Having a project on the go alongside your day job is a great way to fulfil a passion.
It can be the ideal way to test a nascent business idea without the risk: do people actually want the product or service you are offering? And do you actually enjoy the hard graft that goes into making and selling it? “Yes” you say, but how can you tell if it’s a good time turn your side hustle into a real business?
If you decide that your side hustle is successful enough to focus on it full time, here are three things to think about before you make the leap:
Write a business plan
To work out whether your side hustle can run as a full-time business, writing a business plan is a good place to start. Working through what’s unique and special about your business, what the market opportunity is, how you’re going to create the product and sell it to customers on a bigger scale and how much you’re likely to spend and generate should give you a good indication of whether you’re in a position to make your side hustle work full time.
Luckily, if you’ve been running the project alongside your day job for a while, you should already have some of the details you’ll want to include in your plan, such as information about who your customers are, how much people are willing to pay for your product and a starting point for your sales projections.
For more information, read our guide on what to include in your business plan.
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Work out your numbers
Choosing to launch your own company instead of remaining in steady employment with a regular salary is a big financial risk, so look hard at your numbers first. Start by working out how much you need or are prepared to live on. What are your current fixed outgoings? How much do you spend on luxuries like holidays or nights out? Are you prepared to cut back on some of these things in order to launch your own business?
Then look at your sales projections and how much you expect the company to make. And be conservative – getting a small business off the ground never goes according to plan. Plan for poor sales figures and unexpected expenditures to see if you can make the numbers stack up.
Looking at the numbers should give you a realistic idea whether your side hustle could sustain you full time, and how much you should expect live on.
Give yourself a milestone to achieve to take the leap
You’ll have the limited capacity for working on your side hustle while you still have a full-time job. So there will have to come to a point at which you commit to putting in enough hours to see if it can scale. Identify a clear point at which the project will be ready to accelerate into a full-time business, and have that as your goal for when you will leave your job and start working on it full time.
That might be once you’ve hit a certain number of customers or subscribers, or a particular amount of revenue. It might be once you’ve secured the investment that you’re seeking, you’ve found the right premises or a co-founder.
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