Here’s the TL;DR
- Use the money you make from your side hustle to build a Cash Reserve
- Hire a pro to keep your financials organized
- A trusted advisor can help before, during and after the transition
Growing your side hustle to the point where you’re ready to take the plunge and make it your full time gig is a big deal.
If you’re not quite sure if youre ready, check out the article “How to Start a Side Hustle“ for some ideas about what you can do to get ready to go full time.
Now that you understand more about turning your side hustle into a business, here are your next steps:
Create a Cash Reserve
When you have a regular job, you have a financial safety net. When you experience the ups and downs of business, you can pay your bills from your salary.
When you go full time, that goes away. So, it’s important to build your own safety net.
- Use the profits from your side hustle to build up your cash reserve.
- Aim to have 6-12 months of business AND household expenses on hand before you unplug the regular job income.
Hire a Bookkeeper
Knowing where your money is coming from, and where it’s going is critical to your business success.
A bookkeeper will help you do that. You’ll get a monthly snapshot of your business.
Use this information to make important decisions like:
- how much to put into your cash reserve,
- how much to keep so that you can cover expenses
Bonus… you’ll have all your ducks in a row when it comes to doing your taxes. Trust me… the money you spend now will pay huge dividends down the road.
Most importantly, you’ll have the numbers you need to make the decision to go full time.
When your side hustle has income that’s equal to your regular salary for three months in a row, you’ll be getting ready to make the transition. The more stable your income, the easier the transition will be.
Find a trusted advisor that can guide you
It’s exciting to see your side hustle grow.
Speaking from experience, that excitement can affect your decision making. There’s a saying that one of my advisors told me many times…
“When emotions go up, inteligence goes down.”
Having an advisor that can help you manage the emotions, and provide guidance before, during, and after the transition to full time will help you make better decisions.
After all two brains are better than one.
There are many more things to consider when making the transition to full time. But, these three will give you a good foundation to build on.