It seems so easy to make money from a side business. Just resell items through Amazon or some other website and now you’re raking in the dough! Sometimes that happens, but many times it does not. Here are few things to consider before doing so and some ways to make it more profitable:
The Value of Your Time: Once you get past the start-up period, are you making more than your wages or main business? For example, if your main job or business nets you $75 per hour and your side job nets you $15 per hour, then that is a poor use of your time. Ideally, your side business should make more per hour than your main job, otherwise you should consider investing your time at your job or main business.
Expectations: What can you realistically expect to make? Calculate how much you can bring in and see if the additional time and focus is worth it.
Why?: Why do you want to own a side business? Is it for personal satisfaction or solely for monetary gain?
Ways to make it profitable:
Choose the right side business: Generally, a service business will take the most amount of your time and is harder to leverage because it depends mostly upon the owner. Choose a business that can operate with the least amount of your time or where tasks can easily be delegated.
Passive only: If you have the capital, but not the inclination to operate a side business, then you can invest in a business as a passive activity with minimal input.
Run the Numbers: No matter which type of business you choose, you need to perform research, analyze, and project what you expect the results to be. Since we usually tend to project very rosy outcomes, then try to come up with 3 different scenarios, including worst case, average, and best case. Your time and money are too valuable to invest them poorly.