Side Businesses on the Rise as Cost of Living Climbs
A QuickBooks Small Business Insights survey found 22% of U.S. workers are starting businesses to boost income amid rising living costs. Here is what new fo
As everyday expenses climb, more Americans are turning to entrepreneurship to bridge the income gap. According to data highlighted by the QuickBooks Small Business Insights survey, 22% of U.S. workers have started or are starting a business to increase their earnings. If you are among those launching a side venture to offset the rising cost of living, getting your financial infrastructure right from day one is the most practical step you can take.
Separate Personal and Business Finances Immediately
The most common misstep for new side businesses is commingling funds. Using a personal checking account or credit card for business purchases makes it incredibly difficult to track actual profitability and complicates things significantly at tax time.
Open a dedicated business bank account and apply for a business credit card. Even if your venture is a sole proprietorship, keeping these funds separate ensures you can accurately measure whether your new business is actually offsetting your living costs.
Track Every Expense from the Start
When the goal is supplementing your income, every dollar matters. New business owners often lose sight of deductible expenses—such as home office space, software subscriptions, and mileage—because they fail to record them consistently. Setting up a cloud-based accounting system immediately prevents lost receipts and forgotten costs. For practical guidance on setting up your books, you can explore these QuickBooks Online help resources.
Plan for Quarterly Taxes
If you are transitioning from a traditional W-2 job to picking up independent income, your tax obligations will change. Side business income typically does not have taxes withheld automatically. You will likely need to make estimated quarterly tax payments to avoid penalties at the end of the year. Calculate a percentage of your business income to set aside immediately after every customer payment so you are not caught off guard when quarterly deadlines arrive.
Choose the Right Accounting Software Early
Spreadsheets might suffice for the first few sales, but they become a liability as your transaction volume grows. Adopting dedicated accounting software early helps you automate invoicing, reconcile bank feeds, and generate the profit-and-loss reports you need to make informed decisions. If you need broader assistance selecting or configuring the right platform for your new venture, our general QuickBooks knowledge base offers step-by-step troubleshooting and setup guidance.