As side hustles become more popular — and perhaps necessary — let’s take a look at some of the common options … and what you might consider doing instead.
This is coming from years of experience in hosting the award-winning Side Hustle Show podcast, and I should note that ALL the business models listed CAN work, it’s just a matter of finding one that fits your needs and goals.
Many popular side hustles are limited by your own time — i.e. trading hours for dollars. And that’s fine, but I just want you to get the best return on the time you invest.
Before you begin any side hustle, ask yourself what your goals are. Do you want to make an extra:
- $500 a month?
- $5000 a month?
- $50,000 a month?
The path you pursue will depend on where you want that path to ultimately lead. So let’s get into it.
I’ll outline some popular side hustles, and present some alternatives you might consider.
Providing some type of freelance service is a popular side hustle, and one that I often recommend for people who need to make extra money quickly.
It’s seriously a great way to start and something I’ve done myself too.
The limitation with freelancing or consulting of course is that you only have so many hours in the day — which puts a natural cap on your earning potential.
You may also face the challenge of clients hiring YOU (your knowledge/expertise) instead of the RESULT you deliver for them. Your expertise is definitely a good selling point, but can tough to grow out of if you want to expand.
What to Do Instead
If your goal is to build something that grows beyond yourself, consider an agency or matchmaker model from the beginning.
What do I mean by that?
Instead of freelance writing, consider starting a content writing agency. Bring on other people to write the content and focus on getting clients.
This is what my friend Gabe Arnold did in starting Copywriter Today and growing it $20,000 a month.
Instead of doing freelance graphic design, consider starting a design agency. Russ Perry, the founder of the mega popular service Design Pickle admitted to me, “I sucked at design.”
This works even in offline businesses. Chris Schwab built a residential house cleaning business to $60k a month in 2 years–while never doing any cleaning himself.
2. Taking Surveys
Look up any list of ways to make extra money and you’re sure to find some online survey options. (I include them as an option too!)
These are websites and apps like Swagbucks, PrizeRebel, and Springboard America. And while you can definitely make a little money answering surveys and watching videos, I think you’ll find the effective hourly rate to be pretty sad.
Exception: One survey resource I do really like is Respondent, which matches you up with paid consumer research studies online and in-person and often pays $100 an hour or more.
What to Do Instead
Instead of being the person answering the questions, flip the script and become the interviewer. Ask people and business owners what their pains are.
What problems and challenges are they facing? How much is that costing them?
After you’ve done your homework, think of what solution you could offer. How could you help them make that pain go away?
John Logar is an absolute pro at this, and followed this exact method to pre-sell over $120,000 worth of work. It was just from simple conversations and learning about real (expensive) problems.
You can even do this in your own life. I call this the “what sucks?” method of coming up with business ideas.
It’s simple: how it works is you go through your day making mental note of everything that sucks. If it sucks for you, it probably sucks for other people too. Solve that pain, and you’ve got a business idea you can test.
Now don’t get me wrong — I love blogging! The problem is, most people don’t go about it the right way.
(I know because I was that person for my first 5 years as a blogger!)
Here’s why most blogs I see fail as a business:
- They don’t have a clear value proposition (what’s in it for me, the reader?)
- They don’t have a plan in place to generate traffic.
- They don’t have a great revenue model.
What to Do Instead
Instead of a generic personal blog, build a helpful, authoritative resource on one topic.
Consider picking up Donald Miller’s Building a Story Brand. It’s not about blogging specifically but it will help you think through your customer’s journey and how you can help them.
When I come to your site, it should be immediately apparent how you can help me and why I should stick around.
And what’s the goal of the site? Will you monetize with:
- Ad revenue?
- Affiliate products?
- Your own products and services?
Depending on which you choose, that will dictate your calls to action and how you structure your content.
4. Real Estate
Real estate investing is one of the oldest side hustles out there and remains popular today.
But real estate is also super easy to screw up.
It’s (often) expensive to get started and can be slow to diversify. Costly and unforeseen problems–like my friends who are having to re-do their foundation for $90k!–can eat up years worth of your profit all at once.
