You’ve been clocking in at your day job for what seems like decades, but like any good aspiring entrepreneur, you always have a side hustle going on. Whether you’re feeding your passion or just your wallet, a side hustle is a smart way to build your reputation and earn some extra cash (that dream home isn’t going to build itself!). But when do you know it’s time to give your boss a (very polite) heave-ho and turn your part-time hustle into a new full-time endeavor? And how do you get started as a small business? Listen up chief, we’re here to offer some sage advice.
When to Clock Out for the Last Time
A hobby isn’t a good reason to quit a job. Even if you’re great at Counter-Strike, you probably aren’t good enough to go pro (sorry to burst your bubble 🤓). On the other hand, a side project that could conceivably be monetized may merit leaving your current job. So how do you know the time is right? Ask yourself these questions:
- Can I replace my current income with my side hustle? How long will it take to make the same income?
- If I don’t make my current income with my side hustle, could it at least allow me to earn a livable wage?
- Do I have a business plan?
- Will I need a business loan? Do I have a good credit score that will make me appealing to lenders?
- Is the potential drop or risk in income sufficiently balanced by the other intangibles I’m gaining, like happiness, or autonomy?
Making a Smooth Transition
You’ve decided to make the leap? Welcome to the other side. Not everyone has the nerve to become their own boss. Now, how do you make the transition without causing too many waves? Here are a few things to watch out for to avoid experiencing any major hiccups:
- Don’t create any work for your side gig on company time. Like, ever. Your employer could technically own the intellectual property (IP) to your work since you did it on the clock.
- Don’t take any intellectual property from your company to use at your new small business.
- Check your contract for a non-solicitation clause. You may be legally restricted from taking your employer’s clients with you to your new gig.
Getting Started as a New Business
Turning your side hustle into a full-time thing is exhilarating, but there are more than a few T’s to cross before you can call yourself a business owner.
- Open a bank account: it’s wise to keep your business and personal accounts separate. Small business banking accounts allow you to track your cash flow and company net worth independently from your personal finances. If you’re thinking about getting a business bank account, make sure to check out NorthOne. Trust us, you’ll thank us later.
- Incorporate: Setting up a business name and getting your business directors registered are a few of the steps involved in getting incorporated. Sound complicated? We believe in you! Sit down, focus, and complete the process.
- Research small business loans: If you need some upfront cash, start looking into small business loans. You’ll need a decent personal credit score and a business plan to get started.
Congratulations on turning your side gig into your main gig! With some planning, paperwork, and a whole lot of hard work you’ll be the successful small business owner we know you can be.