Want to learn how to start a side business? Then this guide is for you.

You’ll learn exactly how to set up your own side business in eight steps.

Ready to dive in?

Let’s go!

You’ll learn:

• What a side business is
• How to start a side business while employed
• The eight steps to start your side business
• The best side hustle ideas with low investment

What is a side business?

A “side hustle” is a way to make extra money alongside your main job. But there’s more to it than that.

Starting a side business is a low-risk way to:

• Test out different business ideas
• Learn new skills
• Lay the foundation to become your own boss

In fact, the U.S. side hustle market is currently valued at over $2.58 trillion.

And a Bankrate survey revealed that 39% of Americans have a side hustle.

Ready to learn how you can start a business while you’re still working? Let’s get into it.

How do you start a business while employed?

Before we go over the steps to set up your side business, let’s first answer two common questions:

• Are you allowed to start a side business?
• How do you juggle a side hustle with your current job?

Let’s take a closer look.

Can you start a side business?

First things first:

Can you start a side business while being employed?

YES!

But there are a few things to consider…

For starters, check your current contract for these agreements:

• Nondisclosure agreement (NDA): This means you agree not to share any confidential info from your job. For instance, if you’re working at a tech company on a new software tool, you can’t share how this tool is developed with anyone outside the company.
• Non-compete: This stops you from starting a business or working in a similar industry as your employer. Let’s say you’re working for a restaurant chain. One rule could be you can’t start your own food business nearby. Another rule could be you have to wait a certain time after you leave before starting any food service business.
• Exclusivity: Sometimes, your job wants all your professional focus. This means you can’t work on anything else, including a side business, without their okay.

Even if you don’t have any of these agreements, be picky about when you work on your side business.

Generally, anything you do on your own time is fair game.

But using company resources or working on your side hustle during work hours is a no-go.

For example, when I started, I worked in digital advertising.

This was also the focus of my first side business.

But while my day job targeted big corporations, my side hustle was designed to help small business owners.

So, although the field of work was the same, we had completely different audiences.

This means there was no conflict because I wasn’t poaching possible clients from my employer. (And I didn’t have a non-compete or similar clause in my employment contract.)

Plus, I worked on my side business during lunch breaks, after work, and on weekends — never during work hours.

Knowing how to juggle both is so important.

Let’s explore that question next.

How do you juggle a side business and a full-time job?

Starting a side business while you’re still employed is a smart move — especially if you want to quit your 9-5.

Here’s why:

A side hustle lets you work on your business without financial stress. 

This strategic approach lets you:

• Build your business
• Invest in resources
• Gain clients gradually

That’s why I always recommend my students to set up their business BEFORE they leave their 9-5.

By keeping your regular job, you can invest more money in your side business.

But, of course, this also means you have less time.

How do you deal with that?

Be strategic with your time.

When I started, I could only dedicate about 5 to 10 hours a week to my business because I had such a demanding job.

Here’s how I made it work:

Instead of cutting sleep or trying to wake up earlier, I figured out how to make the most of the limited time I did have.

I researched what would move my business forward. And I focused on those exact things.

And no, that doesn’t involve making a website or developing new product ideas.

Instead, I spent the majority of my time on getting clients.

This way, I made significant progress — even with limited time.

In this video, I delve deeper into how to manage your time wisely:

However, building a business is far from easy.

You need to be ready to sacrifice certain things like free time and quick money — at least in the very beginning.

That said, building a business is also much more achievable than it at first seems.

As long as you have the right strategy…

Let’s look at the steps.

How to start a side business in 8 steps

OK, let’s look at how to start a side business.

To set up your side business, you need to follow eight key steps.

Let’s take a closer look at each one.

1. Find a side business idea

Step number one is finding your side business idea.

First, some good news: You don’t need to come up with a revolutionizing idea like a new social media app.

Here are two tips to help you find a great business idea:

• Choose a business you can start right away
• Pick a business model with a high profit margin

When you’re juggling a full-time job and a side hustle, you want to make things as easy as possible for yourself.

