Starting up a side hustle has become easier than ever. Between the explosion of opportunities in the gig economy and the plethora of tools and resources now available to facilitate remote work, Statista reports an estimated 59.7 million Americans worked either full or part time as independent contractors in 2018. That figure is expected to reach more than 90 million by 2028.
Of course, the fact that it’s easy to start generating income on the side doesn’t mean it’s easy to keep it going, much less make it grow. Freelancers and contractors who moonlight on opportunities while also working full-time face a number of challenges — not the least of which are exhaustion and burnout. For most of us, it’s simply not sustainable to keep up the 60 or more hours per week it takes to maintain even a small, bootstrapped side hustle alongside a full-time career.
So, what if your dream is to turn that side hustle into your main gig? What factors do you need to consider? And, how do you know when you (and your business) are ready to make the leap?
Here’s a simple four-step process that can help get you there:
Step 1: Determine your needs
True needs are generally defined as food, water, clothing and shelter. And, of course, those are important. But, in this context, we’re expanding that definition at least a little bit.
If you’re honest with yourself, you probably don’t need to be earning a million dollars a year, or to buy that vacation home in Aspen. But, you do have certain responsibilities that you need to care for: perhaps people who rely on you, and at least a minimum lifestyle you “need” to maintain to be happy. So, for the first step of this process, take an honest look at what aspects of your life are non-negotiable, and what it takes to comfortably care for them.
Ask yourself questions like these:
- What is the minimum net monthly income I need to care for all of my “needs” without stressing out?
- What is the maximum number of hours I’m willing and able to dedicate to my business without risking catastrophic burnout?
- What would it realistically take on my part to earn my minimum net monthly income from my business without exceeding my maximum workload?
In most cases, answers to those kinds of questions will surface some pretty significant gaps between where your side hustle is right now and where you need it to be if you’re going to jump into it full time. (That’s why you still have a full time job, right?) Those gaps are vital further along the line in step 3. But first, you should also consider your wants.
Step 2: Determine your wants
Let’s come back to that vacation home in Aspen for a moment. Granted, it’s not a need. But, is it truly a deep desire or life goal that you’re hesitant to give up? If so, then it’s important that you acknowledge that and keep it in mind as you’re considering this important decision.
In this context, your “wants” include anything that’s not technically vital to either survival or the minimum lifestyle and responsibilities you need to maintain, but that are nonetheless important to you and your personal definition of success. They can be material desires, such as a home, car or vacation. Or, they can be more nebulous, like free time to pursue non-work related pursuits, or time to spend with family.
We all know, deep down, what’s truly important. To see how those wants fit into your decision, take another look at the questions you asked yourself before, but with some slight adjustments:
- What is the optimum net monthly income I want to care for all my “needs” and my “wants” so I can feel truly satisfied?
- What is the preferred number of hours I’m willing and able to dedicate to my business each week so I can feel completely fulfilled in life?
- What would it realistically take on my part to earn my optimum net monthly income from my business without routinely exceeding my preferred workload?
Then, one final question rounds out the identification and acknowledgement of your needs and wants:
- How long am I willing to pursue the growth of my business before all these wants are satisfied?
With the answers to all of these questions in mind, it’s time to analyze the inevitable gaps you’ve found.
Step 3: Do a gap analysis
In all likelihood, your answers to the above questions have unearthed the following general gaps:
- Your side hustle does not consistently provide the minimum monthly income you need to care for your responsibilities and avoid stress.
- Your side hustle does not consistently come close to covering the optimal monthly income you need to satisfy all your needs and wants.
- Realistically, reaching your optimal monthly income from your business alone will require more hours than you’re willing to invest without risking burnout. It may not even be realistic to expect it to reach your minimum income needs at this point.
- If nothing about your side hustle changes, it would take far too long for you to reach the point where it’s providing your optimum income within your preferred investment of time and effort. In fact, that may never happen under current circumstances.
Don’t be discouraged by these results. They’re not only common, they’re necessary. These are the facts you need in order to determine: 1) If you even want to pursue turning your side hustle into a full-time career, and 2) What it’s actually going to take to successfully achieve that goal.
Assuming you’re game to keep at it, start playing with the numbers:
- How many more leads/customers/products sold/services rendered are needed to reach my minimum income goal? (This answer gives you some specific goals to consider from a marketing and sales perspective).
- How much more would I need to charge for each product or service I offer to achieve my minimum income goal without increasing my number of customers? (This one speaks to how you’re positioning and valuing what you sell).
- How could the business benefit if someone else were working with/for me, and what would that cost? (This question opens up the possibility of bringing on one or more employees or independent contractors to spread out the workload and/or provide knowledge, skills and experience you may not possess).
- What opportunities could I pursue to automate aspects of my business in order to optimize the ROI on my time and effort? (As we already noted, tools and resources today help facilitate remote work and other aspects of independent business administration. Can you take advantage of them more effectively?)
- How much can I grow my side hustle toward these goals without giving up the security and income of my full time job? (Another important point that balances time and income security with potential burnout).
There are many other important questions you’ll be able to come up with based on your personal circumstances and your own list of wants and needs. Once you’ve analyzed all those gaps, what you’re left with should be pretty close to an actual business plan. Or, at least, an outline of what it’s going to realistically take to get from where you are now to where you want to be.
Step 4: Do a risk/benefit analysis
Now, it’s time to really put it all out on the table. Based on the potential plan you’ve established, you should be reasonably confident about what it’s going to take (time, effort and money) to turn your side hustle into a full-time career you can be truly satisfied with for the long haul. A simple risk/benefit analysis is in order to help you decide if the ends justify the means.
The main points your risk/benefit analysis needs to establish are:
- Is the opportunity to run this business and control my destiny worth the investment I’ll need to make?
- Are there factors completely out of my control that are likely to stand in the way of success despite my best efforts?
- Am I going to be able to satisfy both my needs and my wants soon enough that I won’t get overly discouraged or otherwise need to change directions?
With these and similar questions answered, you’ve done all the thinking and planning you can do.
Step 5: Make your decision
Now, assuming that all the data still points you in this direction, it’s time to make your decision and go for it. Likely, that doesn’t mean heading into your boss’s office and quitting tomorrow. But rather, it means taking the first step in the plan you have now established: The realistic, step-by-step plan you’re going to pursue to confidently turn your current side hustle into your future full-time entrepreneurial career.
Congratulations and good luck!