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How to Start a Side Business or Hustle While Working a Full-Time Job

According to a CareerBuilder poll conducted in 2017, about one-third of all American workers have at least one side gig. This doesn’t surprise me, because I was one of them for several years.

I worked 50 to 60 hours per week as a manager at a national quick-service restaurant chain, making a decent but not particularly satisfying living. I picked up my first few freelance writing gigs to supplement my income, break the monotony of my 10- to 12-hour shifts, and find more meaning in my labor.

Eventually, I was going nearly as hard at the keyboard as I was at the restaurant, and I had an epiphany: I could easily quit the restaurant and do this self-employed writing thing as a full-time job. That’s what I did, and the rest is history.

It took me a long time to get comfortable enough with my writing career to ditch my far more secure restaurant career. Many of my fellow side hustlers cut the lifeline far earlier. Others never do and keep their side hustle on the side. Some turn their side gigs into startup businesses and eventually hire employees.

Whatever your goal, here’s what you need to know to balance your day job and side gig responsibilities and manage the tension that so often arises between the two.

Getting Started: Laying the Groundwork for a Profitable Side Business

If you’re weighing the pros and cons of balancing a side gig, freelancing operation, or startup business idea alongside your day job — or you’ve already started one — these tips will help you balance the demands of both.

1. Review Your Employment Contract

Before doing anything else, carefully review your day job’s employment contract for stipulations that might interfere with freelance or side business work. The most common are:

  • Noncompete Clauses. Noncompete clauses prohibit outside employment or consulting work that could be construed as competing or conflicting with the employer’s business. Noncompete clauses usually cover the employee’s entire term of employment, plus a variable period — often one or two years — after employment ends. The fast-casual restaurant chain I used to work for forbade part-time employees from working for other restaurants in its niche for one year after their employment term ended and imposed even stricter prohibitions on full-time employees at the management level.
  • Exclusivity Clauses. Exclusivity clauses prevent employees from engaging in any outside work — competitive or otherwise — during their term of employment. Unless it can be modified or waived, a strict exclusivity clause is a dealbreaker for any side hustler looking to stay in the good graces of their current employer.
  • Nondisclosure Agreement. Nondisclosure agreements prohibit employees from disclosing non-public information about their employment, employer, employer’s business model, and employer’s intellectual property, such as product schematics. They’re standard fare in employment contracts, particularly in competitive industries where intellectual property protection is paramount. The nondisclosure agreement covering your day job may conflict with your side business if your side business uses comparable intellectual property or sales models, or builds on skills or knowledge gained at your day job.

If you’re not sure about what these stipulations might mean for your side business or what activities may or may not constitute a breach of contract, consult an employment lawyer. Enforceability varies by jurisdiction. For instance, noncompete clauses are notoriously difficult to enforce in California.

Bear in mind that employment contracts are negotiable. Ideally, you’d know that you wanted to pursue a side business, if you weren’t doing so already, before accepting an offer of employment.

There’s no harm in asking prospective employers to omit noncompete and exclusivity clauses from your employment contract, and many are happy to do so. More on that below.

2. Avoid Actual or Apparent Conflicts of Interest

Notwithstanding any noncompete clause in your employment contract, you’ll need to understand what constitutes a conflict of interest.

Remember, noncompete clauses often remain in force after your employment term ends, so quitting your day job to focus on your side business may not eliminate your legal exposure.

Once you’ve consulted with an employment lawyer, set a time to meet with your boss and the human resources contact at your day job. Candidly explain your side gig idea — or the business, if it’s already launched — and lay out any potential conflicts of interest as you understand them. Your employer’s representatives may have a different understanding.

Ideally, you’ll come to a mutually acceptable agreement that allows you to keep your day job while pursuing your own business on the side, perhaps with modifications to the latter. If that’s not possible, you may need to defer your side business ambitions or begin looking for another day job.

3. Follow Reasonable and Appropriate Workplace Policies

It’s increasingly common for employers to have formal policies governing employees’ side business activities. Some larger companies actually encourage employees to pursue their interests outside regular business hours.

Others, like Microsoft, even set aside time for such activities during the workweek, the thinking being that it’s better for employees to blow off creative steam on projects that might indirectly benefit their employers.

