The 5 unique benefits of combining employment with self-employment
A lot is going on in the world at this time, and a lot is out of our control. But how can you use this time for something positive? What creative project are you going to start or finish? In my project, I write about the unique benefits that having a side hustle may bring to you, and help you launch a side hustle of your own.
One and a half years ago, I decided to become self-employed next to my regular employment. It was an exciting move. At that time, I had no idea that it would take me to the place I find myself in, today.
This still fairly uncommon, so-called ‘side hustle’ has done so much for me. And when I started reaching out to other people with side hustles I found that they had experienced similar, fulfilling effects.
They feel an energy they had never felt before, experience professional and personal development at an unprecedented rate, create new value for their employer, build a distinctive career profile, and sometimes manage to generate significant new streams of income. Without their side hustle, they would have never grown this much, this fast.
This is why I believe that everyone should have a side hustle.
This conviction has led me to write this piece, with the purpose of helping employed professionals to unleash their entrepreneurial talent for their own benefits, their employer’s and, quite possibly, society’s as a whole.
In this first piece, I will outline five key benefits (and drawbacks) of starting and running a side hustle. In the pieces that follow, I will help you find the best opportunities to starting a side hustle, provide you with a plan to get started, and tips on how to make being employed and self-employed work on a day-to-day basis.
As you may well know, the landscape of work is changing rapidly through developments such as flexible employment contracts, the gig-economy, rising self-employment and new technologies. That is why now is a great moment to take a closer look at the concept of the side hustle: it is very likely to take a prominent place in the future of work.
So let’s dive right in.
How it began for me.
For my regular job, I was working in the innovation department of a large corporate organization. While happy at the time, I found myself longing for more adventure and a steeper learning curve. Internal opportunities could not offer what I was looking for. Starting my side hustle, on the other hand, turned out to offer exactly that.
Not only have I gained much experience from being self-employed as a freelance consultant, but it has also allowed me to work alongside inspiring startup founders, and to hone my skills inside an international strategy and innovation agency. Also, as of recently, I have started working on innovation projects with the Dutch Armed Forces (no longer as a freelancer, but in military service).
Looking back, I can say that, picking up a side hustle has been the best decision of my career so far. It creates and is expected to continue to create value for many years to come, because of the unique learning experiences and wide exposure to new opportunities. Realizing the satisfaction this approach to work brings, I cannot imagine ever going back to having one single form of employment.
Defining the side hustle
While perceptions of side hustles may vary, I see it as running your own entrepreneurial initiative (in any form), while being employed with another organization.
I also believe that it involves doing work for which you get paid in one way or another (this includes getting paid, yet being non-profit). I’m not saying that there is anything wrong with doing voluntary work, it simply is a different concept. The same goes for working fewer hours to pick up a hobby. A respectable choice, yet, a different concept.
Having a side hustle is often seen as a temporary state in which someone tests a business idea before deciding to take the plunge into fulltime entrepreneurship. I believe, however, that it can also take a more permanent state in which professionals intentionally blend employment and self-employment to uniquely shape their working lives over time. I consider myself to be part of this group.
While one can start off with starting their side hustle besides their regular job in evenings and on weekends, I have learned that a side hustle starts to create real value when professionals sacrifice one day of employment to pursue their own initiative. This allows them to lean in by working with clients during office hours, taking meetings, and participating in events. Another reason why I am a strong advocate of this approach, is that it facilitates a healthier work-life balance that can be sustained over a long period of time.
Based on my personal experience, and that of other people with a side hustle, I have learned that sacrificing one day of employment to pursue self-employment may easily create a return on that investment by two or three times. This effect can be attributed to five key benefits that having a side hustle brings.
Five key benefits to having a side hustle
There are many ‘end-goals’ that one can have in mind when starting a side hustle. Some do it because they want to pursue their passion. Some do it to learn something new. Some see it as a way of testing the waters before taking the plunge into full-time entrepreneurship. Some do it because they want to do more meaningful work. These are all very legitimate reasons.
Based on my personal experience and research, I have found that whatever your end-goal is, picking up a side hustle can always provide you with a set of five benefits. I have also found that neither pure employment nor pure self-employment can provide what this unique combination can. In the remainder of this piece, I will take you through each of the five benefits listed below.
1. It unleashes new energy in a safe environment
2. It enables you to learn faster and to create unique value
3. It helps you build a distinctive career profile
4. It is a catalyst for new opportunities
5. It can create a (significant) additional stream of income
Benefit 1. It unleashes new energy in a safe environment
Having a side hustle combines the best of two worlds: the stability of employment and the adventure of running your side hustle.
