It’s quite the understatement to say that this new decade has gotten off on the wrong foot. Despite a knee-capped economy and a stagnant job market across several industries, people have shown their entrepreneurial resilience with the popularization of side hustles. When a job (or lack thereof) couldn’t provide, many took to performing odd jobs and monetizing their hobbies in order to make a little extra income. From personally designed clothing lines to innovative software solutions, many creative and driven individuals have turned their passion projects into promising and profitable startups.
Think before you leap
Taking that leap and committing to a full-time business can be a daunting decision for many entrepreneurs, though, and it can be tough to decide whether your side hustle is worthy of taking to the next level. As the co-founder of content marketing platform Cohley, it took me and my fellow co-founder Erik a few years to muster the courage to fully pursue our passion, which has now transformed into a rapidly growing startup over the course of five years. So how can you tell when to make it a full-time gig, like we did, alongside so many other first-time founders?
Before seriously considering the commitment to founding a company, it’s important to consider your current balance of priorities. Side hustles can often be a fun way to make money with your extra time, but it’s important to ask yourself whether you would enjoy it as your livelihood. Not to mention that financial stability is hard to come by in the early days of any fully realized business venture. If these thoughts don’t shake your resolve, then your next step is studying the signs that mean you should pursue your ambitions.
Risk vs. reward
The first sign comes through a bit of introspection – will you regret not taking the risk a few years down the road?
If you wouldn’t be able to live with the “what if’s” in a few years, you’ve encountered the first signal that you ought to take your potential business opportunity seriously. The next step is reading the “room” (AKA the market and your current position within it). If you’re already receiving an overwhelming amount of orders and inquiries about your enterprise, the writing is on the wall. However, that doesn’t mean a less lucrative business can’t flourish in the long run. If you can see a path to success for your ideas, especially by taking advantage of gaps in the market, a slow and steady approach can absolutely work.
No matter how many dollar signs you’re seeing at the moment, though, the bigger financial picture should inform your actions in the long run. Most successful, large-scale businesses endure a rough and red first few years without turning a profit. Resilience and keen money management is key, so you should evaluate your current save-to-spend ratio in order to determine whether your side hustle is financially stable enough to hit it big time. If you’re seeing a significant surplus of cash each month, this is yet another box to cross off the checklist. But as with the previous sign, there are exceptions. Those looking to found a tech startup like we did at Cohley shouldn’t realistically expect to be running a sound business for a while, though that shouldn’t discourage you. Give yourself at least two years before expecting any sort of viability, and you can work your way up from there.
The final sign to consider before expanding your side hustle is the need for labor from people aside from yourself. While you have been running a self-sufficient operation, you’ll struggle to grow without the expensive work of other real and talented people. What matters is the amount – how many people and how many hours of work must you pay for to successfully scale your future company? There are ways to work around bloated payrolls, such as integrating innovative software that saves time and brings greater value than a handful of employees. If most of your labor can be carried out by your digital infrastructure, you’re on the right track to exponential growth.
Ultimately, the decision to make your side hustle a full-time business is up to your current priorities and goals. If one or more of these signs resonated with you, know that it may be time to shift your focus and turn your aspirations into a reality.