Do you want to increase your income and gain financial freedom? Then it’s time you start looking for business ideas to launch your side hustle.
When starting a side hustle, you may believe there’s no need for documentation. But it’s important to treat your side gig as a business. This way, you can build and grow it and then make it your primary income source by converting it into a full-time business.
One of the most important documents to prepare at this initial stage is a business plan. Now, you may wonder why you need this document for your side hustle.
So, let’s explore why you need a business plan and how it can benefit your side business:
A Business Plan Helps You Manage and Grow Your Side Hustle
Wondering why is a business plan important?
A prominent benefit is that it can guide you through each stage of starting and expanding your side hustle. A business plan is like a GPS. So, it’ll provide you with relevant information about how to choose the right business structure and then manage different operations.
It gives you a unique way to think through and detail all the critical elements of how you can set up your side hustle. So, even if you start on a small scale, you can always expand it over time if you write an effective plan first.
It Offers an Action Plan
Writing a business plan for your side hustle may seem to be a major challenge. But once you start creating, you’ll realize it’s not as difficult as you thought.
Do you want to know what is the major purpose of writing a business plan?
It works as a written action plan that guides you about the path your business should take to make money. It’s not a one-time project. Rather, the document works as an ongoing guide for your hustle.
Also, it’s a good idea to write separate documents for different operations – sales, marketing, and operations of your side hustle.
It Helps You Set the Right Business Goals
When it comes to building a side hustle, it’s best to choose something you’re passionate about. But even if it’s based on your hobby, you should always treat your side hustle as a business.
So, it’s imperative you’d need a business plan.
Now with the help of this business plan, you can set short-term (3 months to a few years) and long-term (5-10 years or longer) goals or milestones. This way, you can make better decisions about its operations.
For instance, you may want to grow revenue to $5,000/month. So, you need to define how long it should take you to achieve this milestone. Also, your business plan will help you make informed decisions to achieve this goal within the period.
It Helps You Secure Funding
When your side business grows, you may need funding to hire a team and expand operations. At this stage, you’d need a clear and precise business plan. You can show the document to potential investors to convince them to invest in your business.
The document will depict how you manage different aspects of your side gig. You can earn their trust and persuade them this way. Once they feel confident, they may agree to invest.
Similarly, you may need a business partner when you decide to convert your side hustle into a full-time business commitment. This is when you’d need a business plan too.
You Can Choose a Format That Meets Your Needs
It’s a misconception that a business plan is an extremely long document.
The fact is that there are different formats for writing a plan. So, you can pick a format that best suits the needs of your side hustle.
Many hustlers go with a traditional format. It’s a relatively longer format that needs an in-depth explanation of each section. For example, you have to write in detail about your marketing strategies and product sourcing or manufacturing process.
On the other hand, Lean startup plans are shorter and may not take longer than 1-2 hours to write. That’s because it focuses on a brief summary of each section.
You may write a lean startup plan to share with your investors. But if you want a clearly defined plan for your team, a traditional business plan is your go-to option.
Conclusion
Starting a side hustle can help improve your financial position. You can increase your sources of income to avoid unexpected financial crises.
But when taking the first step towards launching a side business, make sure you take time to write a business plan. It may seem unnecessary, but it can greatly benefit you in the long run. Now that you know why you need a business plan, you should get started with writing one.
Also, make sure you register with the US Small Business Administration website to get more information about loans, grants, and other resources for local small businesses.