The stable employment
On one hand, you will remain employed. You can see your employment as your bread and butter. It is your long-term career path that will continue to provide you with all the professional greatness that you may be getting from it right now: learning core skills, gaining industry knowledge, working with teams, and so on. Stability, in this way, does by no means equal dull.
At the same time, your employment provides you with a safety net through benefits such as a steady income, a pension, health insurance, and/or paid holidays. This safety net empowers you to do whatever you want in your side hustle.
The adventurous side hustle
On the other hand, you will have your side hustle. One that can come in any shape or form. While you can see your employment as your bread and butter, you can see your side hustle as the topping. It’s up to you to decide what flavour the topping is and you can change this topping as often as you like — if change is what you want.
Your side hustle gives you one day per week that is all about you. One day per week of adventure in which you can explore the questions that you may have always been asking yourself. How would it be to run my own business? What new things will I learn? Will this adventure be as fulfilling as I have always dreamed it to be? Could my idea make the world a better place?
As you can perhaps imagine, working on these ideas — your ideas — can unleash a new kind of energy and a sense of fulfillment that you may have never felt before.
Benefit 2. It enables you to learn faster and to create unique value
I have found that many people with a side hustle leverage the skillset they already have to build their business around. This makes sense, because this is how they can immediately start to add value for their new customers. Yet, people with a side hustle also claim to be learning much faster than they were doing while only in employment. How can this be the case if they are mainly leveraging existing skills?
From what I have found, the explanation lies in the fact that what they learn, besides coming from developing entrepreneurial skills, appears to come from working inside entirely different contexts.
An example: learning from your context
When I started my side hustle, I was working inside a large corporation for four days per week. The fifth day, I spent working as a member of startups. The contrast could not be bigger. I believe that this is where my key lessons learned came from.
I learned from conversations with my new colleagues, from participating in internal and external meetings, and from experiencing how my output was appraised and used. In addition, I had the pleasure of being a sparring partner for the startup founders. This provided me with insights into the ins and outs of running a fast-growing business.
I was learning and — at the same time — leveraging my existing skills and knowledge to earn my right to be there, while getting paid in the process.
Turning context into value
Over time, I found that being present inside multiple contexts at the same time (by being both employed and self-employed) can create enormous value. This value is created in three ways, for both yourself and the parties that you work with:
- You will be learning exponentially. Being in different contexts at the same time allows you to transfer everything you learn from one context to the other. Doing so produces new effects and learnings in the new context. You can then take these new learnings back into the original context, on its turn creating new learnings. In this way, you are at the epicenter of a continuous feedback-loop of learning.
- You will spot new opportunities for innovation. Being present inside different contexts also allows you to innovate in new ways, since it enables you to make connections between different bodies of knowledge residing in these contexts. It positions you to make combinations that no one else can make while they are working inside one isolated context at a time.
- You can be the orchestrator of partnerships. Working in different contexts enables you to function as a bridge for partnership between these contexts. It allows you to spot opportunities for collaboration as you have a deep understanding of the strengths, shortcomings and cultures of both sides. This is an interesting advantage in a world where partnerships and ecosystems are becoming the norm in doing business.
Benefit 3. It helps you build a distinctive career profile
As described in Benefit #2, picking up a side hustle can provide you with interesting short-term gains through new opportunities for learning and creating value. Yet, it can also create value in the long-term, at a career-level.
Like it or not, but competition is raging on the career ladder. While in some organizations and industries this competition may be more apparent than in others, it is always there. We see numerous people competing for a limited number of highly sought-after opportunities, whether this be more senior roles within the organizational pyramid or jobs at organizations with a highly sustainable or social image.
It is my belief that through your side hustle, you will create value for your (future) employer in entirely different areas than your fulltime employed competitors on the ladder. In this way, you are taking the linear career-building competition to a new dimension. You could call it ‘Blue Ocean career-building’.
Your career as an ocean
Blue Ocean Strategy is a well-known approach to business strategy that is about: “creating and capturing uncontested market space, thereby making the competition irrelevant. It is based on the view that market boundaries and industry structure are not a given and can be reconstructed by the actions and beliefs of industry players” (source).
Putting this in the perspective of a career, one could say that you can compete in the field where everyone else is competing, or can change the game by starting the competition in an entirely new field.
Red oceans are all the industries in existence today — the known market space. In red oceans, industry boundaries are defined and accepted, and the competitive rules of the game are known.
You are in the red ocean of career-building when you define your career to be what it is usually understood to be: drafting high-quality reports in time, achieving the highest numbers in sales, successfully closing as many customer service tickets as possible, or achieving the highest number of billable hours.
