You might have dipped your toe into uncharted waters by using some of your precious spare time to investigate the viability of a money-making pet project. And, if you’ve been fortunate enough to achieve some success, you might be pondering whether or not to register your company and pursue it full-time.
To understand if you’re ready to take the next step, you’ll have to navigate periods of uncertainty.
But, if you’re truly determined, believe in your product and service, and you’ve taken the time to understand your target audience, you might be ready to take the plunge and dive into working full-time on your very own independent venture.
How to know you’re ready to go from side hustle to small business
There are a few main points you will need to comfortably tick off that will help you determine if you’re ready to go full time.
So in this article, we’ll be covering the following factors:
- Do you have a financial safety net?
- Is your budget properly prepared?
- Do you have everyone you need?
- Do you have the right level of trust?
- Are you prepared to have your passion tested?
You may have answered those questions as you went through them quite easily. But as you’ll see there’s a lot more you need to think about before answering.
So let’s get into it.
1. You have a financial safety net
Central to the allure of a part-time gig is the understanding that if it doesn’t work out – it isn’t as profitable as you hoped it’d be or it isn’t as rewarding as you’d first thought – you have the freedom to abandon it without fear of your finances being seriously hurt.
Tending to your passion project without making money simply isn’t realistic for the vast majority of aspiring business owners. Ultimately, if you don’t have a solid financial platform from which to build your business, making your side hustle your permanent job might not be feasible.
It’s a steep bar for entry but a necessary one. Resources determine your ability to weather any obstacles that come your way (expected or unexpected). Whether it’s a disappointing setback, the lean, barely-profitable weeks that plague any fledgling business, or a simple oversight.
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You must expect mistakes to be made when you’re running your own business and solid financial backing gives you the wherewithal to rebound from any errors. If you’ve been running your side project whilst employed, you may have had a chance to build a safety net that puts you in a much more comfortable place to launch fully.
2. Your budget is ready
Turning a passing interest into a full-time job isn’t something you can do on a whim. It requires a tremendous amount of financial planning. You need to take the time to set precisely defined budgets and be disciplined enough not to make changes to them as time goes on. Financial mismanagement is the biggest factor in the downfall of new businesses.
When you’ve invested your very own money into a project – your life savings may well be on the line – it is all too easy to panic when something doesn’t go right. You have to resist the temptation to dip into reserves of money you can’t afford to spend.
You have to have concrete confidence in every move you make. At times, you’ll even have to go through painful cost-cutting exercises. Look after the pennies and the pounds will look after themselves.
3. You have the right people around you
When you’re a relative beginner in a field, it is always worth looking up to someone with more experience for guidance. Good leaders are aware of their flaws and blind spots and are mature enough to admit when they need help from someone with a more nuanced understanding of a particular topic.
Finance, strategy, marketing, human resources, technology, and operations are all fundamental aspects of any business. So, it’s unlikely that any one person has the encyclopedic knowledge needed to run one on their own. That’s why it is so important to build a team of experts.
When your business is also your passion, it can become all too easy to develop tunnel-vision. When you’ve spent months and months developing a tailored marketing strategy, zeroing in on what you believe to be the perfect strategy for capturing sales, it can be difficult to part with it if it isn’t proving successful.
You have to be humble enough to admit when you’re wrong and look for help from others. Forming a circle of trusted advisors gives you a group to bounce ideas off of, and helps you keep on track when you’re too emotionally invested in one particular route to success – preventing you from throwing good money after bad.
4. Achieving a level of recognition in your chosen field
Whatever recognition looks like in your chosen field, you need to start to attain it consistently if you’re serious about making your side-hustle a full-time job. Nods of approval from close friends and family aren’t enough. You need to generate brand awareness and positive reviews from totally impartial parties.
Once you start to see that recognition filtering back to you – via happy customers, peer reviews, or the endorsement of a respected industry leader — you can start to think about branching out. The unwavering support of a core market segment is the bedrock of any successful business. And word of mouth spreads quicker than ever in today’s hyper-connected world, underscoring the importance of understanding the quality of your product or service.
Additionally, having have friends in the right places can really help with the early stages of growing awareness of your brand. If you’re starting a burgeoning hair and make-up empire, for example, you’ll want to understand the ins-and-outs of Instagram. Showcasing the work you’ve done for a few influential clients can rocket your business from obscurity to notoriety.
5. A passion for what you do that will sustain your business through good times and bad
Countless successful businesses have started as unsuccessful ones. Even the most profitable organizations in the world have had to endure fallow years when they were starting out. Amazon, the world’s largest online retailer, didn’t turn a profit until 2001, seven years after it was founded.
So, if it is what you really want to dedicate your time to, you have to be certain that it’s something you really love. It’ll keep you motivated through difficult times.
You have to be able to accept that there will be teething problems and you have to be headstrong enough to work your way through them. Keep a growth mindset and remain confident that success lies on the other side.
On average, it takes entrepreneurs three years to accrue the same annual salary they received at their former full-time job. Sacrificing the position you’ve worked years and years to attain is no small feat. For many people, giving up that kind of hard-earned progression is really difficult to stomach.
It’s a serious test of your mettle. And, if it isn’t something, you’d be willing to do, you have to worry about the strength of your commitment to turning your side-hustle into a full-fledged business.
There are so many things to consider before deciding whether or not you’re ready to turn a private passion of yours into a very public, full-time occupation.
You have to spend time interrogating the depth of your desire to make your own business a success. Sometimes your hobbies are your hobbies for a reason. When that thing or preoccupation takes up the bulk of your time, you might find that you don’t enjoy it as much.
A very real passion for what you do has to be your number one priority when deciding whether or not to take the next step.
A debilitating setback, a crisis in staffing, a financial withdrawal – any problem can be weathered through sheer force of personality. If you want it badly enough, you’ll do what it takes to make it happen.