The idea of starting a side hustle is an appealing one, especially with the favorable business and tax laws that Texas is famous for.
The state of Texas is very business friendly, which means businesses of all sizes are able to benefit in the form of higher earnings potential and little in the way of regulations to impede progress. You’ll find that it’s easy to start your side hustle and build it into a successful business that meets your desire to share a passion and earn money along the way.
Starting your side hustle involves engaging in the creation of a business and using a proven framework to get it operational. It’s easy to get started, pick and form a corporate structure, then sell your goods or services. Here’s a look at how to approach the side hustle and what you need to consider along the way.
Ask Yourself Why You Want to Start a Side Hustle in Texas
A side hustle is a small business venture that requires your time and attention, something that can be scarce due to the demands of life and work. It’s a great way to generate extra money, but it’s also going to make demands of you, no matter how small you want to keep the operation.
In order to create a successful business in addition to your day job, you need to be able to give it your focus, so you can stay consistent and deliver the goods or services.
Turning the concept of selling something on the side into a reality will tap into your free time as you get the hustle up and running. Once you see solid results, you’ll be able to spend less time on the business, but you still have to keep an eye on its operations.
That includes shipping items, keeping track of inventory, handling customer inquiries or complaints, and other administrative duties. These issues apply to every type of business, no matter if you’re selling goods and services or creating content for social media.
If you find that you’re ready and willing to put the time into these and other business-related efforts, you’re more likely to become successful.
Consumers enjoy creating a relationship with producers, regardless of the media, and regular delivery of your goods or services helps to cement that relationship.
Picking a Side Hustle That Makes Sense to You
When it comes to finding a side hustle to focus on, you want one that you’re familiar with and have experience in.
That could be turning your experience with a sport into a blog, a hobby into a small-scale production of goods, or drop shipping products from a content niche (anime, clothing, electronics) through your own ecommerce website.
Your chances of success are higher when you have some command or knowledge of the business niche you want to do on the side.
Take a Look at its Long-Term Potential
Side hustles have the potential to become something big, or they can become a stable source of income that earns a predictable amount every month.
Ask yourself what it is you’re seeking to get out of your business activities.
Do you want to grow the side gig into a full-time business that enables you to quit your job? Or do you prefer to keep your day job and use the side hustle as something that rounds out your income?
Both goals are ones that can be an ongoing concern for years, but you have to be ready to commit the requisite amount of time.
If you want business growth, prepare to spend time and energy on your endeavor in order to find success. In the event you prefer to work part-time at your hustle, plan to spend enough time to keep the business moving forward and income steady.
Taking the Step Toward Forming Your Business
It may seem like a lot of effort to do something as seemingly simple as a side hustle, but this is one of those times that it’s worth doing it right. Not only do you gain protection from liability, you also gain credibility with banks, suppliers, and service providers.
Connecting with these and other entities helps you gain access to services and goods that may not talk to you if you’re a sole proprietor. Not only do you get easier access, you position yourself for growth in the future if you so desire.
Create a Business Plan
Once you’ve decided that you’re willing to put in the effort to make your side hustle a reality, you need to write a business plan that lays out the reason why your business should exist.
The business plan is a road map that guides your formation and operation of the business, and is a document that you can refer to when necessary.
Prepare to make multiple drafts of your plan until you feel it represents your business goals.
Look at the plan as a fluid document in which it can be changed at any time to reflect the current status of the business. That is, if you find that the business has gone in a direction that wasn’t anticipated by the plan, you can alter it to align with where the business is going.
Consider How You’re Going to Fund Your Endeavor
Remember that your side hustle is something you do after your day job, and shouldn’t take a large portion of your income.
Your day job is what pays your bills and makes your life comfortable, which means you shouldn’t devote a large amount of your main income to your side hustle. It’s a given that you need to fund your side hustle, but it’s not something that you should go into debt over.
You have a few options when it comes to funding your hustle. They include setting a savings goal, buying a few pieces of inventory when you have spare cash, or selling personal possessions.
Using a credit card or applying for a business loan are riskier options, but if you feel you have a strong chance of success, they’re worth considering. Once the business is in operation and making sales, focus on paying back the debts as soon as possible to help the business sustain itself.
Forming a Texas Corporation for Your Side Hustle
Texas doesn’t collect personal income tax, which means the profits you realize from your side hustle are subject to taxation at the federal level only.
Starting a business in Texas is advantageous, especially if you want to keep more of your income. The state does charge a franchise tax, and expects businesses to collect sales tax on all sales, but these are easy burdens to bear overall.
Starting any business puts you into the sole proprietorship classification for the purpose of reporting your income and paying taxes at the state and federal level. Filing taxes for a sole proprietorship is straightforward, but the classification isn’t as beneficial as you would think as it doesn’t protect your personal assets.
Forming a limited liability corporation (LLC) or other corporate structure protects you from most liabilities and helps legitimize your side hustle when it comes to opening bank accounts and accessing suppliers.
The LLC gives you legal protection and is known as a pass-through structure for profits.
Your profits from your business pass through directly to you without taxation at the corporate level, and Texas’ lack of personal income tax means you get to keep more of the money you earn above your costs. Federal taxes still have to be paid, of course, but your overall tax liability is much less.
In Conclusion
Have fun with your side hustle, but make sure that you take it seriously, too. The ultimate purpose of this type of business is to earn extra money, and you’re more successful when you treat it like a business.
Consider why you want to do it, what you want to sell, and how you’re going to connect with customers. That helps you create your business plan, how you’re going to fund the startup phase, and fulfill your promise to the customer.
The above tips are intended to help you avoid making mistakes as you work towards making your side hustle a reality. It also shows your customer base that you’re professional, willing, and able to deliver, no matter what your side hustle is about. Getting what you want from your effort is much more likely when you’re prepared to run your endeavor as a business.
