Profitable Side Projects
Are side projects worth it?
That’s a question I used to struggle with.
Focus, focus, focus! Work on one business and give it all your time and attention. Don’t let up on growth. Avoid shiny objects. In theory, this is all solid advice.
Yet, year after year, I always break off time for side projects. I used to feel guilty about this. But now I’ve come to realize their value. Side projects have proven to be highly profitable for me and my core business.
Today I’m sharing my thinking behind how I use side projects to fuel my work as an entrepreneur.
The cost of side projects
Before we talk about what you can gain from a side project, it’s important to acknowledge the very real costs, or risks, of pursuing a side project.
Any time you put into a side hustle is time you’re taking away from your primary business. Even if you’re not spending much time on the side project, there’s always “mindshare” time that goes unaccounted for (a.k.a. time you spend ruminating on the idea when you’re not actually at your desk working on it).
Ideally, your core business has some level of systems and processes in place to keep running and generating income, even when you’re not working in it. I teach lessons in process and scaling in my Productize training (free and paid).
It’s also possible that a side project drags on for too long, or has unexpected scope creep, which requires time and effort far beyond what you initially committed yourself to. We’ll get more into this below.
Profitability of side projects
Now, given those (very significant!) costs, how exactly can a side project be profitable?
A few ways. Hopefully your side projects benefit from all 3:
An obvious one. Ideally the project you take on will generate revenue now and in the future. How significant this revenue and whether it’s worth it for you is something to consider.
But the short-term revenue alone is far from the only consideration. If you base your decision to avoid a side project solely because the revenue pales in comparison to your main business, you might be missing something…
The side product can (and hopefully will) become an asset, which perhaps you can sell someday. I’ve had several side projects that made very little revenue while I was running them, but I was later able to sell for a nice (unexpected) cash infusion.
Cash is not the only way to profit though. These next two are where the true payoff really lies:
If you’re not learning, you’re not growing as a professional entrepreneur. And if you don’t pursue high-value opportunities to learn—side projects!—you’re missing out.
Learning a new skillset, or refining one, is a great way to use side projects. All of my side projects last year helped me learn and level up my ability to code software.
Another way to learn is to experiment with a new strategy you haven’t used before. One of my side projects, a software product I built called Sunrise KPI, was my first time experimenting with the freemium pricing model. You can get a feel for how you might (or might not) use these strategies in your other work.
You don’t know what you don’t know.
Side projects help you uncover those elusive insights. A side project can be your entry to a new market, leading you to uncover customer pain points you didn’t know were there, and are ripe for solving!
A side project also helps you build experience you may have lacked. You’ll always improve, get better, and make smarter decisions after you tried (and probably stumbled) before. Side projects help accelerate that experience-building process.
Choosing a side project
In my notebook, I keep a running list of “shiny object” ideas. There are at least 30 of them in there now. 95% are ideas I probably will never do.
Here’s how I decide which ideas actually are worth doing as a side project. I choose to do projects that meet some or all of this criteria:
- I can start and finish working on this project in about one month.
- The project will continue to throw off returns (revenue, leads, awareness, etc.) even after I stop working on it. It becomes an engine, not a job.
- The product that comes out of it can be sold to at least some segment of my current audience. Not a totally separate market with zero overlap.
- I can leverage the side project in my current (or future) work. The skill, strategy or learning I gained can be used again, and again.
Fitting in a side project
How can you fit in the time for a side project?
It’s all about how you optimize your main business.
When you’re just starting out, your job or your consulting probably requires most of your personal time day-to-day. Consider spending a weekend or a week or two out of the year working on small side projects. Keep them small in scope!
Eventually, your business can afford yourself the freedom to dedicate an entire month to a side project. I found December is a great time. Things tend to slow down around the holidays, and you deserve to take a break from the routine and dive in on those fun, new ideas for a few weeks.
Further down the road, if you’ve focused on building strong systems, processes, and a team to carry them out, then you might choose to spend more of your year exploring side project ideas and doing more with them. In 2018, my main business afforded me the opportunity to spend most of the year learning to code and launching several new small side products.
At the end of the day, everyone is different. Some people I know excel at staying laser focused on their one business, and growing it year after year after year.
Me? I need to break up the year and shift between core and side projects. Not only because I find them fun and energizing, but because they definitely have been and continue to be profitable for me and my business.