It was a big decision to invest time in your sideline. The hours and resources you spend must pay off in tangible ways. But are you really sure that what you put in actually produces what you need?
See also: The Side Hustler’s Handbook
The way smart business owners make sure they invest their time and money resources well and actually win on their side business is by measuring the right numbers. Metrics are simply the numbers that show how well the company is doing. The details may be different for a creative contractor than a real estate agent, but overall you see this:
- What you are working on
- How fast you work
- How much sales are coming in
- How many resources do you use on the go?
Their goal is to generate income for you and your business with the least possible investment of resources. In some cases this can mean that the working hours are adjusted to the customer flow. In other cases, it may mean subcontracting the cost and temporarily increasing it to maximize personal productivity. Regardless of your side job, here are the metrics that you should track:
1. Customers or jobs
The number of clients or jobs you take on in your side business directly affects how much money you can make. It’s important to keep track of what you’re juggling so you can be realistic about what to take on next. Also use this metric to track the type of clients you work with, how big or small their projects are, and what type of work they each involve. For example, if you take jobs on Upwork.com, your projects will vary. This kind of up and down, festive or hunger work can be exhausting. However, you have the option of offering set project parameters for specific fees that allow for more predictable work. If you keep track of your jobs for a while, you can see what is most popular with customers. You can then create a package deal that new customers will like.
Keeping track of your time on any job can be a hassle if you’re not used to it. However, this metric has a huge impact on your business vision. If your design time is fully occupied with projects from only three customers, you cannot add more. But what if these three projects don’t generate enough revenue to fund your software, website hosting, and education – and still bring you a profit? Then your business model needs to be adjusted so that you can acquire more customers. Perhaps it is time to outsource help with subcontracting smaller tasks like production changes and spending your precious time doing things that only you can do.
In terms of time tracking, productivity measures how much you get done in a given period of time. For example, if you’re driving for a lift, your productivity metric is how many trips you make per hour over the course of your week. Your productivity rises and falls in different situations. However, if you follow them for a week or two, you can spot patterns. Perhaps you are most productive with short term errands and the least productive when you are picking up people from the airport. You can use this information to plan your ideal location for the day and determine your most productive times.
For freelancers, productivity depends on the times of day, the job you’ve mastered, and the mood you’re in. Remember, everyone has a rhythm, but your goal in tracking this metric is to find the ideal productivity window for you. And of course if you have a team, their productivity needs to be measured as well.
If you’re not tracking how much money your sideline is making each month (revenue), now is the time to do it. An app like QuickBooks allows you to send invoices and keep track of receipts as you sync with your bank account and generate tax reports each year. The goal of tracking revenue is to be clear about how much you are making and to see seasonal patterns. Maybe winter is slower for you than summer. If so, you can put more of your income aside in the summer to replenish your finances in December.
You also want to keep track of top revenue streams. Do the majority of your sales come from a customer? If so, this seems like an easy way to make money. But what if that customer gets into tough times and has to stop their monthly order? Diversifying your sources of income is critical to maintaining the health of your sideline. Look for ways to spread the revenue stream across multiple customers and offers.
Tracking earnings is only part of the financial picture of your sideline. You have to see how much money you are spending to make all that new money. If you invest too much, you will not make a profit (the money that is left over after you subtract your expenses from your income). Spending includes taxes, software, website hosting, advertising, babysitting to save time, subcontracting, and overheads for vehicle maintenance or office equipment.
With metrics like this, you can get a clear picture of how successful your business is now and how you can keep it growing in the future.
A side business doesn’t have to take forever. You can find a gig that is seasonal for extra money and even a little sunshine. Check out these background noises that change with the weather:
- spring comes along with jobs in dog walking, temporary employment at amusement parks, and work for tips at local resorts.
- summer brings life saving, lawn mowing and home sitting while homeowners are on vacation.
- Falling Secondary occupations are tutoring for school beginners and the sale of concessions at sporting events.
- winter Performances include vacation retail jobs, personal shopping, and skiing lessons.
Q: The pandemic hit my career hard. Instead of wallowing in what I lost, I decided to see it as an opportunity to start over with a side business. But are there still gigs that make money?
ON: Mourning a lost career vision is hard. Focusing on what you can be thankful for is the best way to make progress. The nice thing about a side business is that you can try it out and along the way decide if it’s right for you in the long run. In fact, you can try several. Here are a few hustle and bustle that will help people stay ahead of the game during difficult times:
- Creative contracting – If you are familiar with writing copies or designing websites, being a creative contractor can be a sideline. IT, design and marketing skills are suitable for freelance work. You can find a number of online platforms that you can use to inform potential customers. Some freelancers even find that their previous employers can become their clients. While it can be difficult to get into a freelance job, by offering services for lower prices or even testimonials, you can quickly get a list of previous clients that will give you a boost with prospects.
- Affiliate marketing – If you are looking for something that offers residual income, affiliate marketing is a popular option. By promoting products on your website, blog, or social media platform, you make a small profit on every sale. Simply place an ad on your page or write a post promoting the product and post a link to it on Amazon, eBay, or the main product’s website. Then when people click the link and buy, they’ll get a small percentage of the purchase price. With the right search engine optimization, your affiliate page could bring you nice residual income to supplement other endeavors.
- Direct sales – With a wide variety of products and services, the direct selling industry has something for just about everyone. And direct selling is one of the few industries that actually thrived during the pandemic. Many companies are pursuing record numbers. Direct Selling Companies provide stability, mentoring, and back office logistics to small business owners wishing to join an existing organization on their own terms. Over time, a business owner with repetitive assignments can acquire enough customers to generate a nice source of income. Another benefit is the ability to work with a product or service you believe in and build customer relationships based on integrity.
Starting over may feel daunting, but in the age of side business, it’s doable. Find the right gig for you by trying out those that appeal to you but are also open to new experiences. You never know what might pay off.
This article originally appeared in the March / April 2021 issue of SUCCESS magazine.
Photo by Crystalmariesing / Twenty20
Amy Anderson is the former executive editor of SUCCESS magazine, an Emmy award-winning writer and founder of Anderson Content Consulting. She helps experts, coaches, consultants, and entrepreneurs discover their truth, write with confidence, and share their stories so that they can turn their past into hope for others. Learn more at AmyKAnderson.com and on Facebook.