Blue oceans, in contrast, denote all the industries not in existence today — the unknown market space, untainted by competition. In blue oceans, demand is created rather than fought over. There is ample opportunity for growth that is both profitable and rapid.
And so, you are in the blue ocean of career-building when you are looking for new ways to add value for your employer and your future employers. This could be through bringing in new ways of working from other industries, coming up with initiatives for innovation, being the connecter for value-adding partnerships, and so on. From what I have seen, starting a side hustle appears to be a perfect medium for creating and owning a blue ocean.
Important to note is that Blue Ocean Strategy states that in order to create space and time for your differentiating initiatives in the blue ocean, you need to deliberately do less in the red ocean. This, for example, can be realized by working fewer hours (from 40 to 32 hours per week) for your employer, while at the same time focusing relentlessly on only doing high-value tasks. In this way, you are aiming to maintain the level of value you add while working fewer hours within this ‘red ocean’.
Benefit 4. It is a catalyst for new opportunities.
Seizing the opportunity of picking up a side hustle now can set you up for being exposed to an increased number of opportunities in the future. The main driver for this is, once again, your presence inside various contexts at the same time. As I see it, before one can grasp an opportunity, one needs to be aware of it and be considered eligible to grasp it. This all starts with being present.
As you may have experienced, your current employment exposes you to a variety of opportunities over time. These opportunities will arise naturally from changes inside your organization: restructuring, people who get promoted and leave behind a vacant position, international expansion, and so on. These internal opportunities are supplemented by the external opportunities that arise from your personal network.
A side hustle allows you to actively create an additional source of internal opportunities and to further expand your external network. You will be working with new customers, new partners and will be meeting new people at a much faster pace than you would with one single form of employment.
Being present in this additional context will help you become aware of new opportunities. Performing well in this additional context will make you eligible to grasp these opportunities. From here, it is up to you to decide whether you pursue these opportunities.
Benefit 5. It can create an additional stream of income
So far, I have illustrated how a side hustle can create enormous value to your working life by adding a steep learning curve, short- and long-term career development, and new opportunities.
But what does it mean for your income? The short answer is: it depends.
- First, it depends on your goals for picking up your side hustle. Just as for regular jobs, the quality of your new adventure can be rated across a variety of elements: learning opportunities, new experiences, social impact, income, benefits, and so on. If your goal is to make a lot of money, then you definitely can.
- Second, it depends on your current skillset, the industry in which you work or intend to work, and the form you want your business to take. As a freelance consultant, I have found it to be fairly easy to significantly boost my income. It has low investment costs (none, actually) and it can pay handsomely. However, if I had started a webshop (higher setup costs, but perhaps more scalable over time) or had become a yoga teacher (probably paying less per hour), this would have certainly created different results income-wise.
A rule of thumb, based on my lessons learned, is that the more you leverage existing skills in a context that you are familiar with, the easier it will be to find customers that are willing to pay you. This is simply because it will be easier for you to create value for your customers from this position.
However, leveraging your existing skills in a context that you are already highly familiar with may not be what you are looking for in your side hustle. In addition to this, it may also lead you to compete with your current employer. In my next post, I will go deeper into the topic of identifying areas of opportunity in which you can kick-start your business.
An added financial benefit of a side hustle may be that an additional stream of income may make you less dependent on your employment income, and in the end may create more freedom. At the same time, by remaining employed you may be largely protected from many of the financial risks that fulltime entrepreneurs face (like the past financial, and current health crisis).
The potential drawbacks of having a side hustle
As discussed above, combining employment and self-employment can bring a unique set of benefits to your working life. Naturally, this unique set of benefits comes with a flip-side: a unique set of drawbacks.
Here is a list of four potential drawbacks that I and other people with a side hustle have come across.
Drawback 1. You may be working harder than before
From the moment you start your side hustle, you will be solely responsible for its performance (assuming that you start on your own). At the same time, the expectations around the quality of your performance from your employer may likely remain constant.
If you decide to pick up a side hustle without reducing the number of hours you work for your employer, then everything you will do in your side hustle will be piled on top of your existing workload. This can significantly impact your life — beyond just the working part.
If you decide to sacrifice a day of employment to pursue your side hustle, you may still end up working harder than before. The main reason for this, is that it may prove to be a challenge to reduce the workload at your employer so that it matches the reduced time you will have.
One of my interviewees, working for a Big 5 consulting firm, accurately illustrated this point: he had started to work fewer hours at the firm but somehow continued to deliver the same level of output by working more efficiently.
