More than 35% of the U.S. workforce are now freelancers or contractors and that number is projected to rise to 43% by 2020. About 44 million people report having some kind of side hustle, and of those who do, 36% say they earn more than $500 a month from it.
Entrepreneurship, even in the form of part-time work to complement a traditional day job, can provide a useful hedge against economic uncertainty and a way to develop new skills.
But the sticking point for many is figuring out what your side venture should be. This is especially true if you have a variety of interests or consider yourself a generalist.
How do you know what to focus on? How do you assess your expertise? And what are the first steps you should take once you think you’ve found the right idea? Here are five strategies to keep in mind.
Don’t fall in love with your first idea. Bozi Dar, a life sciences executive I profile in my new book Entrepreneurial You, had what he thought was a brilliant idea for a side project: an app that helped people change their mood by looking at their personal photos paired with music.
Unfortunately, it never took off.
The reason it failed, he’s convinced, is that he “started my app not really testing whether there is a problem [that customers wanted solved], not testing what is my audience, not testing whether anyone was even searching for a solution. I just fell in love with my idea, starting putting money and time into it, and it never worked.”
Don’t just come up with a clever notion; make sure people actually want it before you spend a lot of money developing it.
Understand what you’re uniquely qualified to share. After his initial failure, Dar was hesitant to try again. But he realized he could dramatically improve his outcome if, instead of imagining what his audience wanted, he listened to what they were already asking for.
At his day job, things were going very well, and he was getting promoted frequently. His friends and colleagues noticed, and he found himself “being invited for these coffee/mentoring sessions nonstop.” Dar realized others found his perspective valuable, and perhaps an audience might pay for it.
He was right: His online course about how to win promotions earned him an extra $106,000 — on top of his day job salary — in its first full year.
Don’t rush to quit your job. Some people get so excited about their new entrepreneurial venture that they want to go all in immediately and quit their day job. Dar disagrees. He recommends staying in your job for at least a year, if not more. “I would rather stay in the company and start testing your hypothesis [about your business model],” he says. “What’s the problem? Are people searching for the solution? Who is the customer?….
I’d try to get answers to those questions before I left the job, and the ultimate test [of the idea’s viability] would be that someone opens their wallet to pay for what I’m offering.”
Invest in skill building. A lot of people who are employed by companies, even if they’re very talented, may not be fully ready for entrepreneurship in the beginning. That’s why Dar suggests making a concerted effort — while you’re still in your job — to build out your entrepreneurial skill set.
That was my strategy as well. I decided to launch my own business in 2005, but stayed in my job for an additional year, while taking professional development classes — that my employer paid for — on topics I knew I’d need to learn, such as financial management, design, and business strategy.
Dar recommends that you use this period to learn “foundational skills,” such as sales, presentations, persuasion, copywriting, and more. “Buying courses, joining a mastermind group, and having a business coach will all help,” he says.
Focus on one channel at a time. Finally, when you’re ready to launch, you can easily get overwhelmed with all the things you could be doing. Instead, Dar suggests, master one channel at a time so that you get really good at it, and then you can build from there.
In his case, he has one course (on getting promoted faster); he markets it through one channel (webinars); and he identifies webinar opportunities through one mechanism (affiliate partnerships).
That focus “is the only way that you can build a solid base and then conquer other traffic channels or other products,” he says. Facebook ads or search engine marketing might be appealing possibilities, but for now, they’re too much. It’s better to excel in one area and then bridge from there.
A growing number of professionals are embracing entrepreneurial opportunities, whether full- or part-time. To do so, you don’t need to raise venture capital or come up with a Silicon Valley–style “world-changing” idea.
Often, the best starting point is simply thinking about what your friends and colleagues already come to you for, and being willing to experiment and iterate — because it’s rare for any entrepreneur to get their idea exactly right the first time.