What’s The Difference Between a Home-Business and a Side-Hustle?

I often see people promoting certain side hustles about making extra money from home, and I’ve noticed that what they call a side hustle, I call a home-based business.

Difference Between a Side Hustle and a Home Business

So this got me thinking about what the difference is between a home business and a side hustle.

With some exploration and note-taking, I came up with three main differences between a side hustle and a home business, which are:

  • Scale
  • Intention, and
  • Level of Commitment

Please note that this is just my personal opinion, as the differences could be subjective.

Some people could still insist that certain side hustles are indeed just side hustles and not home businesses.

But as you will soon see, a side hustle is forced to become a home business after a certain event.

Difference Between a Side Hustle and a Home Business

Scale and Intention

Side Hustle: A side hustle typically refers to a small, part-time job or project pursued alongside a primary source of income (like a full-time job). It’s often done to earn extra money, explore a passion, or develop new skills.

Side hustles are usually flexible and may not require a formal business setup. Also, it’s doubtful that you would create a business plan to start a side hustle.

Home Business: A home business, on the other hand, is a venture run from your home with the intention of generating income. It’s often more formalized and structured than a side hustle and I always encourage anyone who starts a home business to create a business plan.

The aim of starting a home business is for it to eventually become your primary or significant source of income.

Level of Commitment

Side Hustle: Side hustles are typically pursued on a part-time basis, often in your spare time outside of regular working hours. Side hustles may involve less commitment and risk compared to starting a full-fledged business.

Home Business: Running a home business often requires more dedication and time commitment. It may involve investing more resources, such as money, time, and energy, into establishing and growing the business.

Legal and Formal Structure

Side Hustle: Many side hustles can be informal and may not require formal registration or compliance with business regulations. However, this depends on the nature of the side hustle and local regulations.

Home Business: A home business usually requires more formalization, including registering the business, obtaining licenses or permits (if necessary), and complying with local laws and regulations related to operating a business from home.

Income Potential

Side Hustle: While side hustles can generate extra income, they may not always have the same income potential as a full-fledged home business. Side hustles often start small and may remain as supplementary sources of income.

However, with all the new possibilities available online now, there are many people starting small side-hustles which are turning out to be $2,000+ month incomes.

Home Business: Home businesses have the potential to generate substantial income and may eventually grow into larger enterprises. With the right strategy and execution, a home business can become a primary source of income for the entrepreneur.

$2,000 Month Part-time Home Businesses

What has become very apparent to me over the last couple of years, is that – thanks to the Internet – side hustles can easily and very quickly turn into $2,000+ per month part-time businesses.

So what starts as a simple side-hustle can grow exponentially over a short period of time, and is then forced* to become a home business because the side hustle owner is making a full-time income; and therefore must start paying taxes.

*I’m going to assume that you will be honest and declare your earnings to the IRS / Inland Revenue after you meet the minimum threshold.

Minimal Threshold

As of writing this, this is the minimal threshold you can earn before you need to start paying taxes:

United States: $12,950

United Kingdom: £12, 570

However, it’s not as straightforward as that, so you must get in touch with your local Government authority and find out how much you can make before you need to pay taxes, and also to implement any other legal requirements.

Part-Time Home Businesses

Here are some of the online business models where you can easily make $2,000+ per month, only working on a part-time basis:

Just make sure you choose a business model that is suited to you personally. Don’t just go for the money, as you need to enjoy the lifestyle that your new home business gives you.

To Summarize

In summary, while both side hustles and home businesses involve earning money from activities conducted at home, the distinction lies in their scale, intention, commitment level, and formalization.

Side hustles are often smaller, part-time endeavors pursued alongside other commitments, while home businesses are more structured ventures aimed at generating significant income from home-based operations.

Once your side hustle reaches the minimal threshold, and you need to start paying taxes, your side hustle has just become a home business – whether that be part-time or full-time.

Difference Between a Side Hustle and a Home Business