’s dream started. Maybe you’re saving up to purchase some new equipment or saving for a lifetime event. It may even just be having enough money to pay for groceries, rent, and gas. Whatever your cash goal is, if it’s something you can define as far as how much you need (don’t say a million dollars!), and a deadline that you need the money by (tomorrow doesn’t work), it can be your starter goal.
Set up a spreadsheet, get out a piece of paper, or create a vision board, but get that cash goal out there and be realistic with it. You’re going to set interim goals along the way, but this goal is one you need to stick to and focus on as an End Result. Not THE End Result, but your initial end goal.
Next, set up some interim goals to show you’re making progress:
Saving to payoff credit cards? Maybe choose your lowest balance one and set up the amount needed to pay off that card as an interim goal. You’ll focus on that one card and then move to the next, etc. I’m not saying that’s the way to set a credit card goal, just saying it’s one way to do it. Maybe you decide to pay down all cards to 30% drawn and that’s the goal, but you’ve got to start with one goal for focus. Then move to the next, and on and on until you hit that End Goal.
Saving for a wedding? Break it down into steps. Maybe save for a wedding venue, then the caterer, then entertainment.
Saving for fertility treatments? Are there initial deposits required? Are there specific processes that you’ll have to pay for that aren’t included in insurance? According to VeryWellFamily, there are several steps you can take to determine cash needed. But do your research and plan with steps along the way.
How Many Clients Do I Need?
When you’re just starting out, you may be doing services for free. It’s just friends, right? But when you start to think about making money that can make a difference in your life and move you towards your End Goal it’s time to consider how many clients you’ll need, and how to get them! Referrals are great in the beginning, but advertising, word-of-mouth, events, distribution, there are a lot of things at play. Still wondering where those clients will come from? Read Step 3 - Getting Customers.
Looking to build a client base? How many do you want in total (not forever but say in the next 12 months). Then divide that number by 12 and set an interim goal for each month. If your business lives off referrals, maybe set the interim goals in the first month or two lower, and then ramp them up as you go.
Passion for Business offers a great overview on how to calculate how many clients you need to make your business successful. It really depends on how much money you want, how much you charge for services, and how much time you can give to your side hustle.
Give some thought to how these clients will find you. Maybe you have a goal/month for how many, but you have sub goals that include events, connections, and referrals, too. Make a note of conferences or conventions where you can talk up your service (don’t jump into this level if you don’t have the cash, but perhaps this pushes you back to that Cash goal setting step.).
I have so much to learn! Building skills.
Yes, sometimes before we can charge for what we’re doing, we need some certifications, hands on experience or training in the use of equipment, software, etc. Or maybe to get that promotion at work, or move on to your life’s dream job, you need some skills you’re not getting to exercise in a normal day. If that’s the case, set yourself a goal to acquire those skills. Need money to do/get those? Then you’re moving back up to the cash goal. Funny how it seems to rear its ugly head when you least expect it?
Check with your competitors (or future competitors) to see what kind of skills they have. Are they pros with specific software? Certified in some type of equipment or service? In order to sell your product, would a license be required and that requires certification? If you’re pet sitting it may not REQUIRE anything beyond a love of animals and a schedule that allows that, but if you’re competing with others, would training certification make your more desirable? You may be managing social media for local businesses, but if you had certification in digital/social would you be more likely to be hired?
Make a list of the skills you need to develop and set a plan for them. Again, it usually costs money to do this, so you may also be setting a cash goal. Maybe that cash goal thing is the first step, THEN the skills building goal.
Testing the Market
Sometimes we have a hunch. It just happened to me the other day. I was chatting with a coworker about a platform I was hoping to find, and we suddenly realized, if there ISN’T a platform like that, we should create one to sell! Yeah, great idea, but neither of us is in a position or has the skills to create something like that. But you might! So, you’ll either need to build the product or service to test market it or do some surveying of potential clients to see if there is a need/want for what you’re proposing to sell. This can be tricky, because in the interim someone else could beat you to it, but you don’t want to invest a lot of cash not knowing whether anyone would even be interested in what you’re doing. Decide how you’d want to test the market, and then set yourself some goals.
- Test Market Your Skills/Products Goals
- Survey potential clients. This can be as easy as asking the people you’re currently working with whether they’d be interested. If you get enough bites, you may feel confident that they’d buy. Can you get a commitment from them on it?
- Attend a few conferences or conventions and see what others are doing. Is your idea already out there in some form? How is it selling? Would yours be different?
- Create small batch offerings and do a pop-up shop to see what the interest is.
There are so many ways to test a product or service, but in most cases, it requires some investment on your part. Again, back to a cash goal. But you can still create a calendar for your market testing and set goals for “yes” or “no” so you know at the end whether you’ve got a viable idea.
