There comes a point when almost all entrepreneurs need to make a decision – Is their side hustle ready for full time? Some are and some aren’t. Some businesses go on to flourish and others fail in the first six months. Knowing if your side job can support you on a full time basis is never guaranteed. But let’s take a look at some basic questions you can ask yourself before you quit your job and turn your side hustle into your full time hustle.
To make it easier, we will break down the conversation into four parts: Money, Mindset, Market, Career and Purpose. Take a look at each question and answer them honestly to yourself. (Suggestion – also ask someone who knows you well to answer these objectively on your behalf as a comparison.)
Checklist: Is Your Side Hustle Ready For Full Time?
- Do you carry much debt?
If you are already in significant debt, starting a full-time business now may not be the best timing. Work on lowering outstanding debts before opening your own business. Having little to no debt will help you retain necessary loans to fund your business’ startup costs. Plus, most businesses will be operating in the red during their initial stages – starting with a clean slate will be in your best interest.
- How much do you have in savings?
Financial experts recommend having at least 3-6 months of savings in reserve. This can be essential while your business is still pre-revenue or struggling to breakeven.
- Do you have a partner who can support you financially during the transition?
You, of course, do not need to be married to start your own business. But if there is a partner, parent or other safety net that you have access to that can help ease the transition from guaranteed paycheck to self-employment, it will make things easier. Even just having access to a health insurance plan will help alleviate some stress.
- Have you developed a solid business plan?
If you have not sat down and written out a detailed business plan (including mission, financial projections, marketing, market analysis, identifying target customer, competitive research and future growth plans), this needs to be done first. Working out all the kinks and details on your business plan WHILE you have an income makes the most sense. When you pull the trigger and quit your paying job, you want all of these details ready to go.
- Is your side hustle profitable at present?
Will you be making money from day one? If your side job is already paying for itself, you are in luck. If not, take the time to identify what steps need to happen on your side before you can reach profitability.
- Are you treating your side hustle as a business or a hobby?
Are you keeping track of all of your expenses? Is there infrastructure set up so that once you achieve scale, the business side of things is already running smoothly? If you have a shoebox full of receipts, you are not ready. Get your house in order with all of the accounting, budgeting and formal processes required before you set out full time.
- Are you obsessed with your business?
Successful entrepreneurs live and breathe their business. If you are thinking about it all the time, it is definitely a sign that you are ready to make the leap to full time. However, if you occasionally take breaks, work in spurts, or simply work on it when the mood strikes, your side hustle may be better off staying that way.
- Do you have a solid vision for the future?
To take your side hustle into a full time job, it will need to support you fully. Is there a clear path forward to achieve this? Where will your additional efforts go and what will be the main focus of your time?
- Does your personality sync with entrepreneurship?
This is a hard question, but you need to take a hard look at yourself. How do you deal with failure? Can you adapt or do you self-castigate? Will your drive carry you through hard times or do you tend to give up when things don’t go your way? Starting your own business is HARD. You will face many stumbling blocks along the way, but the way you handle them will make a difference. If you are naturally hard on yourself, you may be setting yourself up for mental health challenges.
- What is your work/life balance like?
We are firm believers in having a work/life balance. It’s one of our primary metrics in defining second act success. Take a look at your life now – between your ‘real’ job and your side job, do you have time left for yourself? If not, which job would hurt more to give up?
- Is your home life stable currently?
Launching your own business when things are troubled at home is a recipe for failure. Whether it’s your relationship, your or your family’s physical or mental health, or other ongoing struggles, entrepreneurs need at least one area of their lives to be sturdy. With so much up in the air while launching a new business, having a safe space at home to seek support can be critical to sustaining the energy needed to make your startup succeed.
- Are you ready to run with it?
If you switch your side hustle to full time tomorrow, are you ready to hit the ground running? Are there certificates, permits, real estate, continuing education, or other outstanding items that you need to complete before your business can launch? Do your best to complete these items while you are still employed, so you minimize time spent on paperwork and red tape.
- Are there unique external factors that make NOW the best time to launch?
The pandemic is just one recent example that changed the face of the marketplace. Look at Ariel Belgrave (Episode 8), who’s side hustle Gym Hooky went full time at the start of the pandemic. Focused on self care and working out at home, the unprecedented quarantine, working from home and gym closures around the country presented a unique opportunity for her business to launch. If you identify other market trends or outside influences that make your business ripe to launch, don’t ignore them.
