How much does it cost to start a side gig?

So you're thinking to start a side gig. Congratulations! Whether you are trying to pay off debt or just trying to fully fund your savings account, a side gig can help you reach your financial goals.

But be aware: There is a grain of truth to the old adage, “You have to spend money to make money.” Exactly how much money are we talking?

The cost of starting a side gig depends on several factors, so let's explore some of the costs you are likely to encounter regardless of your new business focus.

Cost 1: Starting an LLC

[Disclaimer: I am not an attorney or tax professional. Investigate before deciding what's right for you!]

For most businesses, it pays to start an LLC (though, depending on the nature of your side gig, another type of corporate structure may be beneficial or even necessary). Why? It's actually right there in the name: “LLC” stands for “Limited Liability Company.”

If you route your business expenses and income through an LLC, it separates your business from your personal assets. This means that, if something bad happens (like getting sued), your personal bank accounts, home, etc., aren't at risk. If you don't have an LLC, then you are generally categorized as a sole proprietor, which means everything you (and maybe your spouse) have is potentially on the line if something were to go wrong.

How much does it cost?

If you're into self-sufficiency, you may be able to figure out how to file the paperwork on your own. On the high end, you could hire an attorney — and if you need something really specific, you might have to do that.

There are also legal service companies that can walk you through the process. Assuming you go this route, you can expect to pay $150 plus any state filing and related fees. Let's call this $200.

Cost 2: Opening a bank account

Once you've started an LLC and applied for an EIN (employer identification number) from the IRS, you're ready to open a business checking and savings account. Skipping this step defeats the whole purpose of applying for an LLC in the first place, so make sure you do it!

How much does it cost?

That all depends on where you decide to open an account. I debated between a bank and a credit union and, in the end, chose a local credit union with a $100 minimum balance checking account, no minimum requirement savings account, and no monthly fees. Your mileage may vary, depending on what you want to do. Although my savings account doesn't have a minimum balance requirement, I did need to put at least $5 in at the time of opening.

My cost: $105

Cost 3: A web domain, site design, and hosting

Like the other costs, this can vary widely depending on how fancy you need (or want) it to be. It's a good idea to at least buy a domain as soon as possible in case you need it. Domains can cost as little as 99 cents but can go into the hundreds or even thousands of dollars.

Simply owning a domain is only the first step. For your site to appear on the web, you need hosting. On the low end, this costs about $4 per month. Typically, you commit to a year or two of hosting and can pay as a lump sum.

Next, you need a site design. This is also on a sliding scale depending on what features you choose. There are bundles that allow you to easily customize basic sites, or you can have someone design one from scratch. On the low end, $6 per month.

How much does it cost?

Let's call this $10 (domain) + $48 (one year's hosting) + $72 (one year's site design) = $130

Cost 4: Varies by product/service

Additional costs vary by the product or service you'll be offering. Do you need to buy raw materials? Are you expecting to hire out tasks like t-shirt screening? Is a special license or certification needed to operate your new business legally? These all impact your bottom line, and should really be addressed in a business plan to make sure you will operate at a profit — but that's a totally different subject for another day!


If you go with the minimum costs above and don't need anything else, by my estimate, you're looking at a cost of at least $435. It's pretty likely your actual costs will be, but I think that depends more on what you are doing.

Have you started a side gig? What was your initial outlay, and what did you spend it on exactly?

More about...Planning, Side Hustles

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