Turning Your Side Hustle Into a Full-Time Business
This is Part 2 of our two-part series about starting and growing your side hustle. You can find Part 1 here.
Have you thought of leaving your full-time job so you could take your side hustle to new heights? If you find yourself with more business than hours doing both, it may be time to make a decision.
However, leaving the safety and stability of your current job is a big jump to make. You have to prepare for the change and ensure your business is ready to grow.
How To Tell If Your Business Is Ready for the Big Time
Ask yourself a few questions to determine whether your side hustle is ready to transform into a full-time business:
1. Can you gain more revenue?
If you’re running a business on the side, there’s a chance that there is more demand for your products and services than you have time for. Are you consistently selling out of your products? Are you turning down appointments because there are not enough hours or people to run your business? If so, it’s probably an indication that there is more opportunity to sell more, expand to other services or hire people.
2. Do you have a support system in place?
Even if you’re a do-it-all business owner, it’s much easier to succeed with the proper support system in place. This could be friends and family or a few independent contractors or employees who can help out during the growth period. As you’re ramping up production and adding services, your team can take some of the weight off your shoulders.
3. Do you have enough money to live off of for the next 6 months to a year?
Oftentimes, during periods of growth, small businesses won’t see any revenue for a while as they invest back into the business. Before you make the jump, be sure you have enough in the bank to support yourself and your family, as well as cover unexpected expenses during this period.
You’re Ready To Grow: What’s Next?
If you’ve officially determined that you are ready to leave the 9-to-5 life behind, it’s time to work with business development professionals to make sure you’re set up. A large chunk of your business structure is probably already in place, but you may need to make some adjustments.
Here are a few steps to take as you get started:
1. Reevaluate your business plan
When you first started your business, everything was on a much smaller scale than what you’re working to accomplish in the future. Meet with your CPA or the Small Business Development Center to update your plan and create new realistic projections. This will serve as your road map to success going forward.
2. Reconsider your business structure
If you’ve been operating your small business as a sole proprietorship, it may be time to reconsider your structure. For example, if you’re bringing in a business partner, you will probably want to form a partnership. Or you may want to lower your liability by forming a corporation or an LLC. Work with your CPA and your attorney to determine the best structure for your growing business.
Read more: Exploring the Different Types of Business Structures
3. Talk with your commercial banker
You may need additional financing to grow your business. Whether you’re financing the purchase of a new building, buying equipment or injecting cash flow to cover payments to vendors or staff, your banker can help.
Learn more: Contact a commercial banker today
4. Don’t forget about benefits
When you leave your full-time job, you’re also leaving your benefits package behind. You’ll need to know where your health insurance and retirement fund will come from. For health insurance, consider talking with a local company or exploring your options online. For retirement plans, you can work with a wealth advisor at your community bank. If you’re hiring employees, you’ll also need to determine what benefits you would like to provide them as well as those you are legally required to provide.
5. Find efficiencies
Now that you’re putting your all into your small business, try to find new operational efficiencies that save time and money. One example is to start utilizing automated clearing house (ACH) services to send and receive payments. Doing this will allow you to collect receivables more quickly and improve your cash flow. It will also help you pay your employees conveniently and on time.
Get started: Contact a treasury services representative today
Make the Jump: Turn Your Side Hustle into a Full-Time Gig
Being able to turn your small business into a full-time job is all about the mindset. If you have the drive to turn your side hustle into something bigger, you have a good chance of succeeding.
At Northwest Bank, we have the connections and resources to help you grow your business. Whether it’s connecting you with the Small Business Administration, helping you adjust your financial services or getting you in contact with a treasury services representative, we can help you make it happen.
Get started by contacting your commercial banker today!
Small Business Financing for the Next Step
You’ve worked hard to build your business. Now make sure it continues to thrive. Local businesses are vital to the community, which is why helping yours grow is our priority.
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