How to Negotiate a Raise vs. Start a Side Hustle: Choosing the Smarter Path for Your Income

At some point when you work for a company for a while you can wonder if you should build something of your own.

Sometimes, when you feel undervalued at a company you may transition to a new venture of your own.

However, both require work and different outcomes.

In this guide I’ll break down each option that way you can figure out what makes sense now.

The Core Difference

Negotiating to receive a higher pay for your value you give to a company.

A side hustle builds a foundation and income if down correctly outside of your job.

When Negotiating a Raise Is the Smarter Move

Depending on the company you are at you can negotiate a raise.

Here’s when you should prioritize getting a raise:

• When you take on more tasks that wasn’t in the role you applied for.
• Your salary is below the market rate.
• You bring measurable value to the company.
• The company is stable and running
• Have a manager that values their workers.
  
  

How to Negotiate a Raise (Without Guessing)

Be strategic when you ask for a raise.

Step 1: Build a Case for yourself.

Take note of how you benefitted the company. Keep track of the dates for your records. Give details (metrics, what happened, what the results were, etc.)

Step 2: Know Your Market Value

Do your research.  Know how much people are paid in your industry and the location.

Step 3: Time It Right

Ask for a raise when:

• You did something that was for a win for the company.
• You receive performance reviews
• Taking on more obligations for your role.

Don’t ask when:

• Budget cuts
• Layoffs
• After mistakes were made

Step 4: Be Direct and Professional

Be intentional about what you want and give clarity on why you deserve a raise.

The Limits of Raises

• Company budgets
• Your income is tied to one employer
• Salary increases are incremental

A raise alone may not solve all your financial needs.

When a Side Hustle Makes More Sense

Side hustles allow more income diversification and control. 

Consider doing a side hustle when:

• Salary growth is capped
• You have monetization skills
• Control over your income
• Financial independence

You want to create new opportunities for yourself.

The Reality of Side Hustles

Side hustle takes work. 

Not giving up and being consistent makes all the difference.

It can require your:

• Time outside your work
• Trial and error
• A mindset of not giving up

When you begin your side hustle know that it will take time.

The Hybrid Strategy (Often the Best Choice)

It’s not a final decision.  Rather it gives you an opportunity to have a little breathing room with a raise, reduces the pressure of figuring out your side hustle, and you learn how to diversify your income.

How to Decide (A Simple Framework)

Ask yourself:

• What is my long-term goal?
• Will I have time to do things outside of work?
• Do you only want to rely on a raise for how many years you plan to work at the company?
• Does your company allow stability?
• Do you want freedom to make your own choices?

Common Mistakes to Avoid

Being afraid to go for what you want.

Stop letting fear get in the way of reaching your goals.

Undermining your value.

Don’t underestimate what you are capable of.

No clear plan in place.

Knowing your end goal and the steps you plan to take to get there is crucial.

Not pacing yourself.

You’ll be burned out which will lead to discouragement in yourself.

Final Thought Negotiation versus doing a side hustle

Strategically plan your next moves.  

A raise benefits your current situation.  Whereas a side hustle creates a wide range of possibilities if you put in the work.

Do things that align with where you want to be in life. 

Believe in yourself and trust your intuition.