- Have you talked to other entrepreneurs in your area or your field?
Launching your side hustle in a bubble is a mistake. Talk to other entrepreneurs in your community. Join a like-minded Facebook or social group. Bounce ideas off of others who are dealing with similar situations. Learning from others’ mistakes before facing similar situations yourself can help make your transition proceed much smoother.
- What is the current economic or market situation?
Launching a vacuum cleaner repair business may not make sense. Similarly, with everyone working from home, laundromats are closing down. Analyze the market trends and decide if right now is a favorable time for your type of business. If the demand is growing, it may be the perfect time for your side hustle to go full time.
- Are businesses like yours succeeding right now?
Competitive analysis is critical. Even if you think your business is unique, there are comparable businesses out there that can help you gauge market receptiveness to your new venture. Talk to owners in other geographic markets. Consult with community entrepreneurs about your local market. Are there common factors that you can identify that could lead to success or failure?
- What is your satisfaction level in your current job?
This seems obvious, but if you hate your job, going all-in on your side hustle could be a perfect solution. Not only financially, but for your mental health. Even if pursuing your side hustle will leave you strapped for cash, the enthusiasm and fulfillment may more than make up for it.
- Have you reached a state of feeling burnt out?
The importance of taking care of yourself can’t be overstated. Working full time on your current job and spending every lunch, early morning, late night and weekend on your side hustle is going to result in burning out. If you are reaching this point, it is time to sacrifice one of them for your own sanity.
- Is your job performance starting to suffer because of your side hustle?
When you find yourself in a state where you are unable to perform either job to the best of your ability, you need to reprioritize. Entrepreneurs are overachievers, so giving less than 100% is hard. If your side hustle has started affecting your job performance, consider where you can cut back. Talk to your manager to see if there are options. Can you go part time? Work from home? If not, you may want to start the transition process sooner.
- Are you prepared to take on all job functions at your current job?
Look around at your present company. Even if it is different, you will likely need to replicate many of the job functions yourself. Marketing, accounting, customer service, potentially human resources, distribution, IT, etc. Learn what you can, while you have access to it. Talk to contacts in each department to get their advice.
- Does your current job allow part time employment?
Pursuing a more step down approach to your transition can help ease the financial burden at the beginning of a startup. Consider consulting, freelance or part time work. Especially if you are in a niche or skilled position, try working with your manager to see if you can reverse your current situation and make your full time job into a side hustle.
- What are you potentially risking by quitting your current job?
Only you know how hard you worked to get where you are in your career. Years of education, industry accolades, and decades of experience have put you where you are now. Leaving now may jeopardize some of what you have built, especially if you have had any recent successes or notable projects that could be leveraged into a new or better position. Some jobs may be harder to return to than others if your new business does not succeed. Carefully weigh what you are risking versus potential benefits of self-employment.
- Are you holding your business back?
Is your lack of availability or time preventing your business from growing? If you suspect that being pulled in too many directions is keeping your business small, your side hustle may be ready for full time.
- Can you keep up with current demand?
Being too popular is a great problem to have. However, you do need to do something about it, before it affects you negatively. Whether you are an etsy shop, an Internet retailer, dog groomer or tech company, if demand outstrips availability, your business would benefit from more of your time.
- Will full dedication help you to be able to scale?
As the CEO of Gym Hooky mentioned in Ep. 8 of Second Act Success, “time is powerful. Energy is powerful. And the moment you’re really able to give something more of your energy, you can scale that by a whole lot.” When you are able to fully dedicate your energy to your new business, the results can be exponential.
- Are there business opportunities or ideas that you are unable to explore presently?
When operating part time, you may find yourself doing just what you need to do to get by. Proactive, forward-thinking ideas have to be pushed aside in order to make the business operate under the limited amount of hours you have available. Do you find yourself delaying marketing opportunities, co-branding, partnerships, PR spots, product expansions or extensions, redesigns or any other business objectives that could grow your business? Don’t let your lack of time stifle your business, let your creativity and ambition take the lead.
After taking a careful look at all the questions above, answer them candidly and thoroughly. Review your answers and see if you think your side hustle is ready for full time. If not, consider which questions you may be able to make progress on and which ones may be unchangeable.
When it comes down to it, no one can decide if your side hustle is ready for full time besides you. Be honest with yourself and your family. Make a plan. Follow your heart. Find your Second Act Success.