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Some business owners want to extract every single waking hour from their employees. They feel that if an employee has a side business it is taking away from their 9-5. But that couldn’t be further from the truth. By supporting your employees’ side businesses you gain tons of benefits.

Reduces Training Cost

Whatever your business may be, there is a direct correlation between how much expertise the employee has and the value they generate. That is why investing in continual education in your employees pays massive dividends.

One way to do this is by supporting your employees to start their own side business. Owning your own business is the best personal development course you can buy.

Jack Choros CEO of IronMonk a digital marketing agency said it best “Many of our staff writers have freelance side hustles outside of work. We support them as long as they are not writing content for direct competitors.

The reason we do this is because we understand that a valuable freelance client can enrich not only our employees’ wallet, but also keep them engaged in perfecting the craft of writing and becoming better at their jobs.

We count on our writers to cover a wide variety of topics for our local business clients which includes having an in-depth knowledge of all kinds of verticals and being versatile. Allowing our writers to work as freelancers and supporting what they do is a way of making them better employees without us having to pay for extra training.

It essentially means they getting paid to continue learning and they can bring those things that they learn back to their job from Monday to Friday.

Creates Massive Trust and Loyalty Employees

Every time a business replaces a salaried employee, it costs 6 to 9 months’ salary on average. For a manager making $40,000 a year, that’s $20,000 to $30,000 in recruiting and training expenses.

Cash flow is already strained to the max right now. Losing valuable efficient employees can sink your business. Why not create massive loyalty by supporting them in these tough times.

Willie, founder of The Product Analyst, shares a story of how doing so turned around and benefited him.

Willie encourage an employee to market their small food businesses in the office and support local businesses. He knew how tight everyone’s budget is during this pandemic, and it’s true that their salary might not be enough to cover all those extra expenses. It’s good to see that employees are very resourceful in finding ways to earn money. Supporting them through a simple purchase motivates them to juggle both jobs as well. Thus, giving them another market may seem small, but is pivotal in terms of their small business creating loyal customers.

Alicia’s small pastry businesses expanded in the office, and she is now catering to everyone’s pastry needs. She is a corporate wellness expert in the company and is now our pastry supplier. We usually give gifts to clients too, and with Alicia’s pastry business, we now get to have an inhouse supplier again.

James Shaffer of Insurance Panda shared a delicious story: One of our social media managers brews and bottles his own craft beer. It’s called Hop Daddy and it’s starting to be sold at local restaurants, bars, and liquor stores in our area (NYC).

We’ve always supported our employee’s side-hustles (as long as they don’t interfere with work), but the perk of this one particular one is that it’s delicious! Every Friday at our office is Pizza-and-Beer-for-lunch day, so I make sure to buy a few cases of Hop Daddy from him for our team to enjoy while they work.

As an employee these small side benefits become massively important. Life is stressful and knowing that your boss has your back creates as Simon Sinek says a circle of safety

A Side Business Diversifies Your Offerings To Your Clients

I think we can all agree that being nimble and having multiple streams of revenue is of critical importance. Overnight an entire stream of revenue can collapse. Investing in your employees’ side business can help you diversify your offering to your already existing clientele.

For example, Jay Scott founder of Pugsquest shares how he is growing his company through his employees. One of my employees offers baby-sitting and dog-sitting services during his free time. I have often hired his help whenever I needed someone to look after my kids and pets. This works out especially well because some babysitters may not be good with pets thus raising some complications.

However, with my employee’s experience with both kids and dogs, I feel very comfortable giving him the job whenever the need arises. I also let clients know that they can get a reliable dog-sitter from our team when they ask for my recommendation.

I do this first because I have also been in his position when I was younger. I understand the need to make an extra buck, so I try to support him as I wished people supported me in the past. I also do this because it feels better to hire help you know as compared to leaving your children and pets with a total stranger.

Supporting his side hustle has been good for my company because most clients like getting all or most of their services and products from one place. Whenever they find out there is a dog-sitter available, they give the company a high rating and even bring new clients in, which increases the sales of the company. I try to give the employee a form of commission whenever I learn that a new client came in specifically looking for a dog-sitter, but ended up buying some of our products.

Increases Motivation With Employees

Motivated employees outperform every goal they set their mind to. As a business owner when you support a side business of an employee they become motivated not just for their side business but for your business as well.

There are countless examples of this, one such is from Greg Shuey CEO of

“”I always support when one of my employees wants to set up a side hustle because the benefits are for everyone. One of my employees started her own e-commerce business selling baby clothing. She has been able to test tactics on her business and then share those processes with the rest of our team to then use for clients to find more success. The benefit is not only to our client, but the employee is more engaged in her own learning of marketing and that passion is brought to work every day”

Create Outstanding Referral Partners

One way is to diversify your offerings to your clients but sometimes it’s just simply better to refer work to your employees side business. Sure you don’t take in that extra revenue but what you get on the other side is a referral partner that is second to none.

As Maria M. Barlow shared with me

“I am a lawyer and own my own firm. My current paralegal has a paralegal business. I send her many referrals for paralegal work and notary services. I know that she does a good job and those in need are looking for good services. It is a win win for all involved. I believe that my supporting her business helps her continue to support my business and we can both grow and make money.”

Adding my two cents in here, I’m 100% positive this helps Maria’s employee become a massive advocate for her boss and refer work back up the chain.

Increases Revenue in Your Business

Yep, I said it. The most obvious benefit in letting your employees have side hustles is it increases your direct revenue. All of the examples I’ve shared so far have touched on this in one way or another. But the best example is when you can track that big sale directly to your employees side hustle. That is what happened for Brian Robben CEO of Robben Media.

“I let my #1 most important employee run a fashion styling business on the side. Being a marketing agency, my reasoning is that she gets inspired, builds her creativity muscle, and makes new connections during her side business efforts. That’s why I often allow her to do it on Fridays or afternoons, that otherwise she’d be required to work. Through her work, she’s developed relationships that have helped us sign huge marketing retainers. Plus, she’s overall happier when allowed to pursue her multiple passions. It’s been a tremendous decision.”

Expand Your Values & Trains The Entrepreneurial Mindset

A leaders job isn’t to get down in the weeds in the business. A leaders job is to inspire those around you to understand your vision, values, and set the direction. By supporting your employees side hustle you can be a more effective leader.

As Chris Kaiser of Click A Tree explains “People are motivated because I allow them to pursue their passion.

Should one or two of them be successful and turn things into a

fully-fledged business, good for them. If I did a good job as leader, they

will have taken on many of my values, which then they’ll instill in their

company. Hence it basically helps me to spread my vision and ideologies further.

They often also learn to think like an entrepreneur, which helps me greatly explain to them why we do things the way we do. It’s a huge difference working with entrepreneur-minded employees than working with employee-minded employees. The former understand the needs of the company, the latter mostly care about their own benefits.”

Overall, there are a ton of benefits to supporting your employees in their side business and side hustles. It can be as simple as helping them with their elevator pitch, being their first client, or just allowing them the freedom experiment on your dollar. The way of the future is a humanistic approach to business and treating others with respect. Let me know in the comments if you are a business owner who supports their employee’s side business.