Create a side-income, everyone says. Well if they’re so clever, why don’t they come down and do it? It’s not as if you don’t try. Relax, we know it’s not easy. This really is a trial-and-error process; you need to experiment before you find the thing that works. In the meantime, here are some common mistakes that could be getting in your way:
1. You’re too focused on your skill set
This is the most common reason people fail to create side-income. They have a narrow perspective and believe that any side-income must come from something they are “officially” qualified for. For example, if you are an economics major, you might assume that the only viable side-income jobs for you involve finance or data analytics.
But what if your next door neighbour is willing to pay you $500 a month, just to accompany him on weekends to go paint walls? Remember, side-income is not about your big picture career. It’s a way to make more money, and that’s the primary consideration. If the money comes from slapping paint on a wall, and you really need the cash, go do that.
Take a page from successful business owners: it’s about providing customers with what they need, not about forcing them to buy something you think you’re good at.
Of course, this doesn’t mean you should take on jobs you are totally incapable of doing; if you’re not in shape, please don’t offer to lift washing machines for cash. Rather, it just means you should pick from the available paying jobs you can do, without worrying too much about whether it matches your degree / work experience / skills certificates, etc.
2. Your side-income has no scalability
Some forms of side-income are highly scalable. For example, if your side-income comes from writing books, then all you need is one bestseller is to keep the money rolling in for a long time.
But if your side-income is writing for other people, coding their websites, tutoring their children, etc., then you’ll have a scalability issue. Even if 200 customers turn up right now, you’d still only be able to service two or three of them at a time.
There are ways to overcome this, but unless you are going to turn your side-income into a full-time business, you can’t do them. Instead, you may want to try a whole other idea, which won’t demand so much of your time. Some forms of income are only ever going to be viable as full-time jobs. A good example is many sales-based forms of income, which require you to sell consumer products (it’s rare that you can do this successfully, with just a few hours a week).
As an alternative, you can try raising your price. If you already have all the jobs you can handle, raise your price significantly for the next batch of customers. If they turn you down as a result, it’s not a big loss to you (you already have all the work you can handle). If they do accept it, you’re on your way to earning more.
3. You don’t have the temperament for day trading
If your side-income comes from trading, and you find it’s getting you nowhere, it may be a temperament issue. Plenty of people have Forex accounts that are open for barely a year before they give up (in fact we’d hazard a guess that it’s most people who often attempt it without proper guidance).
Some of us are just not meant to do short, quick trades; it doesn’t fit the way we envision things or plan. We may be in “one step forward, two step back” situations, where we are rash to make up for bad decisions. Or perhaps the stress is making you wander back to your desk, and stare at the chart every 30 minutes (that can get you fired).
It may be time to consider something more passive. Buy and hold strategies may not be sexy, but many people plan a perfectly good retirement fund that way and they’re not the ones who end up in a cold sweat at night.
4. Your side-income consists of only sporadic, one-shot projects
If your side-income is inconsistent, keep looking for new ideas. A $3,000 side project might be awesome when you get it, but not if you have to wait six or seven months for the next opportunity.
One way to overcome this is to try and work on a retainer basis, instead of at an hourly or project rate. Try to set up deals which keep you working for your customer for at least three to six months; this arrangement buys you time to find new customers while working for existing ones, so you smoothly transit from one to another.
As a rule of thumb for products and services, you have successfully found a side-income stream if it earns you at least $500 a month, consistently for six months. Anything less than $500 might be too small to matter (unless it takes zero effort), and anything less consistent than six months might have been a case of luck.
5. You need to consider a partner
You may have a viable side-income source but find you can’t provide the full range of services or products needed.
For example, say you find someone willing to pay you to write scripts for training videos. However, they also need someone who can do storyboards, and you can’t. For that reason, you usually don’t get the job.
What you can do is find someone to partner with. Get an artist who can storyboard, raise your price to include the artist’s fees, and then “bundle” it into your contract. Not all forms of side-income have to be earned alone.
Also, the chances are high that you will eventually have to rope-in help. You may want to consider working as a pair from the very beginning so that a partner can take over affairs when you’re busy at the day job. It can be difficult to take on a second person at the last minute, so plan early.