You’ve started a side hustle, and you love it. You have nurtured it and it has evolved from a pipe dream to a passion. And what’s more, you are starting to make serious money doing it.
That’s the goal, right? To be able to make money doing something you love.
But would quitting your full-time job be crazy? Sacrificing stability for an uncertain future can make anyone sweat. It can be terrifying to take the leap and go out on your own, unsure of what lies ahead.
You are likely getting contradicting advice from all sides. Some friends and family warn against following foolish dreams while others cheer you on, saying that fortune favors the brave.
Today, I will discuss how to discover if your side hustle is scalable enough to become a full-time gig. Let’s dive in…
The Rise of the Side Hustle
Side hustles are just as diverse as the people running them. Some people drive for rideshare companies like Uber and Lyft, others sell their crafts on Etsy, while some sell real estate.
To better understand the side hustle economy, a recent study ranked the top 10 industries in which people have a side hustle:
- Real estate
- Health, wellness, & fitness
- Marketing & advertising
- Consumer goods
- Food & beverages
- Consumer services
- Arts & crafts
30% of side hustlers do so to make ends meet. The other 70% started a side hustle to increase their savings or disposable income, or to follow a passion.
More importantly, since it’s not their main form of income, side hustlers usually love their side hustle more than their regular job. Only 51% of respondents said that they loved their full-time job, while 76% said that they loved their side hustle. However, only 48% of respondents said that they wanted their side hustle to become their primary source of income, citing fears of sustainability and financial security. So how can you know if your side hustle can turn into a full-time gig?
Analyze the Demand
The first question you need to ask yourself is this: is there truly a demand for what you’re offering? It may seem that your business is booming, but do you think that you have tapped into all of your possible markets, or are there more to explore?
There are a couple of ways to investigate this question. First, who are you selling to? If it’s just friends and family, that may be a red flag. While they may enjoy your goods and services, they also may be your customer to help you out. Your business will never be scalable unless you can get leads from outside of your social circle.
Secondly, do you have extra time? You will start to know that you have a demand when you literally don’t have time to fill it. Are you constantly having to turn potential customers away or are you needing to advertise to fill empty slots? If the interest in your services is consistently higher than what you can fill, that is a sign that the demand might be high enough to dive in full-time.
Also, make sure you do your research and know the problem you are solving in the marketplace. The last thing you want to be is a solution looking for a problem to solve. Also, research your competitors to know what they are charging and how they’re promoting and capitalizing on the opportunities.
Plan Out Your Finances
This is where you need to put your excitement aside and be practical. Can you actually support yourself using the income from your side hustle? To answer this question, you need to create a business model and a realistic financial forecast. Don’t establish these numbers based on dreams or hopes, but on what you actually think can be done. Sure, eventually you want to be making 6 figures, but what will the first year look like? And the second? Keep in mind that most entrepreneurs can’t even pay themselves for the first year. Do you have enough in your savings to support yourself, even if you don’t immediately turn a profit?
These are hard questions, but absolutely necessary. It can be easy to just jump in and hope for the best, but that is not how successful businesses are founded. Try to be pragmatic and plan out where your money will go and how you will make it. If you can make more money than forecasted, then great. But you also need to be honest with yourself about how much money you can actually make, especially in those early years.
In looking at your business model, how can your business grow? Does your business need you to do everything, or do you have plans to expand? If you need to run the show, that will limit how much growth you can acquire. After all, there are only so many hours in a day.
If you are feeling overwhelmed with everything you need to do, remember to outsource where you can. Maybe you are the idea maker, but you can outsource the more menial tasks to other people so that you can focus on the big picture and revenue growth. There are several websites that are great for hiring qualified freelancers, including Fiverr and FlexJobs. By letting someone else lighten the load, you free yourself up to grow your business and focus your expertise where it is needed the most.
Develop a growth strategy to help you create a brand, build awareness, attract the right traffic — leads and sales — to your website.
You can’t think about scalability without considering your online presence. You will be able to better market yourself and your service/product has a greater potential for growth and expansion when you look at having a clear digital strategy.
If you haven’t yet developed a website or blog, there are several good web hosting services out there. BlueHost, DreamHost, Hostinger, A2 Hosting, and GreenGeeks all have plans starting at $3/month or less, and Cloudways has a free trial program. Be sure to create a website with an SSL certificate and don’t forget that it can be worth it to spend more for a premium hosting experience. Website speed, usability, and security can all have a big impact on your website traffic.
Another way to avoid trading time for dollars is to look into selling what’s in your head. E-courses, coaching, blogs, whitepapers — these are all things that can earn you money while you sleep. See if you can package up your services in such a way that you can help as many people as possible without necessarily taking hours out of your day.
Wrapping It Up
As you start to plan and weigh your options, be sure to be pragmatic. There will always be a leap of faith when diving into your side hustle with both feet, but you should also have a concrete and realistic plan to make ends meet. Starting your own business is a combination of love and logic, dreams and pragmatism. You need to live somewhere in the middle.
And when it comes down to it, don’t forget that there will always be opportunities to work for someone else. If the worst happens and your business doesn’t pan out, you can always go back to working for someone else. However, if you don’t go for it, you will never get the chance to see what amazing things might have been had you taken the leap.
For more entrepreneurial advice, head back to my blog.
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