Whatever your employer allows or does not allow, follow their policies to the letter. You’ll probably need to avoid:

  • Working on your side business while working at your current job or “on the clock” at home, unless otherwise permitted
  • Using company resources, such as computer hardware or cloud accounts, for your side business
  • Using company time to promote your side business — for instance, talking about your gig on client calls
  • Poaching clients or employees from your employer

If you find your employer’s policies unreasonable or unworkable, schedule a meeting with your boss and HR contact to talk it over. Often, all it takes to come to a more equitable arrangement is a frank talk through the sticking points.

Resist the temptation to hide your side gig from your employer. They’re likely to react less favorably if they find out about it after the fact. If you need to submit your side gig for formal approval from a department or HR head, do so as early as possible.

4. Adopt a Ruthless Organizing System

Organize your side gig around the premise that it will need to remain completely separate from your day job. That likely means you’ll need to:

  • Set up a home office or dedicated workspace outside your place of employment, preferably not your living room or kitchen.
  • Avoid using work-issued computer hardware and mobile devices for side business activity.
  • Use personal software and cloud accounts to manage your side business (or set up separate business accounts).
  • Create a physical filing system for paperwork related to your side business, such as a drawer with accordion folders, in your home office.
  • Separate digital files related to your side business from personal and day job-related files using a separate cloud-based storage account and external storage media.

Beyond these steps, do whatever you feel is necessary to make your side business as efficient as possible. We’ll explore some specific actions later in this post.

5. Formalize Your Side Hustle’s Structure and Finances

Even if it’s not your primary source of income, your side hustle is a legitimate economic enterprise. Treat it accordingly. Matters to address before your side hustle takes off include:

Formal Business Structure

Consider a formal legal business structure for your enterprise.

Registering an LLC with your secretary of state’s office might cost anywhere from $50 to $200. But the liability protection alone is well worth the cost, especially if your side hustle — and any potential conflict with your 9-to-5 employer — exposes you to litigation risk. You can use LegalZoom to set up your LLC in just minutes.

Separate Bank Accounts and Credit Cards

Open a separate bank account for your side hustle. Novo offers a business bank account with no monthly fees and some useful perks for business owners. Use this as the central hub for your enterprise’s finances: all revenue in, all expenses out.

If your personal credit allows, consider obtaining a small-business credit card that earns rewards on everyday spending. Pay off this card’s balances out of your business bank account.

Business Budget and Plan

Even if you don’t see your freelancing operation or side gig as a true “business,” it’s certain to be more successful with a formal business plan.

If you’ve never drawn up a business plan before, look for a template online and customize it to your needs. For guidance, speak with entrepreneurs in your personal or professional network.

Your business plan should include near-, medium-, and long-term goals, as well as an estimated budget with revenue and net income projections.

Tax Obligations

Set up an initial consultation with a certified public accountant or tax expert specializing in freelance and small-business issues.

Your current accountant or DIY tax prep software might not be the best resource for complicated tax issues. If you continue to prepare your taxes yourself, arrange for quarterly estimated tax payments to the IRS and your state revenue authority to avoid penalties.

Balancing Your Side Hustle and Full-Time Job

Use these strategies to manage your time efficiently and reduce friction with your 9-to-5 employer as you balance your day job and side hustle.

1. Start Your Day Earlier

If you can’t attend to your side project while on the clock at your 9-to-5 job, you need to find time elsewhere in your day. For many side hustlers, that means starting the day a little earlier.

How much earlier is up to you. While juggling a full-time restaurant job and a burgeoning freelance writing enterprise, I routinely awoke two to three hours early and got right to writing.

To be sure, I was fortunate to be relatively young, unencumbered with kids, without after-hours professional obligations and free of major domestic obligations (my spouse was incredibly busy with professional school).

Such a drastic schedule change might not work for side hustlers with young kids or demanding jobs that keep them on call around the clock. But any extra time in the morning helps, even if it’s just 20 or 30 minutes two or three times per week.

2. Integrate Your Side Gig Into Your Morning Routine

Make those early minutes count by integrating your side gig into your morning routine. There’s a whole cottage industry built around efficient mornings — see, for instance, Forbes’ interview with Benjamin Spall, co-founder of the online magazine “My Morning Routine.”

One trick that worked well for me was swapping out my morning scan of the day’s news for a 15-minute email session. You can always catch up on the latest headlines before you go to bed if it’s not too stressful for you.

3. Sacrifice Part of Your Evening Wind-Down

The evening is another place to find time for your side gig.

