Taking Your Side Hustle Full Time - What you need to know
There has never been a better time to start a business! The gig economy is in full swing and is providing many people with opportunities to earn extra income and increase their standard of living. Some people are enjoying it so much that they wonder if they could do their side hustle full time, in place of their regular job. If that is you, read on to see some things you should consider before making the switch.
Store up cash in an emergency fund
This is a good idea whether you are starting a business or not. Having an emergency fund with three to six months’ worth of expenses is a game changer. It helps you weather any downturns in your business and be able to put food on the table even if the business doesn’t produce much one month, especially in the beginning. It also helps you to cover any unexpected expenses that crop up. Having cash on hand gives a sense of security to you and your family.
Creating an emergency fund is a lot simpler than it might sound (or feel!) and it’s the first thing you should do. Look at your budget, whether it’s personal or business, and always set back a specific amount each month for this. If you have any overflow in a month, tuck as much as you can into the emergency fund. Treat the emergency fund as a necessary payment to yourself and not just when you have “extra.”
Try to work both your regular job and side hustle as long as you can
Whether said in jest by a friend or seriously by a concerned loved one, the idea behind the advice “don’t quit your day job” is sound. Until your side hustle can fully support. However, until your side hustle can fully support you financially, you need to continue working a job that provides steady income. It’s even a good idea to continue doing both until you are almost at the break-even point.
Deciding what your personal break-even point is could include a variety of factors including your spouse’s income, your savings, and your ability to find ways to cut back on expenses until your side gig grows. You can also quit your full-time job and get a part-time job while growing your side business to its full potential. I recommend discussing this with your significant other and developing a plan together.
Understand the Investment
If you’ve already been doing your side business and it’s growing, you’ve likely already found ways to invest in the business. To go full time, you need to understand there will be further sacrifices. And, that while your skillset may be worth six figures, you may not make that much in the beginning no matter how hard you’re hustling and working.
In the beginning, most of the money the business makes needs to be invested back into the business. This helps you save up cash reserves, save for large purchases, and be able to pay the business’s bills as they come due. I do recommend paying yourself as soon as you can, but realize it may not be as much as you need to continue living the lifestyle you’ve become accustomed to. As I mentioned earlier, you may have to cut back on things in your personal life until the business can pay you as much as you want to be paid.
Avoid rushed decisions on when to quit
Starting a brand new business is a major undertaking no matter its size. New businesses are like new babies. They take up a ton of time and are much needier than you want them to be. Are they worth it? Absolutely! But realize it may be rough in the beginning. The decision to start a business is as emotional and gut-wrenching as it is logical. While we can calculate emergency funds and the amounts needed to live, there's not one single formula that will tell you if it's a good time to quit your job since there are so many different factors at play.
If you are dealing with any personal issues like a new baby, a major move, health issues, or major family issues (divorce, death), now may not be a good time to start a new venture. Of course, sometimes major life changes are exactly the impetus you need to begin something new. This is obviously an art, not a science. Use facts and financial figures but also follow your gut.
Get support
If you’re reading this blog, you’re likely already looking for best practices in running your own business full time. Good! I did too and I still rely on the advice from others in how I manage my business years later. For example, this article from Christy Wright is another great article about taking your side business full time.
In the beginning, you will be tempted to do as much of the work on your own as you can to save money. I get that, but also know that it’s ok to ask for help. One of my first blogs was about how to know when you should outsource your bookkeeping. Outsourcing bookkeeping and at least some of your marketing will let experts manage this part of your business while you spend time on the things you do best.
That’s not the only kind of support! Look for local and other resources to advise you on running different aspects of your business. You will also need emotional support. You will need friends who understand what you’re going through and why you might not be as available as you grow your business. I’ve made friends with fellow entrepreneurs and it has helped both of us in our business and personal life as we strive for that work/life balance.
Don’t be afraid to go for it!
Unless you are one of those very rare people who are super self-confident and have never uttered the word “nervous,” taking your side hustle full time can be scary. You’ll never feel fully ready and will probably always deal with some kind of doubt. (It’s called imposter syndrome and it is very real.)
Starting and running a business is hard but incredibly rewarding. Don’t let the fear of failure or criticism from outsiders (even if they think they are being helpful) prevent you from launching something. You need to give yourself and the business enough time to see if you can make it work. However, if you find that the business isn’t producing enough income for you to live the life you want to live, or if it’s taking way too much of your time, you can always close it and go back to working for someone else. I encourage you to stick it out but also develop your own gauge for when you feel like you’ve given it your best shot. There is no shame in trying something and not succeeding.
Let me help you run the numbers
As some of you might know, I used my skills working for others at first and realized I wanted to take my business full time for many of the same reasons you want to take your side work full time. I love the ability to be in charge of my schedule and to choose what kind of work I do. I’d love to help make you and your new venture a success!
If you have a side hustle and would love to make it your full-time gig, send me an email. I can help you look at the financial picture and see if it’s possible to do it full time. As a small business owner myself, I know the emotional side of making this major decision. In short, I’ve been there, done that, and I can help you do that, too.