Some of the biggest names in business today, like Apple and Facebook, started off as side projects by their respective founders. The co-founder of Udemy, Eren Bali, was working on a side hustle that developed software for creating a virtual classroom experience, all while freelancing as a web developer.
Some people may be content with a side hustle. Not everyone aspires to scale their business to the point of being a full-time entrepreneur. And not every side hustle can be turned into a fully-fledged business. For others, the ultimate dream is being able to dedicate themselves fully to their craft. The question is, how do you know when your side hustle has grown enough for you to transition into full-time business? The answer to that may seem obvious. When I’m making enough money of course! But it’s not that simple. There are many more boxes to tick before deciding that your business will endure through a harsh economy.
Here are four questions that will guide your decision:
1. What is the reason you want to leave your full-time job and run your own business? You need to decide whether you’re just trying to leave your current job because you’re unhappy or whether you actually want to be in business and push towards a goal you’re passionate about. Have you thought clearly about your vision? Your overall vision is what will keep you going during the challenges of business ownership.
For some, the answer may be in finding a better job and keeping the side hustle going. You may even find that your company is open to you working part-time. Many have gotten into business prematurely simply because they were not happy at their place of work and were using their business as a reason for escape. The reality is that entrepreneurship is not for everyone.
2. Are you ready to work harder than you’ve worked before? You might be looking forward to the flexibility of being your own boss, but you’ll need to put in more hours to get to where you need to be. Sleepless nights, long hours and less socialising are just a few of the realities many new business owners face. Aside from working hard to fulfill contractual obligations, you may have to work hard at learning new skills in order to meet certain demands. It may be a while before you are able to hire the relevant staff.
3. Are your earnings consistent? The earnings from your side hustle should ideally match or exceed your current income, or at the least be enough to cover your current living expenses.
You can test this over a couple of months in order to determine whether the earnings are consistent enough. Do you have future contracts lined up? Can you guarantee that one year down the line, you’ll still have business?
There are people who have stepped out into the business world holding onto hopes of more income, without anything tangible to assure them of the fact. It takes a certain level of faith to step out into entrepreneurship, but it also takes a certain level of income to keep you going.
4. How knowledgeable are you about business? You’d be surprised at how many people want to venture into business ownership without a basic understanding of taxes, contractual and legal issues and basic accounting. This is not to say you suddenly need to learn how to prepare financial statements or bank reconciliations, but you need a certain degree of understanding in certain areas in order to know how your business is performing.
Here’s a tough bonus question. Do you have a backup plan if your business fails? Failure is part of life and business is not immune from it. You need to get ready to fail a couple of times before you break through. And not everyone bounces back.
Also, not every side hustle can be turned into a full-time business, so before even looking to venture out into entrepreneurship, do enough research to determine whether it’s even worth it in the first place. You might love your product or service, but is it what people are looking for? Has it been tested in the market? Is it something people will continue paying for? And if it is, then perseverance, courage and commitment are just two of the numerous boxes you’ll need to tick before making it big in the world of business.
