So many questions, even more answers…
What kind of money might it make?
What can you afford to pay yourself, if anything?
Obviously, it depends on your project, your current financial situation and what you’re looking to get out of the endeavour.
Truth is, you could probably write a whole report purely on the financials of side projects. And somebody probably has.
The basic principle is: if you’re not too hot on the money-handling side, we strongly recommend you hook up with someone who is (i.e. your partner, your parents, your good mate or your mentor).
Get it delegated to someone you trust and who has skills in the department that you might lack — someone who gives a monkey’s. It’s really important that you get this part locked down.Then crack on with what you are good at.
In researching this report, we spoke to scores of side project entrepreneurs and found that many of them didn’t actually start their thing with money as the #1 goal.
Sure, they wanted to ultimately generate income — good income. But as a side product of the side project, not as reason numero uno.
With this in mind, maybe a good habit to get into would be regularly asking yourself, ‘Why am I doing this?’.
(May we refer you back to the main visual for this chapter: ‘Love pays well. In the end.’)
So it’s a matter of sticking at it and not bailing early. But also, it’s about being smart enough to decide whether you’re really on to a winner (or not) before throwing good money after bad. Though ‘throwing bad money after good’ is probably a better way of expressing this.
Also figure out if you can bootstrap or need outside funding. Some people dip into savings (which can quickly redline). Others try to run the gig on credit cards (which also isn’t our top recommendation). But one of the galacticos we spoke to was so passionate (or adamant) about not taking external funding that they didn’t pay themselves anything; they took on extra outside jobs instead.
Maybe a crowdfunding route would be good for you, or perhaps friends and family might be keen to support. It’s just a way of monetising your following, really. And if that’s what you need, look up Kickstarter Lessons by Jamey Stegmaier. It’s a crowd favourite.
Remember that you might also be eligible for public or private sector grants, low-interest loans or even R&D tax credits to help fund your project. Or you might even get some joy from the bank. (Lotsa luck with that one.)
Do you need VC money? If you think you do, stop reading here and go make friends with somebody at Techcrunch. Or see if you can get Peter Thiel or Marc Andreessen on the line.