How (and why) to treat your side gigs like businesses

Whether you want your side gigs to replace your day job or simply provide some extra cash, treating them like businesses can keep your finances better organized and help you work smarter.

“You can’t improve anything that you don’t track,” says Tiffany Grant, an accredited financial counselor and educator on her platform Money Talk With Tiff.

For example, Grant has driven for ride-sharing companies to earn extra income and help pay off debt. In hindsight, she wishes she would have tracked expenses, like gas and car repairs, in addition to revenue. That way, she could have better understood her profit — or how much actually ended up in her pocket.

“It’s important to keep track of that information so you can know, OK, is this really working?” Grant says.

Here are five steps you can take to approach your side hustle more like a business.

1. IDENTIFY YOUR GOAL

Entrepreneurs start with a business plan. Solopreneurs can do the same.

Think about whether you’re working toward a specific financial goal — like paying off debt or saving for a down payment — or want to increase your income on an ongoing basis.

“What is the exit strategy?” says Heath Carelock, an AFC, program director at the Financial Empowerment Center at Prince George’s Community College in Maryland and founder of Carelosophy Social Impact Solutions LLC. “Is this something you’re getting into because you want to get out of it? Is this something you’re getting into because you want to hang in there with it for years?” he recommends asking yourself.

If your side gig is meant to fund a goal, try to keep those earnings separate until you reach it.

If it’s meant to...