Before quitting your main job, you need to make sure your side gig is ready for prime time.
The right elements must be in place to turn your side gig into a full-time job
You need to understand your market
A financial cushion is critical
You need an interested client base and enough gigs to carry you into the future
If you’re turning down deals, it’s time to expand
You need to understand the financial aspect of running a business
Being self-motivated is non-negotiable
Once the essentials are in place, you can quit the daily grind and become your own boss
Side gigs can be a great way to boost your cash flow and explore your passions, but they also have the potential to turn into a lucrative career. If you’re loving your side gig, you might want to expand it into a full-time position – but before taking the leap to quit your job, you need to make sure you’re ready.
Is your side hustle ready to become a profitable business? Here’s what you need to consider.
Do you understand your market?
Often when people start a side gig they understand a certain aspect of it, but they don’t know everything about the market. For instance, they might know all about training dogs, but they don’t know how to set up a website or attract new clients. Or they might understand the fundamentals of creating compelling YouTube videos but may not know how to land sponsors or structure equity-based deals.
The more you engage with your side hustle, the more you’ll learn about the industry. An in-depth understanding is critical if you want to turn a side gig into a real business. Don’t make the leap until you truly understand your market, your competitors, and your role in that space.
Are people interested in your services?
Obviously, you can’t leave your real job until your side hustle becomes lucrative. In the beginning, you might start with one or two clients. Perhaps a friend hires you to do some graphic design work, or you cater a co-worker’s small wedding.
One successful gig is a great start, but it’s not a sign you’re ready for prime time. However, word of mouth and social media posts can go a long way. If more and more people are becoming interested in your services, you may need to contemplate expansion.
Do you have gigs set up?
When you have an employer, your paycheck is guaranteed. Sure, something could go wrong, or the company could do a round of layoffs, but for the most part, you wake up in the morning knowing you know you have a job and a steady paycheck.
Running your own business is never that solid. You constantly need to hustle. Before quitting your job, make sure the potential is there.
If you’ve got work set up for the next month or even the next six months, think about what’s going to happen next. Will you be able to get a steady flow of contracts? If not, you may need to keep your current job as a safety net.
Have you set up a financial cushion?
Because of the inevitable ebb and flow of cash when you run your own business, you need a cushion. If work is slow, you may need to dip into savings to cover your living expenses. When a big contract is in front of you, you may need extra money to invest in supplies.
If you don’t have a financial cushion, you may end up broke or even turning away deals. To make sure that doesn’t happen, you need a savings plan or credit line in place before you give up your paycheck.
Are you turning down deals?
Turning down deals is a very big sign you’re ready to take your business to the next level. Most side hustles start in the margins. You work on your side hustle after your main job. For some people, that’s evenings and weekends, and for others, it’s stolen moments between shift work.
Regardless of your schedule, your time is limited if you also have a full-time job. If you’re turning down offers your side hustle obviously has potential, and you may need to devote more time to it.
Has your main job lost its appeal?
Rather than just focusing on your side gig, you also need to consider your current job. If you love your full-time job and it offers room for growth, you may want to stay, or you may want to find a way you can continue to do both. If your main job no longer excites you, though, it may be time to leave.
Are you motivated?
A lot of people want to turn their hobby into a job so they can leave the nine-to-five behind, but building a business requires a lot of grind. To be successful, you need to be motivated. You won’t have an employer setting goals or writing checks.
Instead, you’ll need to handle all of that on your own. Before you quit your day job, make sure you’re 100 percent committed to being your own boss. This requires a lot of motivation.
How are the financials?
Money is the key decider in this decision. You’ll need that financial safety net, and you also need to make sure your business is ready to bring in steady cash flow. Beyond that, you need to understand the financial essentials of running a business.
Do you know how to track your finances? File a tax return? Find talent? Pay employees correctly? These are just a few of the financial considerations, and as you become more successful, the financials will become more complicated.
Once you’re ready to turn your side gig into a business, don’t let anything stop you. Put in your notice at work and get ready to be a successful entrepreneur. Enjoy your successes, learn from failure, and always keep improving.
Get help from Franco Blueprint
At Franco Blueprint, we help small businesses succeed. We can help you out of the gate with company formation and compliance services. As you scale, we can help you implement an accounting system or consult on your budget. We also provide high-level CFO services to businesses ready to become more successful.
Whether you’ve already turned the side gig into a full-time job or are getting ready to transition, we’d love to help you create a blueprint for success. To learn more, contact us at Franco Blueprint today.