Cash for the plan
As mentioned above, in pretty much every instance, there may be cash needed to undertake this initial goal plan. Seed money is a thing and can be hard to come by if you don’t already have savings. And if you’re just starting out with a side hustle, you may not have any savings. So, what can you do? Consider a
When you need cash, but don’t want to use a credit card, a personal loan may be the way to go.
Personal loans are “unsecured” meaning no collateral is required, as would be the case with a car loan or a home loan. They offer a low fixed rate with a variety of terms depending on the amount borrowed and purpose of the loan.
Plus, setting up automatic loan payments automatically qualifies you to receive APR discounts**
- Amounts between $500 - $25,000
- No processing or service fees and no pre-payment penalty
Poor Credit or No Credit? A Share Secured Personal Loan Can Help!
Share Secured Loans allow you to borrow against your own money. You pledge1 funds in your savings account or share certificate account as collateral. You’ll still earn dividends on your full balance as allowed by the account..
- Borrow between $500 and total balance of funds given as collateral.
- Payments are made monthly
- Funds held as collateral are released to you when the loan is paid.
1Pledging funds means you may not withdraw the pre-specified amount until your loan is repaid in full. In some cases, the Credit Union may agree to release all or part of the pledged amount before it is fully repaid.
Don't Qualify for a Loan on Your Own?
Co-Applicant/Co-Guarantor Loans are your answer. Whether you have bad credit, low credit, or no credit, getting another person to sign on the loan with you can help. Loan decisions are made based on their creditworthiness.
- Borrow between $500 and $25,000
- No processing fees, service fees or pre-payment penalty
- Payments are made monthly
Looking to Start Building Your Own Credit or Improving Your Score?
A Credit Builder Loan can you get started on the road to building or improving your credit.
- Borrow between $500 and $1,000
- Funds borrowed are placed into a savings account to earn dividends
- Make regular, on-time payments towards the loan
- When it's paid in full, the funds are released to you
It’s a structured savings plan that teaches good savings habits while also helping you build/improve your credit. Credit Builder Loans do not qualify for Smart Money Rewards.* Borrowed funds are placed in a Savings account to earn interest. You may not withdraw the pre-specified amount until your loan is paid in full. You'll repay the loan balance plus interest. A Credit Builder Loan must be paid in full before another loan is extended
*APR = Annual Percentage Rate. Rate disclosed is based on a highly qualified credit candidate. Rates may vary based on individual creditworthiness. Rates are valid as of July 1, 2021 and are subject to change without notice.
**Automatic loan payments qualifies you for a 0.25% APR reduction, with the exception of the Tuition Assistance Loan. All Personal, Student, Auto, Motorcycle, Trailer, Boat, and RV loans are eligible for an ANNUAL PERCENTAGE RATE reduction of 0.25%.
MIT FCU does not charge for the autopay service.
Discontinuing autopay will result in the loss of promotional 0.25% ANNUAL PERCENTAGE RATE reduction. Any increase in the ANNUAL PERCENTAGE RATE will result in an increase of remaining payments. For example, if Your loan was for $10,000 at 6.4% for 5 years, and the rate increased by 0.25% after 12 months, Your payment would increase by $0.95.
For the life of the loan this offer will never expire. However, the promotion may end at anytime and without notice.
^The fee/s for the payment of each overdraft: $25 Negative Balance fee. If multiple items are presented against your account on the same day, each item will be assessed a Negative Balance fee.to get you started. MIT Federal Credit Union does offer personal loans from $500 - $25,000.
But if you’re looking to save the cash up rather than borrow, as outlined in the beginning of this post, set a goal and the steps to get there so you can monitor progress.
SMART Goals are smart
Familiar with Peter Drucker and his SMART goals? Most people who’ve taken a business class are, and a lot of other people are as well. Why? Because they’re smart! The Balance outlines Peter Drucker’s SMART goals criteria:
The above 5 criteria are included in this post and will keep you on track as you move through your plan, offering direction, priority, measurement of success, and a sense of accomplishment. They can also be used to determine whether your plan, and your side hustle, are going to work. If you set yourself a goal of making $XXX dollars within a timeframe and you aren’t making steps towards that end, why? Is your goal not achievable? Is the time set not realistic? And once you’ve achieved your goal, it’s time to set new goals for additional growth, expansion or a new project/side hustle entirely. Or if you are nowhere near your goal, maybe the plan isn’t the right one for you and it’s time to redirect or move on.
Having a side hustle can be a lucky coincidence, or a purpose-built business to help you achieve your goals. Not sure whether your passion or hobby is enough to create a side hustle? The original post about why a side hustle could be an option, and Step #1 – What Do I Enjoy, might help you decide.
Our next step, Assessing Your Business Needs puts a lot of the above pieces in sharper focus and might help you decide where goals need to start. It will help you avoid putting the cart before the horse so to speak.
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