Why Your Side Hustle Needs an Exit Plan
Gig work can be a blessing or a curse depending on how it’s used.
Blessing: extra work that augments your income to help you meet a personal goal, like paying off debt or furthering your career.
Curse: a seemingly never-ending grind that can become a critical means of how you support yourself from which there is no escape.
To avoid falling into that second category, your side gig needs an exit plan.
The Reality of Working a Side Gig (or Three)
Despite flashy reports of record-breaking unemployment and economic expansion, many Americans feel something is off with the economy. Since the Great Recession, it’s become commonplace to have two, sometimes three jobs. Or, more recently, to have no stable job at all and to scrape by doing gig work across a handful of apps.
According to a survey from the Federal Reserve, upwards of 78 million people participate in gig work in some way or another. There are benefits, no doubt, to these types of “alternative work arrangements.” Chief among them are flexibility and on-demand hours.
But for many workers, it’s not sustainable, whether it’s the lack of health insurance or because the odd hours conflict with raising a family or a host of other reasons.
Dr. Alexandrea Ravenelle, a gig economy researcher and author of “Hustle and Gig: Struggling and Surviving in the Sharing Economy,” interviewed scores of gig workers for her book, and many of them got “stuck” in the gig economy. At first, the work was welcomed and convenient. But after follow-up interviews four years later, she said many workers were in the same spot, often unwillingly.
“All of the workers that I’ve interviewed who are stuck in the gig economy have college degrees,” she said. “People who thought they would leave… are still doing it.”
Your Side Gig Needs an Exit Plan
So what’s a gig worker to do?
Ravenelle says it’s important to have an exit plan in mind before taking on a side gig.
“How are you going to get out of what it is you’re doing? How long do you plan to stay? Is there a component of it that could be furthering your career?” she said.
An exit plan that defines clear professional and/or financial goals can stave off a reliance on money from gig work to cover basic necessities and prevent workers from getting stuck in an endless hustle.
Setting a financial goal for your side gig could be as simple as paying off $1,000 in credit card debt by delivering for DoorDash, or it could be as complicated as picking up freelance projects to max out a Roth IRA to retire early.
Whatever your goal, it needs to be attainable and specific. And, as best as possible, it should not be related to covering basic necessities like food or rent.
For Jerry Brown, a 32-year-old librarian tech from Baton Rouge, Louisiana, that meant driving for Uber to pay off his car loan six months early. He said working nine-hour shifts at the library made it hard for him to find additional employment. The ridesharing app provided him the flexibility to make some extra cash during his downtime.
Brown did everything right. He needed a set amount of money and gave himself a clear deadline. He was determined to pay off the loan. After work and during the weekends, he started taking rides.
The additional work started creeping up on him. Some nights, he drove until 3 a.m.
“Just one more ride, just one more ride,” he would tell himself. “It was kind of addictive.”
His friends, and even some of his passengers, told him, “You need to go home and take a break, man.”
After months of 12-plus-hour days, Brown reached his goal. He paid off his car. Even with a clear financial goal, gig work almost sucked him in anyway.
“I was working 80 hours a week for a long time,” he said. “It messed up my personal life, honestly.”
After his girlfriend broke up with him, he had an epiphany: “I need to spend less time working so I can enjoy life,” he said. “I have other talents I can take advantage of.”
Brown said since quitting Uber, he’s had much more time to spend sharpening his writing and marketing skills on his blog — skills he’s happy to spend time honing since they’ll further his career down the line.
Adrienne Johnston was a regional trainer for Starbucks in Seattle before transitioning into marketing for several startups in the area. After a stint in the financial services industry, she started thinking about striking out on her own.
“Putting [70 hours a week] into growing someone else’s business, and seeing them leave early on Fridays” was her breaking point.
“I was spinning my wheels to make someone else really, really rich,” she said. “I came home one night, and I said to my husband, ‘I just can’t do it anymore, I’m quitting tomorrow.’”
And so she did, using freelance platforms as her springboard.
During a four-month transition period, she experimented on Upwork and Fiverr. She was always good at marketing, but she wanted to do something a little different: presentation design.
Little by little, she racked up projects. Clients left positive reviews and that led to bigger projects. With a solid portfolio and glowing recommendations, she started directing clients to her website, to avoid the 20% fees from Upwork and Fiverr. That’s when her business really took off.
When using freelance websites, having a plan to build a client base and to eventually decrease your dependence on the platform is crucial.
Johnston’s exit plan doubled down on that momentum. She used search engine optimization techniques to drive more clients to her own website rather than her freelance profiles. She still keeps her old profiles active, though, as a way to showcase her references, reviews and past projects.
Another strategy to wean yourself off websites that take a cut of your earnings is good ol’ fashion networking.
“Figure out who your clients are and go to them,” said Laura Poole, who coaches freelancers on growing their own businesses.
Poole suggests looking for potential clients at associations or conferences in your field. And bonus points if you can score a presentation at those events.
“If you can present something useful, they will remember you,” she said. “Really, really. They’ll remember you. Better than handing out business cards. Better than even placing an ad.”
Already Stuck? You Have Options Too
Many people are drawn into gig work by how it’s portrayed: Be your own boss, they say. Work when you want, they say. Financial freedom awaits you!
Except, as we know, that’s not the reality for most people, and there are clear problems with America’s hustle culture, which glorifies skimping on sleep to work 80 hours a week. If you’re hustling from one gig to the next with no clear end in sight, a part-time job might be a better route.
“You’re better off working a minimum-wage job than you are working in the gig economy in many cases,” Ravenelle said.
That’s because W-2 employees get worker’s comp if they’re injured and workplace protections from harassment. The pay is usually more stable, too.
A part-time or full-time job can work as a reset. From there, you’ll have stable employment to cover basic expenses and the leeway to select a side gig that works for you ― whatever your financial or career goals may be.
Adam Hardy is a staff writer at The Penny Hoarder. He specializes in ways to make money that don’t involve stuffy corporate offices. Read his latest articles here, or say hi on Twitter @hardyjournalism.