If you’re like many Purposeful Hustlers, you’ve started (or want to start) a meaningful side project. Your intentions for the project might be to earn extra money, make a positive impact, or simply do something you enjoy. But what happens when your side project is so enriching that you decide to make it your full-time focus? How can you take the leap from side hustle to full-time gig?
Starting a business can give you greater freedom and flexibility, a stronger sense of purpose, and help you flex your creative muscles, but it often comes with risks. A major reason people resist converting their passion project into a full-time business is because of financial risk. And that makes sense, since many businesses fail within the first few years. To set yourself up for financial success and overcome other potential obstacles (changing markets, the fear of striking out on your own, etc.), it pays to come up with a solid plan.
Here are 4 steps for turning your side hustle into a full-fledged business:
1. View Your Side Hustle as a Test
If you’re serious about eventually turning your side hustle into a business, it’s a good idea to start treating it that way:
- Carefully track your expenses, your income, and the number of hours you’re investing in your project.
- Do your research and determine if you’re charging enough for your products or services.
- Identify your competition and determine if there is room in the market for your business.
- Do NOT give away your services for free (you’re testing the financial viability of your business, after all!).
- Explore options for scaling up your side gig.
If you’re not collecting data about your side hustle, you won’t be able to determine if it can become a viable full-time business, which leads us to the next step…
2. Explore Viability
Collecting data will ultimately help you determine if your side hustle will be viable as a full-time business. How much income is it currently generating? How much income does it need to generate for you to feel comfortable quitting your current job? Keep in mind, most businesses are not profitable in their first few years (a recent survey found that it took about three years before new businesses earned the same income as the owner’s last full-time job), and many rely on small-business loans or startup capital for a time.
However, you’ll need to eventually make enough money for your business to be a sustainable endeavor. To do that, you’ll have to scale up your business, so you’re able to take on more work. Is this realistic? Exploring viability means being honest about the future of the business. If you do see a potential for growth and a way to make a livable income, you can then begin to develop a business plan.
3. Lay the Groundwork
Starting a business involves a good deal of groundwork. You’ll have to register your business with your state and the IRS, create a website, and clearly define your pricing structure. You’ll also want to make sure your finances are in order (taking out a small business loan if necessary) and create a timeline for when to fully launch your business.
It’s also a good idea to create a business plan, which can help you:
- Pinpoint your mission
- Outline company goals
- Articulate your company’s structure
- Clearly define your offerings
- Identify your target market
- Discuss business promotion strategies and marketing.
It’s a good idea to start small and scale up. Ideally, you will continue working your normal job for a time while you build your side hustle. Or, you might consider taking on temporary part-time work while you grow your business.
Continue to check in on business growth and recognize when you need to scale up. For instance, if you run a flower arrangement business out of your home, you may eventually reach a point where it makes sense to rent a retail space, hire a part-time employee, or upgrade your equipment.
If you think it’s time to scale up, you might start by hiring a freelancer (someone to help with accounting, for instance, or marketing) or a part-time employee. If you’re still as busy as ever, consider bringing on a full-time employee or reaching out to another freelancer. Identify growth opportunities and move into those areas incrementally.
Turning your side hustle into a full-time business takes more than a leap of faith—it also takes careful planning, honest reflection, and regular maintenance. Although you may put in some long days (and weeks, and months…), your efforts will pay off if you take the time to develop a plan, create smart strategies, and ask for help when you need it. Remember, most businesses are not profitable right away, so take your time, scale up slowly, and don’t forget to enjoy the ride!