A consistent theme throughout the beginning of 2022 is that one lesson that COVID has taught us is that in both business and personal lives, we need to learn to pivot.
Surprisingly, many people took COVID as an opportunity to pivot their side hustle to a full-time gig. These individuals quit corporate America and listening to someone else tell them what to do and decided to become their own boss.
Creating a solid foundation for your side hustle and business can effectively elevate your success to the next level.
We have found that there are three initial areas that need to be completed in order to create that solid foundation. The three areas are: Legal, Finances, and Insurance.
The term legal can be a bit vague as it can cover a variety of issues that may arise when starting a business. One of the first issues is having the proper entity structure selected for your business. Whether it be a limited liability company (LLC), corporation, partnership or even sole proprietorship, it is important to choose the entity that offers you the appropriate protection.
Once you choose the entity you need to make sure the entity is properly formed pursuant to the state you are registering the business in. While most states have remarkably similar regulations regarding the registration of your business, each state has their own rules, and you need to make sure that it is done appropriately.
In addition to entity structure, it is also important to get contracts for your vendors/suppliers, any independent contractors you retain and also if you need a customer/client agreement. It is important to have these in place before you actually start providing services or goods to avoid misunderstandings with clients and vendors in the future.
Having contracts in place before offering services and goods helps to reduce your risk.
The other initial area is finance. This includes using appropriate software to keep track of your business’s income and expenses. This can be a specific business accounting software, or it could even be an excel spreadsheet.
Keeping proper track of income and expenses not only helps you to determine the profit your business is making or not making but also helps you to maintain your appropriate legal structure. The other part of finance is understanding how to file your tax returns properly. Elevating your side gig creates new things to consider in regard to your taxes and it is important to understand how to use your taxes to be most advantageous to your business.
Whether you do it yourself or hire a professional, it is important to get your taxes in order when you start your business.
Furthermore, it is important to establish a separate bank account to keep track of your businesses cash and also familiarize yourself with the various financing options available to you to help you fund your business venture. Financial Institutions and other organizations can offer unique benefits to business owners to help fund elevating their side hustle to a main gig.
Finally, there is insurance. While legal can help to reduce your risk of liability, it does not eliminate it. Insurance for your business is assistance to help your business survive instances when third parties pursue your business.
While you may not be personally liable for a claim against your business, your business still may be found responsible for a third-party claim. Insurance policy can help to provide you with necessary cash flow and assistance when a third-party claim is made against your business. It is important that before you begin providing services or goods, that you have an appropriate business insurance.
Whether this is just a general business liability policy or a business liability policy with professional liability coverage, it is essential to get it in place sooner rather than later. While theoretically you can start over with a new business, do you really want to throw away all the challenging work you have put into your business.
While there are many additional areas of business that are also needed to elevate your side gig successfully and effectively to a main gig, these three areas are important first steps. Once you have these three areas accomplished, you can start worrying about the other areas of your business and have peace of mind that you are starting your new main gig off on a solid base.
If you have questions regarding how to successfully and effectively elevate your side hustle , we can help! Set up a time to speak with one of us today.