If you’re not too ground down from the day, skip that second Netflix episode and use the time for tasks that don’t require excessive effort or concentration, such as:

  • Planning the coming week’s side hustle tasks
  • Sending and responding to emails
  • Researching competitors
  • Prospecting for new clients or opportunities (conducting basic research or sending out form emails)
  • Attending to clerical tasks, such as paying bills or managing business-related cloud accounts

Don’t work right up until bedtime, though. To increase your chances of a restful night’s sleep, give yourself a bit of time to wind down.

4. Give Up Part of Your Weekend

Most of your unstructured time likely falls on the weekend. If you’re serious about carrying on a legit side gig, you’ll need to sacrifice some of that time.

After some experimentation, I settled on writing straight through weekend mornings, from about 8am to noon or later. I left the rest of these days open for relaxation, housework, and socializing, although more often than not, I managed to squeeze in another stretch or two of writing.

5. Try to Work on Your Side Project at the Same Time Every Day or Week

Whether you’re a morning, night, weekend, or all-of-the-above side hustler, do your best to work on your side gig at the same time every day, week, or both. Setting a standing “work appointment” with yourself reduces uncertainty around when you’ll find the time to make progress toward your side goals.

Don’t obsess about honoring every single appointment. Some days, life will intervene. Merely blocking off the time is enough.

6. Set Tight (But Realistic) Deadlines

As Parkinson’s Law posits, work is temporally elastic. In other words, a given task “expands” to fit the time allotted for it.

If you have all day to complete a routine chore such as cleaning the bathroom, you’ll feel no need to hurry to complete it and might postpone or do it in segments. If it’s 11am and you need to get the bathroom clean for guests arriving at noon, you’ll power through it as quickly as you can without stopping.

The same reasoning applies to your side gig. Without firm deadlines, you’re likely to complete side project tasks at your leisure, even if you realize you’re moving slower than you’d prefer.

In the first weeks of my side hustle, Parkinson’s Law was a major impediment to my writing gig’s growth and profitability. My solution was two-fold. I temporarily took on more work than I thought I could handle to compress the time available for each task, and I set aggressive but realistic deadlines for every side project task.

It took some trial and error to determine precisely how long I’d need for certain types of tasks. Early on, feel free to set less ambitious deadlines, then tighten up as you get a better sense of your productive capacity.

7. Create a Task Calendar and Stick to It

Use a free calendar app, such as Google Calendar, to create a dedicated task calendar for your side gig. If you use separate email suites — as you should — for your day job and side gig, it shouldn’t be difficult to keep two separate calendars.

Use your calendar to batch and set deadlines for similar tasks. Unless you’re a truly capable multitasker, block out each side gig session into discrete chunks of time and allocate one specific task to each. For instance:

  • 6am to 6:30am: Respond to client emails.
  • 6:30am to 7am: Add three new slides to your marketing deck.
  • 7:30am to 8am: Draft a new post for your professional blog.

Take 30 minutes at the beginning of each week to plan out your side gig tasks for the following seven days, or however long you feel comfortable planning ahead.

Use your task calendar to set deadlines and milestones for longer-term tasks and projects too. For instance, in this example, you might add three new slides to your marketing deck every day to meet a deadline of 30 slides 10 days later.

8. Use Reminders Liberally

Many email suites have built-in reminder apps. Gmail’s “My Tasks” feature is perfectly serviceable. I use Do It Tomorrow, a bare-bones mobile app that’s ideal for noting near-term (today and tomorrow) reminders.

If you prefer the feel of pen on paper, devote a small notebook to reminders only, with one date per page, or use old-fashioned sticky notes on a home office corkboard.

However you choose to set your reminders, keep them separate from your task calendar. My reminders tend to cover one-off or occasional obligations related to my work, not actual deliverables.

For instance, “Pay estimated taxes for Q4” goes on my reminder app, while “Outline Money Crashers guide to balancing your day job and side hustle” lands on the task calendar.

Like its task calendar, your side gig’s reminder system should be separate from any day-job-related reminder system. Using your personal email to manage your side hustle and your work email to manage your day job should do the trick.

9. Eliminate Distractions and Time-Sucks

Your side hustle may not be your top professional priority, at least at the moment, but that doesn’t mean you should take it any less seriously.

When you’re working on tasks related to your side gig, no matter how trivial or routine, give them your full attention and be ruthless about eliminating anything that erodes this attention.

