These strategies can mean the difference between success and failure.
Recent college grads increasingly build side businesses in addition to whatever full-time job they are able to land. The 2011 Youth Entrepreneurship Study by Buzz Marketing Group and the Young Entrepreneur Council found that 36 percent of respondents, who were between the ages of 16 and 39, had started side businesses in order to bring in more income. Those businesses included freelance work, eBay shops, tutoring, baking and Web design.
People in their 30s, 40s, 50s and beyond are also embracing the trend. When a 2011 survey by MetLife asked respondents what they were doing to increase their income and financial security, 17 percent of Generation X (now in their 30s and 40s) said they freelanced to boost their income, and 12 percent of baby boomers (now in their 50s and 60s) said the same.
The specific financial motivations often differ by age: Twenty-somethings who find themselves underpaid, unemployed, or underemployed tend to want a side gig that allows them to take full advantage of their education and potential. Thirty- and 40-somethings facing stagnant wages want to give their incomes a boost, especially as their household and family responsibilities grow. Forty- and 50-somethings who’ve seen their own incomes and assets fall over the last decade want to rebuild their finances before retirement, and 60-somethings are frequently focused on funding their golden years amid rising costs.
Across all age groups, secondary income streams from side businesses can fill the gap between primary incomes and expenses, and make up for the lack of raises or pay cuts. They also offer a new, affirming identity, as well as the ability to build new skills and make new contacts.
The most successful entrepreneurs, from the baker who launched his own custom cake business to the bookstore manager who decided she’d be better off launching her own coaching business, tend to share nine common traits:
1. They know exactly what motivates them, and it often starts with a big loss or other major event in their lives. Chicagoan Nicole Crimaldi Emerick started Ms. Career Girl (mscareergirl.com), an advice blog for young college grads like herself, as a creative outlet. She squeezed in time for blogging by waking up at 5 a.m. before her office job at an Internet startup. She wrote about what she and her friends were experiencing in the job market: uncertainty, the importance of connections and the rising power of social media.
Then, two and a half years after starting her site, she suddenly got laid off. That’s when she committed to earning a steady income from what had previously been more of a hobby. Soon afterwards, she hosted one of her biggest networking events yet in Chicago, where 80 young women paid $15 to talk about getting ahead today.
A layoff, a new baby, another major life change – successful entrepreneurs can often point to a specific motivating factor, which they return to when the going gets tough.
2. They choose entrepreneurial pursuits that line up with longstanding passions, interests and skills. Entrepreneurs thrive when their business plays off their existing skills, talents and interests – choosing a business that leverages those is the first step to success.
3. They minimize their expenses in both their professional and personal lives, while finding ways to invest in their venture. Many successful small business owners take pains to first pay off debt, shore up an emergency fund and otherwise get their finances in order before launching their venture. That way, they can focus on building it without additional financial stress.
4. They rely heavily on online communities of similarly minded people. Twitter, Facebook and other social media outlets make it easy to connect with like-minded people. Instead of thinking of other people in your field like competitors, embrace them as mentors and friends. They probably have a lot to teach you.
5. They actively and shamelessly promote their brands through social media and other grass-roots marketing efforts. People can’t buy from you if they don’t know what you’re selling. Promote yourself – and your product and service – frequently. Make sure your underlying message helps people or makes their lives easier, to keep your customers coming back for more.
6. They master time management strategies that enable them to maintain full-time jobs along with their side ventures (and the rest of their lives). It’s not easy balancing a full-time job and a new entrepreneurial pursuit, but it is possible. Many entrepreneurs report waking up before the rest of their house, or finding slivers of time throughout their day, or otherwise schedule their lives to carve out at least a few hours a week to continue building their business.
7. They find ways to be resilient in the face of inevitable setbacks. Lack of sales, bad reviews – these kinds of negative experiences are an inevitable part of entrepreneurship. The ones who succeed find the strength to keep going anyway.
8. As their businesses grow, they support other small shops and startups by outsourcing tasks, which further enhances their own businesses, and often find other ways to give back as well. Giving back to the community that helped you build your business not only makes you feel good, but it makes your customers feel good, too, and further enhances your brand.
9. They derive a deep sense of financial security and fulfillment from their businesses, far beyond money. Extra money from a new side business is helpful, of course, but side giggers are even more likely to cite a deep and abiding sense of satisfaction that they get from knowing they are creating useful products or services that help people. That’s what keeps them going.
If you’re ready to launch your own side gig – to save you from financial fear and frustration, to make you more secure and wealthy, and to give you a sense of satisfaction and personal accomplishment beyond what you get from your main source of employment – then consider applying these nine strategies to your own life. You’ll be building the economy of you.