If it’s an Etsy store or food cart or photography business or even working as a freelancer Many entrepreneurs begin their ventures as a “side hustle” while still working full-time or part-time jobs. This is a great method to try out the business before taking on full-time entrepreneurship.
If you’re one of those individuals you’re in the right place. The time is when the side business becomes big enough to warrant dropping your job completely. How you go about making that decision is just as crucial as the steps you’ll take to get to the stage. If you don’t prepare your transition in a way that is well-planned it’s possible that you’ll end up looking smugly back to the job you do before you were prepared.
To ensure that your transition is smooth and to set yourself up for success, follow these steps:
1. Build Up a Savings Fund
The usual advice given to people who are considering taking the plunge is to save at least six months of living expenses prior to making the decision to quit. Entrepreneurship is typically a feast-and-famine cycle because the projects you work on or the orders you place to change from month to month. A little bit of money to spare can help you get through the tougher months. It’s important to do this when you’re making the transition to full-time self-employment since this is typically a time when you’re still establishing and growing your client base. You may also be a bit shaky between your earnings and your budget.
Saving money will benefit you more than just ensuring that your budget is in the black every month. It can also provide you with the ability to develop your business according to your own preferences. When you’re trying to meet your financial goals it’s possible to find yourself accepting projects or clients on conditions that you aren’t sure are the most ideal. The extra money in your bank account gives you the option of saying “no” to projects you recognize don’t merit your time.
2. Know How Much Income You’ll Need to Quit
As well as building your cash reserves You’ll also need to know the amount of income you’ll have to earn each month to cover your operating expenses as an entrepreneur. This will help you get an understanding of when your company grows to the point where you’re able to “afford” to quit.
Remember that once you’re no more employed by an employer the expenses you incur can change. If you’re working from your home and you’re at home, you could, for example, take a deduction for commuting expenses such as gas or parking fees, as well as tolls. But, you might have to cover additional costs for other services, such as air conditioning and heating for your home when you’ll be at in your home for eight hours more a day, or increasing your Internet package to perform more effectively. Create a budget for your monthly expenses to ensure you can estimate how much money you’ll have to spend to take the next step.
3. Know Your Potential to Scale
Once you’ve decided on the amount you’ll require to leave working for and start your own business, it’s time to calculate that figure against the amount you’re currently earning through your side hustle and the amount you’re likely to make when you’re working full-time. It’s possible to put off the decision until you’re making precisely what you’ll need or you could choose to take a leap of conviction in the belief that more time to dedicate to your venture will allow you to scale quickly to that level.
When I decided to quit my job at work to concentrate on my writing and editing career full-time I didn’t have the income I thought I’d need to make ends meet by myself. But I was aware of the hourly rate and knew that I had enough projects in the pipeline that, once I was able to concentrate on my business full-time I could quickly earn the money I’d need to make. Begin to send out invitations to current clients and contacts to see what additional business you could reasonably expect to earn once you’re full-time.
In the End
The transition from part-time hustler to full-time business owner is always an undertaking but when you make it a deliberate one, you’ll be able to increase the likelihood of success.