Do you have a side hustle? Are you thinking of starting a side hustle? Or are you thinking of starting your own business? There are big differences between side hustles and business ownership. It’s important to understand the differences before making any decisions.
In this blog post, we will discuss the key differences between side hustles and business ownership. This way, you can make an informed decision about which is right for you.
What’s a Side Hustle?
A side hustle is a way to make extra money outside of your full-time job. Side hustles are usually freelance or contract work, and they can be anything from pet-sitting to writing articles to selling products online. Fiverr is a popular marketplace for freelancers working to build up their side hustles.
The key difference between a side hustle and a business is that a side hustle is not meant to replace your full-time income. It’s simply a way to make some extra money on the side. With side hustles, you don’t own an asset – you’re simply providing a service or selling a product.
An example of when a side hustle can be effective is when you’re trying to save up for a big purchase. A purchase may be a house or a car. By having a side hustle, you can earn the extra money you need without taking on any debt.
What’s a Business?
A business, on the other hand, is an asset that you own. When you start a business, your goal is to eventually replace your full-time income with the income from your business.
Businesses can be anything from brick-and-mortar stores to online businesses to consulting firms. The key difference between a side hustle and a business is that businesses are meant to generate a full-time income. Side hustles are not, and instead can be seen to supplement your income.
Most businesses fail. Common statistics indicate that about 20% of businesses make it to their fifth anniversary. Only about 50% of businesses make it to their tenth year. This means that there’s a big risk involved in starting a business, but the potential rewards are much higher.
The reason why many businesses fail is that they don’t have a solid business plan or they’re not willing to put in the work. With businesses, there can often be more overhead and costs involved, which is why it’s so important to have a solid plan and be willing to work hard.
If you are looking for business ownership through starting your own operation, make sure to avoid these common mistakes that small businesses make.
Business Ownership vs. Side Hustle
So, which is right for you – a side gig or a business? It depends on your goals and what you’re looking for. If you’re looking to make some extra money on the side, then a side hustle is probably right for you. If you’re looking to own an asset that can generate passive income, then starting a business is the way to go.
Side hustles can still be a great way to increase your bottom line and can help with your personal finances. However, trading time for money will only take you so far. You only have so many hours in the day, and there’s only so much you can do with them.
How to Receive Business Ownership
If you aren’t capable of starting your own small business, you can always look for business opportunities. Buying a small business that’s already up and running is a great way to get started in business ownership. Through sites like Flippa and Empire Flippers, you can find businesses that are for sale in a wide range of industries.
Another option is to invest in a franchise. With a franchise, you’ll have the support of an established brand as you start your business. This is more expensive than starting a business from scratch. However, it can be a great option as you can leverage the brand name to grow your business.
Even buying shares in a publicly-traded company can be a form of business ownership. You’ll own a part of that company, and you’ll receive dividends as the company makes money. Although this type of equity is relatively easy to invest into, you’ll have less control unless you can invest a large sum of money.
Equity crowdfunding is a newer way of investing in businesses. With equity crowdfunding, you can invest small amounts of money into businesses in exchange for equity. This is a great way to get started in business ownership. You can spread your investment across multiple businesses and mitigate your risk.
Benefits of a Side Hustle
A side gig can be a great way to earn some extra money, and it has several benefits. For one, side hustles are relatively low-risk. You’re not investing a lot of money into them, and you’re not quitting your day job. This means that you can try out different side hustles without a lot of financial risks.
Side hustles are also a great way to learn new skills and explore different business ideas. If you’re thinking about starting a business, side hustles can be a great way to test the waters and see if it’s something you’re interested in. This professional venture can also help you develop better skills in your career without risking your current job.
Lastly, side gigs can be a great way to meet new people and network. If you’re looking to eventually start a business, they can help you meet potential customers, partners, and suppliers.
As you can see, although you have to trade time for money, side hustles are not a dead-end grind. It can be a great way to earn some extra money doing what you love, network, and develop yourself as a professional. So, if you’re thinking about starting a side hustle, go for it! Just be sure to manage your expectations and don’t quit your day job just yet.
Side Hustle vs. Business Ownership – Summary
There are many ways to get started in business ownership, and the best way for you will depend on your goals, your skillset, and your financial situation. No matter which route you decide to take, remember that business ownership is an asset that can generate passive income – something that side hustles cannot do.
If you have a skill that the marketplace needs, starting a side hustle can still be a great way to make some extra money. But if you’re looking for asset ownership that can produce income without your added effort, starting a business or even buying into one can be an effective solution.