Strategies to eliminate distractions and stay on task include:

  • Setting strict social media time limits using apps or controls built into your phone — some lock you out of your accounts for the rest of the day if you exceed your allotted limit
  • Hiding your phone in a drawer in another room until you’ve completed your scheduled tasks
  • Using a parental control app to block websites you know will distract you — Digital Trends has some good tips on this
  • Taking five-minute breaks every 60 to 90 minutes to walk around the block or engage in some other head-clearing activity
  • Allowing yourself a small reward, such as a nice meal out, for meeting deadlines or milestones you’ve set for yourself

Remember, the more efficiently you manage the time you devote to your side hustle, the less likely your side hustle is to impair your performance at your day job.

10. Hire a Virtual Assistant for Help With Low-Value Tasks

If your budget allows, hire a helping hand for routine or low-value tasks for which you lack the time, patience, or attention to detail.

You can find highly rated, thoroughly vetted, U.S.-based virtual assistants on Upwork for $25 per hour or less, and Zirtual offers flexible plans starting at about $37 per hour.

Use these assistants to outsource tasks like:

  • Managing your contacts list and calendar
  • Responding to emails
  • Editing advertising or blog copy
  • Fixing non-technical website errors, such as broken links
  • Drafting and scheduling social media posts

11. At Crunch Time, Let Your Day Job Win

Unless you’ve worked out an arrangement with your 9-to-5 employer that allows you to pursue your side hustle on company time, your day job should always take precedence.

If you manage your time well and keep your self-employment obligations from becoming overwhelming, you shouldn’t feel forced to choose between one or the other very often.

12. Maintain Strict Separation Between Your Day Job and Side Hustle

Resist the temptation to work on your side hustle during company time, even when the infraction seems trivial — say, using a work device or network to answer emails or calls related to your side hustle.

Technically, using company time to work on anything other than your job duties is time theft, and it’s a great way to get on your boss’s bad side. You don’t want your divided attention to factor into a negative performance review.

13. Work Your Side Hustle Into Sanctioned Day Job Activities

This is a significant exception to the two preceding points.

If your side gig complements your day job nicely — say, you’re a graphic designer for an ad agency by day and a freelance photographer by night — you’ll likely find opportunities to work your side hustle into day job activities and obligations.

For instance, during breaks at the trade show you’re required to attend for your 9-to-5 employer, you’ll have plenty of time to hobnob with prospective freelance clients.

Just remember the same cautions apply here: Avoid poaching your 9-to-5 employer’s clients, don’t prioritize your side hustle over your day job, and make sure your employer knows what you’re up to.

14. Don’t Overschedule Yourself

One truth you’ll quickly learn as your own boss is that no matter how efficiently you manage your time, you can’t add more hours to the day.

Start by setting a hard limit on the number of hours you’ll devote to your side hustle each week. Reexamine this number periodically and adjust it up or down as necessary.

At first, I overestimated the amount of time I could devote to my side hustle while working full-time at the restaurant. After it became clear that my writing was suffering, I pared back my freelancer schedule and allowed myself an extra hour of sleep each night.

That had the added benefit of staving off burnout, allowing me to diversify my freelance practice and pursue new business opportunities that I might otherwise have ignored. Now that I write for a living, I’m grateful I took things slow and steady at the outset.

15. Use Time Off to Your Advantage

For many side hustlers, taking a fortnight off for an international vacation or Caribbean cruise just isn’t in the cards. There’s too much going on closer to home.

However, this shouldn’t prevent you from using every day of your 9-to-5 employer’s time off allowance. Use a sick day or vacation day to extend a two-day weekend and spend that found Friday or Monday working on your side gig.

As the fourth quarter wears on and it becomes clear you won’t need them, spend your remaining off days en masse and devote a full workweek to your enterprise. Who knows what you’ll accomplish with that free time?

Final Word

Most side gigs don’t turn into full-time careers, and plenty of workers who begin a side gig for the express purpose of supplanting their 9-to-5 job and going into business full-time abandon those plans for one reason or another.

Still, it’s worth keeping an open mind about your side gig’s growth potential.

When I first began picking up freelance writing gigs to supplement my meager day job earnings, I had no intention of going pro. In hindsight, my full-time writing career seems inevitable, but I can assure you it was far from a sure thing in those early days.

A few years from now, you might have a similar story to share. Or perhaps you’ll amuse your coworkers with tales of the time you tried to turn a side project into a proper career. Either way, be sure to make the most of the journey.

Brian Martucci writes about credit cards, banking, insurance, travel, and more. When he's not investigating time- and money-saving strategies for Money Crashers readers, you can find him exploring his favorite trails or sampling a new cuisine. Reach him on Twitter @Brian_Martucci.