5 ways to COVID-proof your side hustle
As of December 2020, the U.S. unemployment rate was at 6.7%, with about 10 million Americans out of work, according to the Bureau of Labor Statistics. This is almost twice the unemployment rate of February 2020, before the pandemic hit.
With so much financial and economic uncertainty, 12% of the total U.S. workforce turned to freelancing last year, according to Upwork, and 86% of all freelancers are optimistic about the future of this career path.
If you’re among the millions of Americans who started a side hustle or poured more time into it since COVID-19 began, it’s crucial to protect your growing small business from unexpected challenges and make money no matter what.
Maintain an always-adapting mindset
The most secure, COVID-19-proof business ventures are the ones that can adapt existing skills into innovations or solutions to fit the current landscape, McKinsey suggests.
For example, as a teacher, you might adapt by earning extra income tutoring students online. If you live in an area where many restaurants and businesses are still closed, you might consider delivering groceries, takeout meals, or ecommerce orders in your free time.
If you maintain a mindset of always-be-adapting, your focus shifts from “I don’t know what to do” to “I can make this work for me.”
Create a budget and stick to it
This may sound like the boring part of running a side hustle—but it can’t be overlooked. When funds are low thanks to COVID-19 or another unforeseen challenge, a good budget will keep you afloat and ensure that you are prepared well before the challenge arises.
A great budget doesn’t need to be complicated. Use an online accounting tool to keep track of a few key financial details, including:
Don’t ignore business insurance
If you want to minimize the overhead costs of your side hustle, you might have forgone business insurance, but that’s a mistake. If disaster strikes, business insurance is crucial to safeguard your assets. As experts at USA Business Insurance suggest:
“While business owners might assume the risk of a major liability occurring is minimal, they do happen, and people or businesses [must] take out insurance policies precisely because they’re unexpected.”
Prepare for the unexpected by protecting your business from unforeseen setbacks. A simple liability policy may be all you need.
Check small-business grant options
Help is always available, and when disaster strikes it helps to have done the legwork beforehand. Check out these private and federal small-business grants and bookmark the ones that apply most for you. If needed, you can pull up the application and apply right away to make sure your side hustle is taken care of.
Prepare in advance for tax season
Don’t forget to continually set aside money each month for taxes. You don’t have a company taking those taxes out for you—and you don’t want to be left scrambling to make that money come tax time if an event like COVID-19 hits. Use this tax calculator to find out how much you need to put away each month.
But don’t stop there.
Whether you started your side hustle in response to the global pandemic or you took an existing side hustle to the next level this past year, it’s essential to COVID-proof your small business. No matter what 2021 has in store for the economy, taking proactive measures will always keep your side hustle on the course for success.
Jessica Thiefels is the author of 10 Questions That Answer Life’s Biggest Questions, podcast host of Mindset Reset Radio, and founder and CEO of Jessica Thiefels Consulting, an organic content marketing agency. Follow her on Twitter @JThiefels and connect on LinkedIn.