A business you can start right now lets you get going quickly.

And a high-profit margin means you only need a few sales to make a good income.

Plus, you earn more in less time.

A business model that fulfills both criteria is a coaching, consulting, or freelance business.

You see, this type of business lets you use your existing skills without having to invest a lot into your business. They’re also high-value services, so you can increase your revenue relatively fast. 

Compare that to a business model like selling physical products. Then, you need to develop a product, buy inventory, and sell far more products to make the same type of revenue. 

But not sure what skills you can use to coach, consult, or freelance?

Reflect on your skills and what people often ask for your help with. That’s a great starting point for finding your niche.

Some examples are:

• Personal coaching
• Freelance writing
• Web design
• Selling crafts
• Virtual assistant
• Social media consulting
• Meal planning services
• And so on

Finding your business idea is the beginning.

You also need to make sure your idea is going to work out.

That’s what we’re looking at in the next step.

2. Validate your business idea

Once you’ve got your idea, you need to figure out if there’s a need for it.

In other words: Are people willing to pay for your product/idea/service?

That’s where market research comes in.

Market research helps you future-proof your business.

It lets you understand:

• Who your audience is
• What they struggle with
• How you can help them
• How your idea fits into the market

Ask yourself: Is there room for your product/service? What makes it stand out?

Here’s the thing:

You can’t fully understand your industry or potential clients just by reading reviews or testimonials.

You need to get out there and talk to people directly.

If you don’t, all the following steps are less effective.

And market research doesn’t have to be difficult; hold short “interviews” where you ask people about potential clients’ wants and needs. 

You can find people to interview in your network, on social platforms, and online forums and groups. Read more about market research here. 

Next, let’s look at how to set goals for your side business. 

3. Set goals

With the right business goals, you can:

• Track your progress
• See if you need to adjust your plans
• Move forward without feeling overwhelmed by aiming too high, too soon

To achieve real results, you have to know what you want and how to get there.

After all, if you don’t have a clear target, how can you know you’re going in the right direction?

Not all goals are created equal, though.

They should be realistic AND achievable.

You can work with long-term, short-term, monthly, or even weekly goals.

But every goal needs to bring you closer to the final result you want.

Let’s say you want to make $100,000 per year.

That’s a big goal and won’t happen all at once.

But if you break it down into smaller milestones and stick to a plan, it becomes much more doable. 

Hitting a smaller milestone makes the big goal seem possible. It takes you one step closer and makes you believe you can do it.

At the same time, always keep the big goal in mind and adjust your smaller milestones along the way.

The big goal reminds you of the value of your actions. It keeps you from getting distracted and helps you stay on track.

Here’s an example:

Let’s say you start a coaching business as your side hustle. 

Your big goal might be to quit your day job and live a life of freedom.

But in the beginning, a smaller goal could be to get your first five clients.

This goal is specific and achievable, and hitting it proves to yourself that you can do it.

However, as you grow, simply adding more clients might not be enough.

Instead, you could scale your business by:

• Hiring a virtual assistant
• Offering group coaching sessions
• Creating an online course

These steps let you help more clients while also freeing up time. So, they move you closer to your big goal of living a life of freedom.

4. Keep track of your finances 

If you want your side hustle to pay off, you need to know where your money’s going.

Track your income and costs. And keep your business and personal cash separate by opening a new bank account. (More on that in step five.)

There are a few other important metrics you should track:

• New leads: How many new people are interested in your services or products? And how do they find you? Keep an eye on this every week, month, and quarter. If the numbers are low, it’s time for some more market research to reach your target audience better.
• Sales enquiries: If you run a business like a coaching or consulting business, aim for a 100:2 ratio. Out of 100 new leads, at least two should ask for a sales meeting.
• Sales: Close at least 1 deal for every 6 to 10 sales calls you make.
• Profit: This is your income — the money you have left after covering all your costs and taxes.

These metrics help you focus on what’s working and fix what’s not.