This is a phenomenon that I have come across multiple times, and have experienced to do myself as well. And while this may contribute to keeping your employer and colleagues happy, it also means less downtime and more intense working hours for you.
Drawback 2. You will need to manage many stakeholders at once
By starting a side hustle next to employment, you will be automatically creating an additional set of stakeholders that need to be managed throughout the week. This set consists of your prospects, clients and partners.
At the same time, while you will be out building your business, the work at your employer will go on. This means that you will need to keep up with progress all the time, while also managing expectations around your availability towards colleagues, customers and partners.
Drawback 3. You may not have the financial space
Taking the plunge from fulltime employment into fulltime entrepreneurship is often considered fairly risky from a financial perspective. In contrast, picking up a side hustle next to your employment can be considered fairly safe. Yet, even giving up a small part of your steady income may not be an option in your situation. In this way, your financial situation may determine your ideal approach to picking up a side hustle.
If your financial situation does not allow you to work fewer hours in your regular employment, then you might want to consider building your business in the evenings and on weekends. Once your newly started business starts to generate some income, you can consider taking the step towards working fewer hours for your employer.
However, if you can financially take the initial pay cut, then I would highly recommend doing so. Examples in practice have shown that freeing up one day per week to work on your side hustle may significantly increase and accelerate the positive effects it creates.
Drawback 4. It may take up additional headspace
The three potential drawbacks listed above all come together into this final fourth. By having a side hustle, you will be working in two different worlds at the same time. This means that you will be managing your performance, stakeholders and perhaps financial situation across two dimensions.
As you can perhaps imagine, this process may cost a lot more mental processing power in comparison to when you were having one single form of employment. My recommendation would therefore be, to consider postponing your side hustle plans if you are still on a very steep learning curve in your current employment.
Being more experienced at your existing employment keeps the overall learning curve manageable. This will increase your overall chances of making your a side hustle a success, while also allowing you to effectively put your newly developed skills and mindset into practice for your employer.
Benefits vs. drawbacks
The unique set of benefits that having a side hustle brings, comes with a unique set of potential drawbacks. By sharing these drawbacks beforehand, I hope to support upcoming side hustle launchers in proactively mitigating the potential impact of these drawbacks significantly.
In the end, it is safe to say that starting a side hustle may be a great opportunity for a wide group of professionals. It can potentially create new value in many areas, while coming with relatively small risks that can be largely mitigated when managed proactively.
Conclusion — the final takeaways
In the current paradigm of work, one is either a dedicated employee or a hardcore entrepreneur, each of these extremes having its own set of benefits and drawbacks. From my perspective, and that of my interviewees, having a side hustle — in this way combining forms of employment — deserves to be recognized as a new class of its own, bringing along its own unique set of benefits and drawbacks.
Up till now, having a side hustle was often seen as a temporary state in which one tests the waters before moving into full-time entrepreneurship. I have found that it has untapped potential for a wide audience as a more permanent state. This will bring forth a new, highly fulfilling approach to ‘work’ that can be sustained throughout a life-long career.
The benefits may go beyond the individual
Professionals, but not only professionals benefit from the side hustle:
- Professionals, as discussed above, can benefit greatly. It enables them to pursue their passion, creates new opportunities for learning and value creation, helps build a distinguishing career profile, functions as a catalyst for opportunities and creates an additional stream of income.
- Employers can benefit by facilitating their employees in starting a side hustle as a distinguishing and innovative means to attract, develop and retain (future generations of) talent. This may unleash new energy among their employees, who in turn transfer their freshly developed entrepreneurial skills- and mindset into the teams they work with.
- Society as a whole can benefit from a wide adoption of side hustles as well. It will enable professionals who may have an idea that can make the world a better place, to pursue this idea. Ideas, that otherwise may never see the light of day, because of the potential risks that come with fulltime entrepreneurship.
Starting a side hustle while you are employed does not have to be difficult, neither does it require you to take large risks. It is simply all about getting started.
You can turn the additional time you may have at this moment into something creative and valuable. For this, there are three steps you can take right now:
- Shape your side hustle idea by identifying a problem worth solving for your target customer. Get a deep understanding of this problem.
- Generate many potential solutions to this problem, and think about what your best solution could look like as a business.
- Test the potential of your business idea. Do this by talking with your target customers. In these times, people are more available for a quick online coffee than ever. So get the most out of it.
A hands-on guide to starting your own side hustle
To help you move through this process, I will soon publish a more comprehensive how-to guide for effectively starting and running a side hustle.
Ready, set, go.