How to make a business plan for your side hustle
COVID-19 has led to a surge in side hustles among entrepreneurs. Here are some tips for how to make a business plan for a new part-time venture.
Many entrepreneurs have seen opportunity in the face of adversity since the start of the COVID-19 pandemic. Nearly 27,000 new companies were registered in Australia in June, the biggest monthly increase for two years, according to ASIC.
Feeling the entrepreneurial itch, too? If you’re considering a side hustle, you need a strategy in place, starting with a strong business plan to help transform your idea into a flourishing enterprise.
A business plan should state the purpose for starting your side gig – what service or product you are offering and what you want to achieve. Think of this as your mission statement, where you clearly explain what specific problem you’re addressing and what makes your business uniquely positioned to solve it. You should include information about who your side hustle will serve - for example, other businesses or consumers?
A good way to start can be summarising what you want to achieve in a single sentence and build from there. Try to include realistic goals for the short and longer term, including your final vision. That might be for your side hustle to provide a regular, supplemental income to your day job within five years. Or it might be to have a world-renowned brand you can sell for millions. This goal can evolve over time, but it can be useful to set one beforehand to help you develop a strategy to get there.
Before starting any new business, it’s essential to know something about the industry you plan to enter. In your business plan you should include information such as whether the industry is well-established with well-known competitors or emerging with new companies. So it can be a good idea to read up on the outlook for the industry and any key trends your business might be able to tap into.
Make a list of your competitors in the market and analyse what they are doing well and what could be improved. This can help identify any gaps which your business could fill. This market research is not only useful as you start and grow your side hustle, but it also shows potential investors or lenders that you’ve done your homework.
Creating a budget might not be the most exciting part of your business plan but it is crucial for any sustainable venture, including side hustles. Your business plan should include a realistic estimate of how much money you might need to get you up and running and where it might come from. For example, it might be self-funded from personal savings, or perhaps you are looking for a loan or investors.
You should explain what upfront costs you expect, such as a website, equipment or purchasing stock, and what your main incomings and outgoings are likely to be as the business develops. Also think about ongoing costs; for example, if you intend to employ staff and how many hours they will work. You should also explain your predicted timeframe for making a profit and how you plan to get there.
You might have the best side hustle idea in the world but chances are it won’t be successful if no-one knows about it. A good business plan needs a strategy explaining who your target audience is and how you can reach it. So, first, you should define your target market in as much detail as possible. If your business sells pasta, who are your potential buyers? A lot of people eat pasta, but perhaps yours is gluten-free, imported from Italy and twice the price of pasta from the supermarket. This instantly narrows down your target audience to, for example, people who are intolerant to gluten and willing to pay a premium for quality pasta.
Next, you should work out how your target audience is going to find your product or service and the best way to communicate your unique selling proposition (USP). This could be through paid advertising, word of mouth, PR or social media. In addition to this, you should have a sales strategy in place which will help you determine how you plan to drive conversions and, ultimately, revenue. For example, through direct sales, via e-commerce, or by distributing your goods through wholesale to a third-party seller.
For many people, a side hustle is their first experience of setting up their own business and writing a business plan. If that’s you, don’t be afraid to ask for support. A business advisor, accountant or fellow industry professionals might be able to offer valuable advice. The Australian Government also offers various resources to help give your business plan legs.
You might want your side gig to make a small amount of money outside your regular job, or maybe you aim to turn it into a full-time career. Whatever the case, a business plan is the essential first step on the path to success – and expert guidance can be invaluable along the way.
This article is a general overview and should be used as a guide only. We recommend that you seek independent professional advice about your specific circumstances before acting.