In this video, I share more about the key metrics for your business:

Once you’ve got your finances sorted, it’s time for step five — making your side hustle official.

5. Set up your business, bank account and insurance

To make things easier for you, I’ve created this comprehensive checklist with everything you need to set up your business the right way.

But in short, here are three of the most important steps:

• Business structure: Decide on a business structure. Sole proprietorships and limited liability companies (LLCs) are common options for new entrepreneurs. A sole proprietorship is easy to set up with hardly any paperwork. An LLC requires more effort and money but offers benefits like legal protection and potential tax advantages.
• Registration: Registering a business sounds like a chore, but it’s sometimes as easy as letting your local or state government know your business name. Plus, if you run a business as yourself and use your own name, you often don’t need to register at all. However, not registering means you lose out on personal liability protection, legal benefits, and tax benefits.
• Licenses and certifications: Before you sell your services or products, check if you need any official licenses. The good news? Many online businesses can skip this step. But if you’re in fields like medicine, law, or accounting, you’ll most likely need one. Even if you think you’re in the clear, always check for any local requirements, like a home business license, an occupation permit, or a DBA (“doing business as”).

With your business all set, it’s time to get your first clients/customers.

6. Get your first client

My advice for getting clients and customers, especially as you’re building your business on the side: 

Focus on one client/customer at a time.

Don’t sabotage yourself by stressing over having too little or no clients.

Instead do the following:

With the right market research, you’ll know exactly where your target audience is hanging out.

Be there too — and consistently offer them value.

You could join online platforms like Reddit or Instagram and talk to your audience. Answer their questions and offer clear insights or solutions.

That’s how you build trust.

And when you’re just starting, building trust is a top priority.

Nobody knows you yet.

So, you have to show them that investing in your service or product is a good idea.

This approach works whether you’re offering a service or selling a product.

Once you’ve worked with your first few clients or made your first sales, you’ll have testimonials and reviews you can share with others.

These are gold for attracting more business.

That’s thanks to a concept called social proof.

Suddenly, you’re not just a random, unknown business anymore — you’re a business with proven results.

And people who were just looking from the sidelines will now feel more ready to start working with you or buying from you.

Want the best client acquisition strategies? Take a look at my short video here: 

7. Focus on the right things

It’s easy to get caught up in tasks that don’t move the needle.

And that’s the #1 thing that will keep you from growing your side business. 

Here are some common traps:

• Creating a beautiful website with no traffic
• Writing loads of articles without any plan to promote them
• Creating a fancy email funnel that nobody reads

How do I know these are examples of focusing on the wrong things?

Because I made the same mistakes when I first started… (Luckily, I can now share all this knowledge with you!)

Once I realized my efforts were not getting me results, I turned things around.

In this video, I talk more about shifting to impactful activities:

But in short, this is what I did:

I looked at what I could do right then to achieve the goal I actually wanted — getting clients.

Here, once again, market research is so important.

It shows how to reach your target audience in the best way.

Focus your efforts on these key activities.

Pareto’s principle makes this clearer. It’s also called the 80/20 rule, and it suggests that 80% of your results come from 20% of your efforts.

Figure out what those actions are, and put your energy into them.

Another important aspect is your mindset.

Are you focusing on the progress you HAVE made? Or rather on what you have NOT (yet) achieved?

This makes a big difference.

If you dwell on what you haven’t achieved yet, you’re always disappointed.

But looking at your progress motivates you to keep going.

For example, if you get your first sales call in a month, then that’s one more than you’ve had before. 

However, while all progress counts, it doesn’t always mean you’re ready to leave your day job just yet.

Let’s explore how to make that big decision next.

8. Know when to quit your job

OK, you got everything in place.

Now, all that’s left to do is quit your current job, right?

Well, not really… At least not yet.

Simply quitting your job isn’t the solution.

You need to do it at the right time.

To create a life of freedom, you need the right strategy.

And by knowing when to quit your job, you avoid a common mistake many new entrepreneurs make:

They feel inspired by their ideas and think that determination alone will be enough.

