During an economic downturn, many of us are looking at ways to lower costs and/or make more money. One solution for some professionals and workers is to consider launching a side business.

A side business differs from a small business in that it normally doesn’t demand the full-time commitment that a small business requires. You are in control of how much work you want to do and, of course, when you do the work.

A side business is still deemed “self-employment” by the Internal Revenue Service. You do not have to carry on regular full-time business activities to be self-employed. For example, if you are employed full time as an engineer at a local winery and you fix televisions and radios on the weekends, you are essentially self-employed as the owner of a part-time repair shop. This makes you responsible for taxes associated with the earnings. For more information on tax implications go to www.irs.gov/smallbusiness.

A side business can have many benefits, a part from the extra cash that you bring in. A side business is a wise use of time, especially on weekends or evenings. It can give you independence and self-esteem you often may not get working a 9-to-5 job.

A side business can be a great opportunity to learn about marketing and get your feet wet before you take the plunge on a bigger business. You may be able to show tax deductions for your business that help to lower your overall tax liability.

 Here are a few steps to consider when starting a side business:

• Identify your talents and skills and match them to the business you want to start. For many this starts as a hobby, an area in which you are truly passionate, knowledgeable and skilled.

• Determine if anyone will buy your purchase or service. Is there a “need to be filled?” How often will they buy your product? What are they willing to pay?

• Determine if you can make money in this venture. It is critical to clarify whether or not a business can be profitable before money is invested. Analyzing the break-even, the point where the amount of resources invested in the business is equal to the amount of revenue return, is a critical step for any businesses.

• Figure out if the timing and the “environment” are optimal for launching your side business. I advise checking in with your spouse and family to see if they are supportive.

• Determine what you are willing to risk. There is always some risk to starting and operating a business, no matter how small. If your side business mimics the daily work you do at your 9 to 5 job, you may have a conflict.

• Develop a plan. After you’ve determined that the business is feasible, seek assistance to develop a short plan for the local Small Business Development Center. For a side business, the plan doesn’t have to be extensive, but it should cover the basics.

• Utilize all your possible resources to launch your side business successfully.

The SBDC offers monthly start-up orientations for a minimal fee. Call the Napa Valley College SBDC at 253-3210.