There are many ways to start a business, and establishing a side hustle while working your full-time job is a popular way to go. According to a survey by The Hartford, nearly 25% of Americans own a side business that is not their primary source of income. Motivations for starting a side hustle include earning extra income and wanting to make a lifestyle change.
If you’ve been running a side hustle successfully for some time, you may start wondering about the viability of going further. What if you’re ready to take your side hustle to the next level by turning it into your primary income source? Read on to learn more about what to consider and how to do it.
Evaluate your side hustle for bigger potential.
There were a number of things you considered when you started your side hustle. You had to align your skills and talents with a need in the marketplace. You validated your idea to gauge whether it was something people needed and what people were willing to pay for it. You gained a deeper understanding of your target audience’s desires and motivations, and you learned how to convert interested prospects to customers. All the while, you learned to confidently run a small business with all of the financial, business and marketing skills that come along with that.
Now you need to know whether the idea itself has bigger potential. To find out the answer, go through the same process you did when initially evaluating your idea, but with new criteria: a market large enough to support the expenses of a business, including long-term salaries and demand that is sustainable.
For example, if your side hustle currently focuses on a very niche audience, there may not be a large enough market for your idea as it currently exists. You may want to introduce a new niche or add a new product or service. Or, if the demand for your idea is temporary, created by market conditions that aren’t likely to last, you’ll want to reevaluate.
Know when it’s time to take the risk.
Once you’re sure your idea has long-term potential to support a larger business, you’ll want to determine if now is the right time to expand. Here are three indicators to look for.
1. You’re ready financially.
There are two aspects to being ready financially. First, you want to make sure that your side hustle is profitable. Once you start seeing consistent revenue and, more importantly, profit, your business endeavor may be ready to expand.
Based on your historical numbers and taking into account the increased activity you’d be able to devote to the business if you went full time with it, forecast what you could expect to make in the coming months. Is it enough for you to make ends meet while you continue to build your business to where it needs to be in order to meet your financial goals?
If your projections show profit happening a few months down the road, you’ll want to be sure you have the second aspect of being financially ready: a savings account that can tide you over in the meantime. A savings account is a good idea regardless to serve as a safety net if your projections are off or if something unanticipated happens.
2. You see a clear path for growth.
As you’re slowly expanding your side gig, you may be getting more work with existing clients as well as some new client opportunities. However, your time to dedicate to this new work will be limited by the time you have available on nights and weekends. At some point, you will wish you could say yes to more. This situation is a clear junction where you may want to consider taking your side hustle full time. Nothing happens without sales. And if sales are expanding beyond your capacity to deliver, then that’s a good indicator you may be ready to expand.
3. You’re loving the work.
When you’re at a point that you have established expertise, can confidently run all aspects of your small business and have a reliable income stream with ample opportunity for growth, it looks like you have the green light for transitioning your side hustle to a full-time business. But there’s another key ingredient. You should enjoy what you’re doing enough to dedicate full-time hours to it.
If the thought of working more doesn’t light a spark within you, then you may not have the right idea, or the timing may not be right. Expanding a business requires a lot, and it will be tempting to quit if something beyond the money isn’t driving you.
Make the leap to a full-time business.
If you started your side hustle without a fully baked business plan, you’ll want to take the opportunity to create one before you make the shift. A business model canvas is an effective and helpful framework with which to structure your business plan. Of course, if you did create a plan before establishing your side hustle, you’ll want to revisit it to make updates based on what you have learned about your business and your expanded market opportunity.
If you can create a business model canvas built on solid data, not guesswork, and your numbers are looking good, the signs are showing that you’re probably ready to take your side hustle to the next level. With a savings account to serve as a safety net, the risks you face are minimized. It’s game time!
This content was originally published here.