With many of us spending more time at home, we might be looking for ways to generate an additional stream of income. Discover how to kick start your freelancing career with this practical guide to starting a side hustle.
The phrase ‘side hustle’ has been a buzz word splashed across blogs and headlines in recent years. And with good reason. Recent data from Finder has revealed that those with a side hustler are earning an average of $7,300 per year from their side income alone (as reported by Money Magazine). Plus, with 80% of Australians turning to their side hustle to find fulfillment outside of their 9-5 job, it’s no wonder the gig economy is continuing to rise in popularity worldwide.
Right now, we’re all facing a one-in-one-hundred year event: a global pandemic. With workplaces shifting their operations entirely online and many Australians facing a reduction (or loss) of their main source of income, finding ways to bolster and safeguard our wealth is at the top of everyone’s to-do list.
With the Internet at our fingertips and the majority of us stuck at home for the foreseeable future, now could be the perfect time to finally kick-start that big idea you’ve been talking about. Whether you’re on the hunt for additional work as a freelancer or want to finally launch your side hustle, discover the practical steps you need to take to turn your dreams into a reality.
Understand the commitment a side hustle requires
As with starting any business, a side hustle still requires a considerable amount of time and energy in order to become a successful source of additional income. Particularly for those balancing a side hustle or freelancing alongside a full-time role, it’s important to be realistic about your time and capacity from the beginning.
In the early stages of launching a side hustle, learning to be comfortable with ‘the juggle’ is incredibly important. This means dedicating a good chunk of time after work hours and on weekends to building your business, fostering new leads and producing work for your side hustle. To help manage your time, try using free online project management tools such as Trello or Asana to manage your to-do list and use your calendar to block out time to work through important tasks.
It’s also wise to understand the financial commitment required to launch a side hustle. You should never go into debt to kick-start a freelancing career or side project, so make sure to have a healthy savings balance first to fund any initial start-up costs that may arise. Realistically, you’ll need to be able to cover the costs of set-up (which can take up to 12 months) from your savings, so make sure you’ve budged for the ahead of time.
Where to get an ABN and how to trade mark your business
To help keep track of your side hustle transactions (and to reduce the headaches of tax time), it’s a wise idea to register for an Australian Business Number (ABN). Although this is compulsory for businesses with a GST turnover of $75,000 or more, it’s a good idea to set this up from the beginning to avoid additional paperwork down the track. To apply for an ABN, simply fill out this online application from the Australian Business Register website here.
As well as this, applying for a trade mark enables you to distinguish your offering (such as goods and services) from other businesses. There are a number of types of trade marks you can apply for depending on the type of business you’re building. To find more about the basics of trade markets, the benefits of having a trade mark and to start the application process, click here.
Plus, it’s a wise idea to register your business name with IP Australia as soon as possible (as it can take up to 4 months to approve). Be sure to get this process started early to ensure no one else snaps up your name! Find out more here.
How and when to register for GST
When launching your side hustle, it’s important to understand how and when to register for GST (the Goods and Services Tax). Essentially, it all relates to how much income your side hustle is generating.
You must be registered for GST if:
- Your business has a GST turnover (gross income minus GST of $75,000 or more
- If you expect your new business to reach the GST threshold within the first year of operation
- If you’re already in business and have reached the GST threshold
- When you’re providing taxi or limousine travel for passengers (including ride-sourcing) regardless of GST turnover
- If you are planning to claim fuel tax credits for your business or enterprise
To find out more about and to register for GST, visit the ATO’s website here.
Create business accounts for your side hustle
Want to help your future self as a freelancer or side hustler? Make sure to open up separate transaction accounts specifically for your side hustle or freelancing business. Why? Because this will make reconciling and assessing your gross revenue much easier and will streamline your records to keep your personal and professional transactions separate. Plus, this will come in handy when tax time rolls around as you’ll have a specific bank account dedicated to any business income and expenses.
Track your business financials using accounting software
Once you’ve started generating an income from your side hustle, it can be easy to lose track of invoices and payments from various customers and clients. To save you time and energy, consider investing in online accounting software such as Xero or MYOB. These digital platforms are designed specifically for small businesses and help keep you to keep track of bills, create invoices, manage your cashflow in real-time and so much more.
Create channels to market your side hustle
Aside from all the administrative tasks of setting up a side hustle, another key part of starting a successful side income is to ensure you’re showcasing your work with potential clients and customers. Two practical steps you can take to do so is to launch a website (that can act as a digital portfolio or marketplace for your goods and services) as well as create a social media presence (to build brand awareness and engage with past and potential customers).
To launch a website for your side hustle, a number of online website building platforms exist including WordPress, Wix, Shopify and Squarespace. Take your time to research these options and consider which platform might be the best fit for launching your businesses’ website.
As well as this, it’s a smart idea to create social media channels (such an Instagram profile, Facebook and LinkedIn pages) to market your new business. These free marketing channels are a great way to show your goods and services in action and to share regular updates with your customers about new product launches, new services and more.