Your side hustle appears to be getting some traction. But you’re so busy slaving away at your full-time day job (which is always more than 9 to 5, Dolly) that you’re barely getting time to give it the attention it deserves. When’s the best time to make your start-up your priority?
Many successful businesses start from a hobby
We think it’s a smart strategy to start a side business while still working full-time as this limits your risk of financial fallout.
Pat yourself on the back because, according to a study by the Academy of Management Journal, entrepreneurs who work on their start-up while still in employment at least for the interim, are 67% more likely to succeed with their new venture! So, you’re already on the right track. Stealthy is smart.
When you begin your start-up business, it’s important to be aware that the amount of time you put in doesn’t always correlate with financial success, at least not in the first few months or years. The groundwork of setting up your business usually always comes at a loss.
However, unless your side business isn’t growing, over time you’re not going to be able to give your full attention to both your day job and your start-up long-term without either or both of them becoming monotonous. You’ll probably forfeit all-important downtime and social occasions with friends, and you’ll develop a higher chance of burnout.
So when is the right time to take that leap, give up your job, and focus full-time on your business?
When to give up your day job?
1. Your work-life balance is suffering
The reason why entrepreneurs are always so busy during the start-up phase is that this is usually when you need to invest the most time. It may have gotten to a stage where there aren’t enough hours in the day.
If you’re not getting enough sleep, either because you’re burning the midnight oil or getting up at the crack of dawn to fit everything in, and losing every weekend to work, then it might be time to concentrate on your business full time.
Living like this is manageable for short periods and isn’t sustainable. It’s both mentally and physically draining to switch your focus between different tasks within the same day and isn’t as efficient. Studies suggest it can take up to 23 minutes and 15 seconds to fully recover from an interruption.
2. Your full-time job just doesn’t excite you (anymore)
The entrepreneurial bug has bitten and you’re wild for it. You’ve had a taste for what working for yourself and with passion feels like – and you want more. Your business seems to energise you!
Conversely, your job feels dull and you’re just not enjoying it anymore. The hours seem to drag on and you are finding yourself clock-watching so that you can finish your working day and get back to where your heart is.
3. It’s getting awkward at work
You’re acutely aware that your colleagues and manager alike know that something has changed within you. You have a few confidants in the workplace who know all about your business venture but you feel like you’re putting them in a tricky situation. You just want to clear the air and be honest about what you’re doing. Also, not being public about it is starting to hurt your business.
Check your employment contract. Some explicitly state that you’re not allowed to work on other ventures, which can be grounds for termination if you’re found out. Similarly, there may be an ethical and legal issue if you’re working in the same and/or competing field as the company where you work your day job. This could permanently damage your reputation, not only within the company but also in the wider industry.
The work that you do at your full-time job is almost always the property of the company, so watch out. You should always run your own business on your own time and with your resources.
4. You have enough money to keep you afloat
If you’ve been smart, squirreled away some of your job income, and put any profits from your side hustle into savings or into growing the business, then you should be okay. If you do stop working you’ll need to have enough working capital to keep running the business.
5. You’ve created a realistic personal budget
A good way to measure if you’re making enough money in your side hustle is to do some proper money budgeting.
Take a look over the last 12 months to work out how much you’re spending and where you’re spending. Work out how much you need to realistically earn (after tax) to live. The most important thing should always be paying:
- your rent/mortgage
- your priority bills like energy, water, council tax, phone, and internet
- while having enough money left over for food and essential travel costs
After you’ve done your budgeting, you need to ensure you still have enough money each month to cover any planned initial business losses or give your business a cash injection when it’s needed.
6. You need investment
You might see that to take your business to the next level you need some investment or a business loan. If that’s the case, most investors expect your attention is 100% on the business. Investors or banks will rarely invest if that’s not the case.
Similarly, you may not be eligible for start-up grants and accelerator grants if you aren’t a full-time entrepreneur.
