Many small businesses start as a hobby business or ‘side hustle’ which you might run in your spare time while holding a job with another employer.
Setting your own hours and being your own boss might sound like a dream when you’re working while running a business on the side – but it’s important to make an informed decision before you decide to ditch your day job.
If you have a side hustle and have been thinking about going all in with your business, here are some signs you’re ready and some signs it might not be the right time yet.
3 signs you’re ready to commit full time to your business
1 - Your finances are looking good
If your side hustle products or services have been consistently generating a reliable income and you have evidence of at least three to six months of growth, you could be ready to transition to a full time business owner. To take the pressure off during the transition, it’s worth making sure you have enough savings to cover your living expenses for at least six months.
2 - There’s a growing and consistent demand for your products or services
Make sure you’ve undertaken market research to determine if your business is sustainable and worth investing more time and resources in. Look at likely trends and risks to your business, and what your competition is offering. At the SBDC, we can help you gather the latest data from your industry by providing free access to IBISWorld market research.
3 - You love your side hustle
Perhaps you’re finding yourself drawn more and more to your side hustle. Maybe you’ve had to turn down new opportunities because you simply don’t have the time, even though you wish you did. These could be signs that you’re ready to commit to turning your side hustle into a full time business.
3 signs to keep your day job
Running a full time business isn’t for everyone and you might need the security of your employer’s pay check for a while longer at least. Here are three signs you might not be ready for a full time commitment to your business.
1 - You don’t have a financial cushion
While many people leave their job before saving enough to cover personal and business expenses for at least six months to a year, this can put a LOT of pressure on you and your business. This could lead to financial stress or failure if your business grows more slowly than you expected.
2 - Your business income is inconsistent or unpredictable
If your side hustle has been built on your personal connections or providing discounts, or is extremely seasonal, your client base may not be sustainable for full time growth.
3 - You don’t have a clear business plan
If you don’t have a plan for scaling, marketing and managing finances, this could indicate the business is not ready for full time status.
If you’re not ready to take on your business full time yet, it doesn’t mean you’ll never be able to.
Use these tips to set yourself a goal and see what you can do with your business while running it on the side – and you might find you’re ready to go full time at some point in the future.
Ready to go full time? Here’s what to do next
If you decide you are ready to run your business and leave your day job, here are some tips to help make a smooth transition.
Expand your small business skills
Our SBDC business skills workshops are a great, low cost way to hone the skills you need to transition from running a side hustle to being a full time business owner. The sessions are just $20 each and are taught by subject matter specialists who are (or have previously) run their own small business.
Support your financial stability
Before making the leap, build a savings cushion of at least six months to cover both living and business expenses. Open a dedicated business bank account to keep your personal and business finances organised and separate. Make sure you have a clear picture of your monthly cashflow and financial needs. You will also need to understand your tax obligations and legal requirements. Consulting an accountant or lawyer can help you start on the right foot.
Create a clear business plan
Investing time to create a business plan will help you validate your business idea and check that it’s feasible to run your business full time, in terms of your time, resources and finances. Define what success looks like for you, including revenue targets, customer numbers and your personal lifestyle choices.
Keep a good relationship with your employer
If you have worked in your current job for a while, those connections and relationships can be crucial to your long term aspirations. If you do decide to give notice at your job, make sure you leave on the best possible terms with your employer and colleagues.
Find out more
To learn more about what you’ll need to run a business full time, explore the business information section of our website. You might also like to:
- Sign up for the SBDC small business news
- Contact our free business advisory service
- Explore our range of small business workshops
- Learn more about starting and growing a business
- Consider joining an industry or business association to grow your network
