May 2022 – 15 min read
A side hustle is a way for entrepreneurs to make extra income doing something they’re passionate about, while still being employed at their current job.
Some examples of side hustles include:
- Freelance, contract or gig work
- Delivery work such as Uber or food delivery
- Services such as dog-walking or catering
- Selling something you made or reselling something you bought previously
- Teaching or tutoring
- Make more money – Whether you want to pay off bills or save for something like a home or vacation, the money you make from a side hustle can help support your regular income
- Learn entrepreneurial skills – A side hustle lets you pursue your passion, start your own gigOpens in a new window and learn new skills
- Low risk – Because you’re still earning an income from your real job, if the side hustle doesn’t work, you’re not risking your financial security
Once your side-hustle gets going, you may start thinking about making it your full-time job. Here are some ways to know you’re ready to make the jump:
- Your making reliable income from your side-hustle that compares to your full-time job
- Your client base continues to grow
- You have more business than you have time or resources to be able to complete
- Do you love your side hustle more than your full time-job?
- Can you scale your side hustle so it can continue to grow?
- Do you have a support system of friends and family who understand your decision and encourage you?
- Do you have an emergency fund to pay your expenses for at least 6 months?
- Can you separate your work life and private life to help avoid burn out?
- Can you afford personal health and dental benefits to replace your workplace benefits?
Most side hustles start out as sole proprietorships (you are the company). However, as your business grows, you may decide it’s time to make it a corporation because:
- You want to protect yourself against personal liability for your business activities
- You need to separate your personal and business finances
- You want to take advantage of lower corporate income tax rates
- You want to access business loans or grants available only to corporations
- You want to project a more professional corporate image to your clients
Now that you understand more about turning your side hustle into a business, you may want to contact your advisor to:
Create a retirement savings plan
The information provided is based on current laws, regulations and other rules applicable to Canadian residents. It is accurate to the best of our knowledge as of the date of publication. Rules and their interpretation may change, affecting the accuracy of the information. The information provided is general in nature, and should not be relied upon as a substitute for advice in any specific situation. For specific situations, advice should be obtained from the appropriate legal, accounting, tax or other professional advisors.