What is the Difference Between a Side Hustle vs Small Business

side hustle vs small business

side hustle vs small business
Many people use the words side hustle vs small business interchangeably. And while sometimes they can mean the same thing, most of the time, they are entirely different. A side hustle is primarily characterized as a job you take in addition to your current job as an additional source of income or pursuit of a hobby.

On the other hand, a small business is typically a smaller company that you start and fully invest your time and money as a full-time job.

When it comes to side hustle vs. small business, both are great options if you are looking to start paving your own path.

Here are some of the top characteristics of side hustles and small businesses to give you a clear sense of what it takes to run each.

1. Side Hustles vs Small Business Difference – How Much Time Do You Need to Put Into It?

One significant difference between a side hustle and a small business is the amount of time needed to put into the two. Time is one of the most important factors in life, so you must determine what you want to achieve.

After all, everything takes time, and you have to prioritize the things you find important to you and your financial freedom.
A side hustle is mostly about using whatever extra time you do not spend at your main job trying to grow your hobby into a profitable additional income.

Side Hustles vs Small Business difference
Whether you have plans for expanding your side hustle into a small business or plan on keeping it as a side income, you will definitely need to put a reasonable amount of time into starting a side hustle.

  • First, you will need to identify hobbies or things you could do to earn some extra cash.
  • Then the hard work begins. Afterwork, you will need to put many hours into launching your new job, gaining clients, customers, or preparing the products you will be selling. And a lot of the time, the amount of money you make from your side hustle is directly related to the amount of time you put into it.

For example, if you are a tutor making an hourly wage, the more hours you tutor students, the more money you will make. But it is important to remember that a side hustle is mainly done in your spare time apart from your main career. This will leave you less time to work on your side hustle than a small business where you are self-employed.

Small businesses require a much larger time commitment than side hustles. This is because a small business is likely to be your full-time job. As a small business owner, you will be like to put all of your time into making sure your small business succeeds because if it does not, you will not have enough money to make ends meet.

Another reason why small business owners put in long hours is that it is likely that their business is their passion. The pressure of succeeding and the desire to follow one’s passions can be significant factors when it comes to how much time small business owners put into their business.

Related: Become a Business Owner With These 7 Steps

2. Side Hustles vs Small Business Difference- Investment Needed

Small Business funding
Side Hustles vs Small Business difference – Initial investments are often what stops people from pursuing their goals and passions for being entrepreneurial. But the truth is, side hustles and small businesses do not always have to be expensive. You can also always start small and invest more and more money as your business expands.

In fact, side hustles require very little investment costs. A few examples of side hustles that do not need an initial investment include freelancing for other companies or piecework, which is selling a specific service at a fixed price.

Freelancers can either run their own side hustle and find clients through previous connections, or they can sign up for free websites that connect freelancers with clients.

Many side hustlers are even able to run their side business from home. Nowadays, all you need is a laptop and some internet service, and you can earn a parallel income, or even surpass the income at your main job.

When it comes to running a small business, you can minimize your initial investment by doing most of the work yourself rather than hiring lots of employees to help. Lowering your labour cost can save your investment for higher quality products or even for a better location with higher rent.

Your initial investment will always need to include the cost to make your product or run your service, making you need to earn the money you initially spent back before you can even make a profit.

Small businesses can also be run out of your home to cut costs and allow you to see if you can make a real living from your passions before you spend all your savings on a business that may or may not succeed.

Although small businesses definitely require more investment than side hustles, they will likely have a larger return if you create a successful business plan and put in the time, energy, and money required.



3. Importance of Attitude and Level of Commitment

Business time commitment
Side Hustles vs Small Business Difference – Although side hustles and small businesses both tend to be built from a person’s hobbies or passions, the attitude and level of commitment also vary between a side hustle and a small business. When it comes to side hustles, there is much less commitment and the need to stay with the business if it fails.

This is because side hustles are only a supplemental source of income to your savings. Without your side hustle, it is likely that you can still pay your bills and support your lifestyle.

This gives those who have a side hustle comfort that if they stop enjoying what they are doing or are not getting as much out of it as they had hoped. They can stop the side hustle with little repercussions. In fact, if you get bored of your side hustle, it is even easy to quickly take up another.

On the other hand, many people put all of their savings into starting a small business that they have always dreamed of and they start their small business as their full-time job. This causes business owners a much greater level of commitment and responsibility since they need to rely on the business to make a profit.

Related: 20 Best Small Business Ideas to Start Under $100 – Low-Cost Start-Up Gigs

The income made from a small business is often time the sole source of income for the owner. That means, if you decide as a business owner that you no longer want to sell your specific product or service, it will be more work to sell your business and start over.

Besides the money aspect, many people put years into planning and building a business. Making it much harder to walk away from if it does not succeed. If you are looking for a low commitment project, starting a new small business is most likely not the way to go.

4. Side Hustles vs Small Business – Long Term Plans

Small Business long term plans

Side Hustle Longterm Plans
Whenever people start a new journey, especially one that involves money, an important question is what is the long-term plan?

Do you plan on having a side hustle for the rest of your life? Can your business eventually turn a profit? With a long-term plan, you can assess how realistic your goals are, and plan for how you want to tackle starting your own business or side hustle.

The long-term goal for every side hustler is different. Some people work a side hustle simply because they enjoy it and want to continue their hobbies, while others rely on the additional income to pay their rent.

Some people are also so passionate about their side hustles that they hope to eventually earn enough money to make it their career and quit their corporate day jobs. Your side hustle is valid no matter what your long-term plan is.

Here Are Examples of Side Hustles That You Can Find Online:

  • Content Writer
  • Professional Proofreader
  • Resume Critique Service
  • Pinterest Virtual assistant
  • Transcription business

These Side Jobs are perfect if you want to have a second job or even a full-time job from home with some extra income on the side. You will need to put in the effort to get these jobs (some more than others) but once they are running, they can be very good.

Make sure that your Side Side Hustle job offers a lot of variety because some of these jobs can get very routine and boring if they are the same over and over again.

Small Business Longterm Plans
The number one long-term goal for small businesses is of course, to make a profit! After committing to start your own business, the most exciting thing you can see happen is for your business to thrive.

By making long-term plans and following the process of building a business, you will be on your way to turning a profit in no time. Important steps to make sure you follow for your business to be successful in the long run include creating a separate bank account and deciding the structure of the business.

You must always remember to create a strong foundation for your business in order to support the success that is on its way.


The decision to launch a home-based business is one of the biggest steps you will ever make. Whether you are about to start a blog, tech company, crypto coin, a website, an Etsy shop, or any other type of online venture, chances are high that you’ll face some amazing opportunities and challenges along the way.

Side hustles are great for supplementing income, but they’re not an answer to the real question: “What do I want my career to be?”. The bottom line is that a side hustle is what you make of it and can be successful if done right.




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  1. Pingback: How to Start a Side Hustle - The Ultimate Side-Hustle Guide - Investadisor

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