This reason alone could be why your side business is not lucrative

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If you’re not meeting your income goals, it’s worth digging deeper and figuring out why.

Key points

  • A side hustle is a great way to increase your income.
  • If your income is insufficient, it may be because you are spending too much to make this concert possible.

Although side hustles are all the rage these days, many people regularly attend side gigs to boost their savings, pay off pesky debts, and work toward other goals. And some people just like having extra cash that they can use to splurge like vacations, concerts, clothes, and social events.

Whatever your motivation for having a side hustle, your goal is undoubtedly to earn a good amount of money from this gig. But if that hasn’t been the case lately, it might be worth delving deeper into the money you’re shelling out on that job.

Are you spending too much to make money?

They say it takes money to make money, and that sentiment tends to hold true, at least to varying degrees. Imagine working in a typical office that requires you to travel 60 miles a day. Well, you’re going to be spending money on gas for your vehicle, and maybe things like parking as well. It’s just the cost of bringing home a paycheck.

But there may come a time when you are spending too much on your own to make the job worthwhile. And so if you’re not happy with your bottom line, it’s time to re-evaluate how you’re doing that job and see if there’s a way to cut costs.

Say you’re hired as a dog walker for $15 an hour. If it costs you $5 in gas to drive to a customer and you spend an extra $2 on dog treats for the happy little guy you like to walk around, suddenly your income is practically cut in half.

And oh yeah, there are taxes to consider. So when you make $15 an hour walking dogs as a freelancer, you’re probably only taking home $11 or $12 when you factor in how much you owe the IRS. So when you subtract $7 from that reduced sum, your hourly rate suddenly isn’t that impressive.

A better solution

If you’re enjoying your side hustle but are frustrated that it just hasn’t been as lucrative as you hoped, it might be time to rethink your approach. Going back to our example, if you’re going to walk dogs for $15 an hour, you might need to limit yourself to customers who cost $2 or less to drive to. Or, you may decide to only take clients whose homes are further away if you can walk a few different dogs in the area, because you are already there.

You may also have to make the difficult decision to stop buying treats for your furry friends. Or, you may need to raise your hourly rate. But before you give up on your scramble, it’s worth seeing what adjustments you can make.

Remember, there’s nothing wrong with enjoying the work you do on the side. But at the end of the day, your primary goal is probably to make money. And if it’s not happening at the rate you hoped, it pays to implement changes that allow you to accumulate more money.

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