S&P 500   4,471.37
DOW   35,294.76
QQQ   368.94
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S&P 500   4,471.37
DOW   35,294.76
QQQ   368.94
pixel
pixel
pixel
S&P 500   4,471.37
DOW   35,294.76
QQQ   368.94
pixel
pixel
pixel
S&P 500   4,471.37
DOW   35,294.76
QQQ   368.94
pixel
pixel
pixel

Millennial Money: 5 steps to level up your side hustle

Tuesday, September 21, 2021 | Kelsey Sheehy Of Nerdwallet

The pandemic isn’t crushing the entrepreneurial spirit. It’s fueling it.

People normally tied to a desk or working double shifts used lockdown to launch side hustles, often out of necessity. And some have turned those side gigs into full-fledged businesses.

According to the U.S. Census Bureau, 427,842 new business applications were filed in August 2021 alone. That figure was 288, 026 in August 2019.

While a side gig can be spontaneous, growing a legit business requires research, planning and organization. Otherwise, your fledgling enterprise could crash and burn in a couple of years.

These basic but essential steps can help you take things to the next level and give your new venture a shot at staying power.

1. CHOOSE A BUSINESS STRUCTURE

There are six common types of business entities: sole proprietorship, general partnership, limited partnership, C corporation, S corporation and limited liability company. The option you choose determines how your business is taxed, as well as who is financially responsible if your business is sued.

Entrepreneurs often default to sole proprietorship because it’s the easiest, but it’s also the riskiest, says Nellie Akalp, CEO and co-founder of corpnet.com, a document filing service that helps streamline the business formation process for entrepreneurs.

“There is no registration required nor are there corporate requirements,” Akalp says. But “there is no legal separation from the company, so the sole proprietor is personally responsible for any debts or liabilities.”

Registering as an LLC or corporation is more expensive and requires more paperwork, but it shields your personal assets from lawsuits.

2. OPEN A BUSINESS BANK ACCOUNT

Mixing business and personal finances can get messy, especially when it comes to filing taxes or securing a business loan. Open a business checking account to keep business income and expenses organized and easily accessible.

Look for a business account that has low or no monthly fees and fits your business needs in terms of transaction and deposit limits.

A business credit card can also help you track expenses and identify tax deductions. Plus, you can earn rewards, like cash back on gas, office supplies and business consulting services.

3. UPGRADE YOUR BOOKKEEPING

No more manual spreadsheets or shoeboxes full of receipts; scale up to an accounting software that can do some of the heavy lifting for you, like tracking cash flow, managing invoices and generating reports.

Expect a learning curve with any new system, but know that it will help your operation run more smoothly. The right accounting software can also give you deeper insights into your business and help you identify weak points and opportunities to save money.

“Accounting is the language of business, so invest time and money into understanding how to do your books,” says Danetha Doe, founder of Money and Mimosas, a financial education platform for independent contractors, freelancers and small-business owners. “As a business owner, learning how to manage your company’s finances, read profit and loss statements, and understanding cash flows will make you a better entrepreneur.”

4. SPELL OUT YOUR BUSINESS PLAN

Your side hustle may have started organically, but turning it into a full-fledged business requires research and planning.

Sketch out short- and long-term goals for your business, along with a sales plan, financial projections and potential roadblocks. Be realistic, set specific targets and spell out how you plan to reach them.

Building a business plan gives you a road map for how to grow your business. It also shows lenders you’ve done your homework should you need to secure a business loan.

Need help with your business plan? Turn to your local Small Business Development Center. These outposts are run by the U.S. Small Business Administration and offer free business consulting services.

5. INVEST IN PROFESSIONAL HELP

Entrepreneurs, by nature, wear many hats. But you don’t need to wear all the hats.

Outsourcing some aspects of your business frees you up to focus on other things, like customer service or product development.

Not hip to social media? Consider hiring someone to build and manage your business’s presence on Instagram, TikTok and the like.

Do tax forms make your eyes cross? Invest in a certified public accountant to file for you.

“CPAs may be more expensive than doing taxes on your own, but it will be done right,” says John Pham, founder of The Money Ninja, a personal finance website. “Plus, they will maximize your tax deductions, which will most likely give you a higher return than the cost of a CPA.”

_______________________________

This column was provided to The Associated Press by the personal finance website NerdWallet. Kelsey Sheehy is a writer at NerdWallet. Email: [email protected] Twitter: @kelseylsheehy.

RELATED LINKS:

NerdWallet: How to write a business plan https://bit.ly/nerdwallet-business-plan

Find a Small Business Development Center https://www.sba.gov/local-assistance/find?type=Small%20Business%20Development%20Center


7 Growth Stocks to Buy as the Market Slumps

At times of volatility, it can be hard for even experienced investors to stay the course. Yet over time, stocks have consistently increased in value. And growth stocks tend to be among the ones that show the largest gains. Growth stocks are companies that analysts believe will grow at a rate that is significantly above the market average.

These stocks are also characterized by companies that invest a significant portion of its profits back into its business in order to accelerate growth. This is opposed to value stocks that make returning a portion of its profits to shareholders a priority. This typically occurs in the form of a dividend. One misconception of growth stocks is that they have a high correlation with the market. It’s true that when the market is moving higher, these stocks tend to outperform. However, when the market is moving lower, these stocks sometimes perform better.

So why should you consider buying growth stocks now? The reason is this. In many cases, the company’s underlying fundamentals are still positive, but the sentiment has changed. And that means it’s a good time to buy these stocks on sale.

View the "7 Growth Stocks to Buy as the Market Slumps".


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