6 Questions to ask Before you Turn Your Side Hustle Into a Full Time Business
6 Questions to ask Before you Turn Your Side Hustle Into a Full Time Business
Stories of people taking their 'side gig' and turning it into a multi-million dollar business make being an entrepreneur and business owner sound enticing and rewarding. All successful business owners will tell you that building a thriving business takes planning, effort, persistence and a willingness to take risks. So, to turn your side hustle into a long-term profitable business, you must do your homework. Before rushing in and quitting your job, challenge yourself to answer these six questions.
Are the financial plans and projections realistic?
There are two primary angles to consider – current and future state. Firstly, consider whether your side hustle consistently generates enough income to cover living expenses and business costs. Secondly, examine the business's growth potential and profitability. Look at both sides of the ledger - debits and credits and consider your cash flow position and how these factors will support or impede your growth ambitions. You want to clearly understand the business's financial state and have a realistic projection for future earnings and profitability.
Is my business plan robust?
A well-thought-out business plan specifies your goals, target market, marketing strategy, financial projections, and operational plans. It's your roadmap to success. Interrogate this roadmap to determine if it's robust. You want to lay out the opportunities for growth in your target market and detail sources of demand. Also, consider your suppliers and the relationship you have with them. You want to identify your competitive advantage and potential obstacles affecting your business's success.
What's my risk appetite?
Entrepreneurship involves financial and emotional risks. Consider your risk tolerance and assess your ability to handle uncertainty. Are you prepared for the possibility of income fluctuations, loss of job security, and the potential need to invest personal savings into your business? Be specific about how much money you are willing to invest in your business and how much you are ready to lose if the concept doesn't work.
Am I willing to do the hard work?
Kicking off can be easy. It's sustaining the momentum where the real challenge begins.
People get swept up in the initial enthusiasm for their idea and are often overly optimistic about how little effort, energy and resources are required to grow the business. Reality can be brutal. Be ready for the fact that obstacles and roadblocks will arise, potentially making progress slower and more complicated than planned. When you are clear on your purpose – why building your business matters it is easier to push through, stay the course, dedicate the hours and persevere to make your business succeed.
What am I willing to trade?
When I decided to leave my corporate role, I walked away from the security of a high-paying corporate salary into the unknown of running my own business. I was willing to take that risk and make the accompanying trade-off to pursue a career change that aligned with my aspirations. Life is a series of choices; sometimes, doing one thing requires giving up something else. For example, you may be willing to earn less money initially because running a business gives you the autonomy you seek. Know what matters the most to you so you can know what you are willing to trade.
Do I need a dual-track?
Taking the 'dual track' approach means staying in your current role whilst having a business on the side. You can test the parameters, build the infrastructure and contacts, and transition over a suitable time frame. It also provides a safety net as you have a guaranteed income source while building up the alternate income stream. Over time, you can wean off the first as the second stream grows. If things don’t go to plan, you still have the security of the original job.
Opportunities abound, and so too do business failures. Avoid getting side-tracked by interesting but irrelevant matters. It helps to break your work into bite-sized chunks so you can progress in a meaningful and relevant timeframe. Be willing to learn and adapt your approach. Know where your effort will produce the best results and identify what you don't do and what you’ll delegate and outsource.
Be open to the fact that the finish line keeps moving. You may find that you never quite reach the end, and that's okay because your business goals will grow and change, and so learning never stops. Above all, enjoy the ride and celebrate your progress.
Tags: business owner small business
