5 Strategies Successful Side Hustlers Use to Create Full-Time Businesses

Whether it’s earning extra money for life expenses, building an emergency fund, testing out a new business idea or pursuing a hobby, the number of people with a side gig is growing – and fast.  That trend continues to grow with the next generation of entrepreneurs: more than two-thirds (67%) of Gen Z started their businesses as side gigs, compared to less than half of the Boomer generation (48%). 

So, how can you lay a strong foundation for a smooth transition and prepare yourself for financial and business success, while managing your business efficiently?

1. Treat it Like a Real Business from Day One.  As we know, many side gigs start out as a passion and therefore, financial management may not be a strong skill for every founder. As such, it’s important to keep personal and business finances separate, and streamlined (in different buckets) for tax purposes. One option is to set up a corporate entity to keep your side gig separate from your personal affairs.  If finance isn’t your forte, utilizing online accounting software is one way to keep finances in check by creating routines and structure.
2. Know When to Go Full-time.  Every journey, from side hustle to growing your business full-time, is different. Having checklists in place can help assess the risks to determine whether it’s time to make the leap, and also help you explore your intrinsic motivation once this becomes all you do. Consider practical things like: What about the business is succeeding and why?  Is there more demand out there for the service you provide than you can fulfill part-time?   How do you envision marketing your service and will it require any investment?  Is your business income consistently replacing or nearing your current full-time job salary?  Do you have 3-6 months’ savings in place as a buffer?   And deeper questions like:   If you took this side hustle full-time, would it still be fun? Would it give more or less satisfaction than your current gig?  What parts of your side hustle give you energy and what drain your energy? How much of each will you have to do if it’s a full-time job?  Answering practical and deeper questions for yourself helps you make a more informed decision about taking a leap like this. Don’t have the answer to the deeper questions? Think about someone who knows you well — a family member or long-time friend — to help you reflect on “you,” and talk things through with, without judgment.
3. Develop a Tailored Business Plan.  No matter the size of your business, developing an “outside in market view” of your business category, and then a roadmap can enable entrepreneurs to grow with a sense of purpose. Research shows that nearly half (49%) of small business owners cite self-doubt or fear of failure as a top challenge when starting out. Building a framework helps to define what success looks like while ensuring systems can support future growth and expansion.  Make sure you start with the market you’re serving and where it’s growing, and how your business fits in. Consider the value a business idea brings to customers, the market demand, and how to differentiate your business from competitors. Then identify goals and key milestones for the next 6 to 12 months. This could include hitting revenue benchmarks, launching a website or gaining your first 10 clients.
4. Prioritize Cash Flow Management Early.  Issues can sneak up fast if you’re not prepared or actively monitoring what’s coming in and what’s going out. There is often a gap between spending and making money, especially when there’s a need to invest in new business growth or marketing before seeing any income. Other challenges can include forgetting to account for hidden costs like subscription or website fees, packaging and taxes.   In order to maintain healthy cash flow and build resilience against any future economic uncertainties, small businesses should also prioritize strategies that encourage their customers to pay promptly. 
5. Grow Smarter, Not Harder.  Making the transition from a side gig to a full-time business can sometimes feel like a lonely journey – especially if you’re running your business solo. Leaning on other small business owners, a friend you can confide in, accountants and bookkeepers, technology – and engaging in a community of others facing similar challenges – can allow business owners to grow smarter.