If you’re dead set on the traditional model of buy-and-hold single family rental properties, by all means, go for it. It can work, and probably works better the more homes you own.
(And if your local market is too expensive, you might check out a site like Roofstock to search income properties elsewhere.)
What to Do Instead
I’ve been burned a bit by that type of direct ownership, but do see the value of real estate as an asset class, so I’ve added it to my portfolio in different ways.
For example, I invest in Real Estate Investment Trusts (both traditionally traded REITSs and “eREITs” like Fundrise). This allows me to earn passive cash flow from a diversified portfolio of properties. And I’ve never had a tenant call in the middle of the night to say their water heater is leaking!
Companies like Fundrise and rival Rich Uncles allow you to spread your risk around to a range of properties in multiple geographical locations–with really low minimum investments. I’m talking $500 or less, compared to the usual 20% down payment on a house.
(If you don’t like the idea of tenants at all, you might consider this interesting “raw land” flipping model, which one guest dubbed “the best passive income model.”)
I also have a portion of my portfolio dedicated to short-term real estate-backed loans on PeerStreet, but that platform is currently open to accredited investors only.
5. Network Marketing
Despite 99%+ failure rates, people are still drawn like flies to network marketing “opportunities.”
You know, the kind of thing where that friend you haven’t heard from in years suddenly wants to sell you essential oils, jewelry, pots and pans, or the latest magic pill.
Now I’m not saying that all “direct sales” companies are scams.
I mean, the failure rates for other business models can be pretty high too.
Heck, I’ve had my share!
Why is Network Marketing Such a Popular Side Hustle?
With the odds of success so low in network marketing, what’s the attraction? What makes every new person who signs on think they’ll be different?
Well, I think there are a few reasons:
- These companies do an excellent job selling the dream (work from home, be your own boss, promote a product you love, etc.)
- It’s a “business in a box”, which is appealing not to have to create something entirely from scratch.
- The commitment, barrier to entry, and startup costs are usually very low.
What Makes it Hard to Succeed?
The biggest challenge with network marketing is just that: your “network.” Unless you have a systematic way to keep that network–that audience of buyers–growing, you’re dead in the water.
And since most people who sign up for these aren’t natural marketers or salespeople, that’s a tough road.
When you eventually tap out your audience of warm contacts, you stall out and give up.
On top of that:
- You’re only making a percentage of each sale, and the product has to be marked up enough to share profit with your upline and the company itself. That can make commodity-type products more expensive and harder to sell.
- Many items are one-off purchases, which means you have no recurring income.
- You’ll risk damaging relationships trying to pitch someone else’s product.
- The demand may diminish for “fad” products.
- You’re married to a specific solution, instead of addressing the larger problem.
That last one comes from advice from Greg Hickman: “fall in love with the problem, NOT the solution.”
What to Do Instead
So what can you do instead of signing up for the latest MLM? I think there a couple options.
Licensing or Franchising
First, if the “business in a box” or “business with training wheels” concept appeals to you, you might consider licensing or franchising.
Yes, your startup costs will be significantly higher, but your success rates will be higher as well. You can speak with other licensees who — unlike in network marketing — have no incentive to tell you how great it is.
For instance, my friend Timika bought a territory for a lice removal device and set up her own clinic. She made some investments in the licence, the physical space, and in marketing, but her business did 6-figures in her first year–on the side from her day job as a school nurse.
Sell Shovels into the Gold Rush
The other idea to consider is that many network marketing companies tap into the “gold rush” mentality. They focus on fads or trending topics like essential oils or CBD oils.
And as a student of history, you know that the best gold rush entrepreneurs weren’t the ones mining for gold–they were the ones selling the shovels. When you see a hot MLM that “everyone” is talking about, what proverbial shovels could you sell into that gold rush?
Another friend of mine did just that when she started an e-commerce business in the essential oil space.
What do you think? Let me know in the comments below!
Want more? Here are 99 side hustle ideas that are sure to get your creative juices flowing.
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Stock Photos from Dean Drobot and Oleg Krugliak / Shutterstock