7. The rewards look like they’ll outweigh the risks
Your business has been growing organically and you see the potential in where it’s going. Perhaps there’s already a line of customers knocking on your door, but you just can’t serve them and fulfill orders. Or perhaps you’re confident you could increase sales if you spent more time marketing the business.
8. You have a Plan B
If your business doesn’t take off quite how you imagined, you must have a fallback position. Perhaps you have had conversations with work and know that they would rehire you six or 12 months after you resigned. Or perhaps you have a good network of opportunities and feel comfortable that the job market is ripe and ready for your area of expertise. If not, you are confident that your household will be financially strong enough to survive without any income while job hunting.
9. You’ve discussed it with the people that matter
It’s important to communicate your intentions with your loved ones. If you have responsibilities (such as children or caring for vulnerable people) then you need to remember that your decision will affect them too.
Your loved ones do not have to agree with your entire plan it’s common for parents and spouses to discourage entrepreneurial dreams – but as long as they have been given a chance to air their thoughts and understand where you are coming from, that’s usually enough.
(If, however, your backup plan is to move back in with your parents if your business fails then you may need a more detailed discussion!)
10. You have a support system
Having a support network is so important. When leaping this, it’s wise to find people to share both your hopes and dreams and your concerns.
Find people who have your back, whether that’s a good friend or an entrepreneurial network like the Founders Hub community.
Ensure that you have provisions in place for leaning on your support system, such as scheduling to meet for coffee and chat once a week, or attending the odd networking event or webinar.
11. Your business has been tested, tweaked, and proven
In an ideal world, you should already have a regular customer flow before quitting your day job. Even better, you should have repeat clients who are coming back for more.
Naturally, not all businesses are that simple. However, you should at least have done your research. You should have identified your market and know your competition, and have a clear picture of your pricing so you can estimate potential profits and expenses.
12. Your business is always on your mind
Not every side hustle needs to be a fully-fledged business. Some don’t need to scale and are good enough to get extra cash. Perhaps you’re offering ironing services, which you currently do in the evenings or on weekends when you’re watching TV? That’s fine. But if you were having to iron all day every day, how would you feel? Bored, we guess, unless you LOVE ironing and watching TV all day.
On the other hand, if you simply can’t stop thinking about your side hustle then it’s a different story. You are probably seeking that new challenge.
13. You’ve learnt all your need-to-knows
In the early stages of business, it will probably just be you. With that in mind, be sure you’ve learned the essentials you need for running your business. We recommend you take a few online courses or read up as much about running a small business to get ready before you leap.
Don’t stick to what you’re comfortable with: you may need to know how to do basic bookkeeping, update your website and social channels, and how to generate leads.
14. The market is ready for you
While there are lots of unexpected benefits to starting a business in a recession, it’s worth ensuring you know enough about how the market you’re entering is affected by economical changes, including the status quo.
Slow and steady wins the race
When you are only concentrating on little tasks, it can be hard to feel that this is contributing to your big business visions, but remember that this is usually the only way to build a business.
Keep your business small for as long as possible that way you’re less likely to make the mistakes that can cost you when you rush ahead without reflection and consideration.
Business is all about small, achievable steps, not mighty overwhelming leaps.
If possible, ask your employer for flexible working or to go part-time and reduce your hours if you can, or you could perhaps even hire someone to help you with your sideline part-time if you think that is more cost-effective.
Give yourself a deadline
If you’ve read this far and feel like you’re confident that you have all the plans in place but you’re still scared of leaping, then don’t worry. That’s natural.
As we’ve mentioned before, fear of success is just as significant as fear of failure. With that in mind, give yourself a deadline. Research proves that you’ll be more likely to accomplish something if you hold yourself accountable.
During this time, you can develop your brand image and register your business properly so that it feels like and is a fully-fledged, professional business when you start.
For more advice on how to make your side hustle into a successful business, talk to one of our other founders by joining the Founders Hub community – it’s completely free.