How to take into account a very uncertain/instable Side-Income?

[RandomGuy]

I have an online side-Business since 2012, which gives around 1.000 Euros after taxes per month. It is mostly passive, I would go on with it even when "retired", but the income is factually very uncertain, because it is an online-business with only one very large business partner. For my business model, there is no alternative to this one business partner. So, from one day to another, I could lose 100% of the income. On the other hand, I am doing this stuff since six years, so it would be unlikely that it gets shutdown tomorrow.

How should I take this into consideration? I could do so as if that income does not exist, but then I would likely amass a lot more money than needed. I don't want to work more as needed.

On the other hand, if I take it into account as given and then I really lose this money, this would mean I am busted.

1.000 EUR per month means 12.000 EUR per year after taxes, which is around 16.000 EUR before taxes. 4% rule applied means 400.000 EUR needed to replace this income.

I am more or less living in an area of Europe with lower-than-average costs of living, so 1.000 EUR after taxes is quite some money here.

[robartsd]

You need to consider several factors.

How does your business partner profit from your side-business? Understanding your business partner's business model related to your side business is a key component to forecasting your part of the business.

What kinds of jobs could you get if your side-business dries up and you need to go back to work? Would your skills in your current main job be too out of date to return? What transferable skills do you have and what kinds of jobs are available if you were looking for a career change.

How would you feel about returning to work after a long(ish) break? It should be easy enough to explain to potential employers that you ran your business but the opportunities changed so you are looking for work. It might be less easy to convince yourself that this is just a change in plans, not a failure.

In any case, I would not plan on the side-business as a perpetual income opportunity. After considering various factors, I'd decide how long I want to plan on the side-business continuing then consider backup plans for if it doesn't last long enough. I wouldn't completely ignore the income, but I wouldn't plan on it forever either.

[HipGnosis]

Not much to go on, so...

Money can be taken 'into account' in multiple ways, and you don't say what way you're asking about.

Not all income is certain for most people.  There is over-time and bonus'.  But not all expenses are stable; auto and home repairs, health care deductibles / co-pays, etc.
The most common way to 'account' for them is to calculate the average and hedge a percentage that gives you peace of mind.

In the months that you take in more than your average, stock up on things you use regularly that don't expire or perish. 
I have a list  of things (on my computer) that I'd like to buy that can wait until I have discretional funds.  Having it on the computer makes it easy to re-sort to suit changing priorities.

[Laura33]

I have experienced this kind of situation (one fixed salary, one highly-variable income), and what worked for me was this:

First, set your basic living and savings requirements based on your fixed income.  This is the budget that you could live on forever and still meet your savings goals if that second income goes away tomorrow.

Then allocate that extra 1K to "extras" that make life nicer.  That should include extra savings to reach FIRE faster, but it can also include lifestyle extras that don't fit into your basic budget.  I tended to do this in tiers, e.g., maybe the first $200 extra goes right to savings, the next $100 we could use for going out, the next $200 after that was more savings, etc.  But you can also just decide every month based on what's going on in your life.

Then, on a month to month basis, you look at how much money you brought in during the previous month, and allocate it to those various extras based on the priorities you previously laid out.  That way you know that your basic expenses are covered no matter what happens to the side hustle, and you also know that you can afford whatever extras you buy with the side hustle money, because you are only spending the money you have already brought in.