I’m not one to knock someone’s hustle…
However, it seems that some people have become confused about the difference between a business and a hustle. I see some people who have legitimate business but they operate it as if its their hustle while others have a hustle that would swear is a legitimate business.
I’m all about people doing them but I think its important that you know the difference between a business and a hustle.
- Are you legally established?
- Do you have a financial account to keep your business and personal finances separate?
- Does your marketing include resources other than Facebook and Twitter?
- Do you have a written plan (business, financial or marketing)?
- Has your core business operation changed more than five times in the last three years?
By answering these five questions, it should be pretty obvious whether you are operating as a business or a hustle.
Let’s take the first question, it doesn’t matter if you are the only person operating the business or if you have five people helping you. You should have proper documentation for your business which includes a tax identification number and articles of incorporation, if necessary. This leads to number two. Without a legally established business, you can not open a business financial account at a banking institution. You can, however, have an online account if most of your financial transactions are done via the internet with a company like PayPal. I would advise that you still have a separate personal and business account to make managing your business expenses easier, especially when preparing your taxes.
Skipping to the last question, has your core business operation changed more than five times in the past three years… When you create a business, one of the first things you should do is create a plan. This can be a financial plan to anticipate your revenues and expenses for at least the first year, a marketing plan to define you target market, how you will reach them and what you will say or a full-blown business plan which includes the previous elements and additional information about your business operations and human resource policies. By following that plan, you should have a general idea of what your core business will be about. You may change some of the details of the business but if you find that you are always jumping on the next hot thing then you are not setting yourself up for success.
It takes about three years for a business to begin showing signs of success and profitability. You need to have a game plan that outlines how you will finance your business during those early years (working part time/ full time, using credit cards, getting a loan, etc) and a marketing plan that extends beyond free social media sites such as Twitter and Facebook.
Having a side hustle is great if you are using it to make extra money or to make money from a hobby. However, if your intention is to operate a legitimate business that people take seriously then you should make the necessary investments in yourself that will create your foundation for success.
There is no such thing as an overnight success…