What It Really Costs To Build a High‑Revenue Side Gig
When it comes to budgeting the startup costs for a side gig, it can be difficult to find a good estimate. The internet is filled with articles noting it can cost as little as a few dollars to more than $1,000 to get your side gig going.
“Most people talk about side hustles like they’re free,” said Andrew Lokenauth, founder of the blog Fluent in Finance. “They’re not. The startup costs are real, even if they’re manageable.”
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If you’re interested in launching a high-revenue side gig, here are the costs experts say you should consider during the first year.
Physical Costs
According to Lokenauth, startup costs can range from $500 to $2,000 in the first year, depending on your niche. Here’s a look at some common expenses for two types of potentially high-revenue side hustles.
1. Content Creator
Decent microphone: $100 to $200
Editing software: $10 to $30 per month
Scheduling or analytics tool: $15 to $50 per month
2. Service-Based Business Operator
LLC formation: $50 to $500, depending on location
Simple website: $150 to $300 per year
Payment processing fees: About 2% to 3% per transaction
Lokenauth noted that these and many other expenses are not optional if you’re serious about building a business.
Time Costs
“The cost most people miss is time, and it’s the biggest one,” Lokenauth said. “A side gig that generates real revenue takes 10-20 hours per week for the first year or two before it pays much.”
At a conservative opportunity cost of $25 per hour, that amounts to a $13,000 to $26,000 annual investment in time alone.
“The side hustles that make it treat the business like a business from day one,” Lokenauth said. “They track income, log expenses, set revenue goals and reinvest profits. The ones that fail stay ‘a hobby.’ I’ve seen both play out, and the difference isn’t talent. It’s structure.”
A Question To Ask Yourself
Annie Cole, EdD, money coach and founder of Money Essentials for Women, said it’s important to decide whether you want a temporary side gig or a sustainable business. The answer can help guide your strategy and budget. For those looking to build a high-revenue side hustle, Cole recommends:
Creating a strong online presence or website
Conducting market research before deciding what products or services to offer
Pricing services appropriately for your market
Developing a strong lead-generation plan
Renewing as many client contracts as possible to encourage repeat business
Building strong project management skills
For those hoping to turn a side gig into a larger business, Cole suggests:
Creating a comprehensive business plan, not just a personal brand
Conducting market research to develop products and services people actively want
Pricing offerings appropriately for the market
Building a strong team
Finding a mentor who can help establish a solid foundation from the start
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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