Determination is important, but it’s not the whole picture. That’s why so many entrepreneurs end up returning to their old jobs.

Let’s help you avoid that mistake.

How?

By setting up a strategy so that when you leave your job, you NEVER have to go back.

So, when is the right time to quit?

When you have AT LEAST one of the “321 rules” in place:

• 3: Have at least three months of consistent sales in your business
• 2: 2X your current salary to cover unexpected costs AND the employee benefits you lose by quitting your job
• 1: Have a financial safety net of a year’s living expenses

With these rules, you’re better prepared to deal with the uncertainties that come with being an entrepreneur. 

This means your chances of becoming a successful full-time business owner are much higher.

In this video, I discuss the “321 rule” in-depth. Plus, I share exactly what you need to do before you quit:

Ready to leave your current job?

Then always leave professionally. Hand in your notice on time and don’t burn bridges.

That’s how to start a side business!

Next, let’s look at the best side hustle ideas with low investment.

The best side hustle ideas with low investment

The best business models demand little upfront investment but have the potential for big returns.

Here are five low-investment side hustle ideas:

Productized service

Productize your knowledge by selling it as a packaged service. With this business model, you offer clients a limited range of options rather than anything they want. 

The good thing is that you can do this, no matter how ordinary your skills may seem to you. Because something that’s easy for you can be extremely valuable to someone else. 

Get started: 

Identify tasks you’re good at and that others need, such as graphic design or social media management. Then, create clear, scalable packages and sell them. Here’s my guide on how to productize coaching packages. 

Done-for-you business

This is all about doing tasks for clients that they don’t have time or skills to do themselves. A DFY business can be anything you’re good at that others need, like setting up websites, managing SEO, or even running entire social media campaigns. 

The appeal here is the “done-for-you” aspect. Clients pay for the convenience of having tasks taken off their hands. Another great benefit is that there’s often recurring demand which means recurring income for you. 

Get started:

Highlight your expertise in a particular area. How will you make your client’s life easier? Gather testimonials or case studies and show how you’ve successfully done these tasks for others.

Content creation

You can make a LOT of money by writing, podcasting, and/or creating videos. For instance, I built a multi-million dollar business and my daily email newsletter was a big part in making it happen. If monetizing a newsletter isn’t your cup of tea, there are many other options. You could ghostwrite, blog, write copy, and so on. 

Get started:

Choose a niche and start creating high-quality content. Use social media and SEO strategies to grow your audience. Platforms like Upwork and Fiverr also make it easy to find clients.

Online courses

Put your knowledge into an online course and sell it. This one’s a little harder because you need several skills: Marketing, teaching, and selling. But an online course can lead to impressive passive income once you’ve put in the work. 

Get started: 

Identify topics you know well and that have a demand. Create your course and market it. Websites like Udemy and Teachable let you easily sell courses worldwide. Read my guide on how to create online courses here. 

Digital products

The beauty of digital products is that you create them once and sell them an unlimited number of times without extra costs. You can sell templates, digital copies of your art, PDF downloads, digital planners, lightroom presets, and so on. 

Get started: 

Think about what tools, templates, or information you could create that solve a specific problem for your target audience. Use online marketplaces like Etsy or Gumroad to sell your products. You can also create your own website. Here are the top digital products to sell.

Each of these side hustle ideas offers the chance to start small and scale up over time.

The key to success lies in:

• Choosing something that aligns with your skills and interests
• Validating your business idea with market research
• Consistently working to grow and improve your offering

What’s next? 

There you have it! You now know exactly how to start a side business.

Side hustles bring in some nice extra income, but they can also be a stepping stone to becoming a full-time entrepreneur.

Of course, there’s much more that goes into being a highly successful business owner.

If you’d like to learn more, then get my FREE PDF on how to grow a successful business. 

I share my proven step-by-step system that teaches you exactly how to turn your skills and experience into your own online business.

Read more:

How to Finally Go from Employee to Entrepreneur

The Top Online Businesses to Start Today

How to Overcome Your Fear of Starting a Business