How To Go Full-Time With A Side-Hustle

A majority of small business owners will tell you their business first started as a small side hustle, or maybe even just a hobby at the beginning. They enjoyed doing X, Y, and Z for others, made a decent income from it or knew they could, and decided the idea of freedom from being an employee for someone else sound like a great idea. But what they don’t explain is how to make that jump - from hobby to full-time. It’s a piece of the story that many, like me, wanted to hear from those who had done it successfully. I figured the more I knew, the less risk there would be, and I wanted to be as prepared as I could to avoid failure. 

Over 50% of small businesses fail in the first four years. And not surprisingly, 82% off those that fail do so because of cash-flow problems (source). If you can’t stay in the green, it’s not going to work out. And I certainly did not want to spend time working hard and apply myself, and have all that time and effort to go to waste. So I took my time, planned it out, and although I’m only 9 months into my “side hustle”, I’d say so far I’ve been successful.

All my preparation, planning, and full transition are still fresh in my mind, and I’m able to take a wider look back with better perspective to give you insight in how to go full time.

Just Start

It’s simple. Like NIKE, "Just Do It.” You can talk all you want about becoming a legit business, but talking isn’t going to help you get there. My biggest piece of advice for any one who wants to start their own business it to just start. Start by getting a free website. Start by finding your first clients or customers - maybe they’re family or friends. Start by making your first product to sell on Etsy. If you don’t start, you’re no better off than you were yesterday.

Get Official

Whether you want to be an LLC or S-Corp (do some research on what’s best for you), you gotta get official with the government. Not only do you need to for tax purposes but it tells your clients and customers your professional. The process is pretty easy. I just Googled “Register A Business In Maryland” (where I reside) and found a Maryland government website that is for exactly that. There’s some small fees, but the process is pretty simple and all said and done was under $200, which includes your EIN number. You’ll need this to pay taxes.

Sure, maybe your Aunt Mildred knits gloves and only sells a few pairs at a Christmas Craft Fair, and doesn’t officially have to register as an actual business because she makes a such a small income on those few pairs each season. But you know what? She still has to pay the IRS taxes on any income she makes. Yes, there are plenty of people that run their self-made businesses off the books and don’t pay taxes, but it’s illegal, and it can catch up with you. Before you start bringing in the income, get legit.

Don’t Quit Your Day Job

It’s a very romantic notion to just pick up and quit your cushy full-time job and focus full time into your passion, with the goal of achieving greatness doing what you love. But it’s not realistic. There’s bills to be paid. And if you’re like me, a family to help support. You can’t tell what the future will hold, and starting from scratch before you’re bringing in cash from your new venture is a big gamble. Unless you have a large savings cushion it’s just not wise. And even then, why would you want to chance having to tap into your savings when there’s a smarter, safer way?

First piece of advice - keep your side-hustle just that, a side-hustle. A very busy, hard-working side-hustle. Work as much as you can in your “free-time”. Make that money in the evenings, weekends, and even lunchtime! Ask any small business owner and they’ll tell you that starting a business is hard work and take a lot of time. By keeping your day job you’ll still be bringing in a steady paycheck and making extra cash in your “free-time”. Work until your new business is doing so well that you’re over-loaded. Even then, it may be wise to hire help from a few employees before actually quitting your day-job and going full-time.

Do The Calculations

When it comes down to it, it’s all about the numbers.

So you’ve been doing this side hustle thing for a while, you’re “free time” hours are completely filled up with client work or production on products. You’re bringing in the cash and your business bank account is filling up. Now what? Get a piece of paper and your calculator out, and start running the numbers. 

First, calculate how much you need to pay yourself to live the way you want to live. Maybe you don’t want to quit your day job until you side-hustle is bringing in the same amount, or maybe you’re able to take a little hit, and live on a tighter budget as long as you’re doing what you love. Make sure you take all your existing benefits into account (i.e. health, 401k, etc.) and plan ahead! If you’re lucky, maybe you can switch to your spouses insurance instead. Unfortunately, my health insurance was with my previous day-job, and my husband owns his own business too, so we had to get private health insurance - and it’s not cheap!

Also, just because you’re able to make say, $6000 in net revenue or net sales, doesn’t mean that’s how much you get to pay yourself. After you account for all your business expenses (supplies, bills, etc.), taxes (my accountant has suggested to save 50% to be safe), plus any you want to continue to invest back in your business, you’re left with net profit or net income. That’s how much you can pay yourself.

Yep - that’s the downfall of small business ownership. It’s expensive to own a business. But when you charge the right amount, and when it’s calculated and budgeted right, you can grow, invest back in your company, and get to reap the benefits of small business ownership.

Make The Jump

So you know how much you need to make, you’re pulling the money, everything’s going great, but you just don’t have enough hours in the day to grow. So now what?

It’s time to make the jump to full-time small business ownership!

First, it’s probably a good idea to have a cushion on money in you bank account, just in case your 40-hours a week doesn’t quite fill up - with client hours, or products selling - right away. And if you can book those hours in advance, or have sales prior to making them, that’s great too!

Now it’s time to put in your 2-week notice with your job, schedule your new health insurance starting, and get to work! It’s scary, but one of the best things you can do is talk to someone who’s been successful in doing it. Not only will they be able to help you with any questions you may have, but knowing they’re been successful in making the jump should give you motivation to do it too.

So, are you just thinking about starting a side hustle? Are you considering making the jump to full-time soon, or have you done it successfully? Share your story in the comments! The more small business owners help other small business owners, the more chance we can all become successful!

 
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Taking Maternity Leave Owning A Business

I understand this topic doesn’t truly fit everyone. But I also know there isn’t a lot of information out there for those who run a small business and need to plan a self-scheduled maternity leave. So here’s how I did it.

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When my husband and I found out we were expecting Baby #3 in January 2018, we knew so many things would change for our family. Besides adding yet another mouth to feed and tiny human to love, one of those things would be leaving my full-time, 13-year, nine (well eight) a.m. to five p.m., corporate career to stay home with our 3.5 year old and 2 year old daughters, as well as this new edition, a baby boy who was due in September. Daycare for three kids is just too expensive.

We actually calculated we could fortunately live off my husband’s income alone, but would need to cut back our monthly spending quite a bit. But being able to bring in additional income would allow us to continue our lifestyle and continue to pursue our personal financial goals. And to top it off, owning my own business has always been a dream of mine. I just never had the big push to do it.

However, this time, the new baby on the way somewhat forced my hand (in a positive way) and I finally took the plunge and started Lauren Austin Creative, LLC in March of 2018.

But there were so many questions. Here I was with a really new business, my first one, and I was planning on taking a leave of absence only 6 months into it. There were so many questions I had to answer.

How much time should I take?

Corporations, like the one I worked for over the last decade, have mandated state and federal laws they must follow regarding leave, and additional benefits they offer. For my past two children’s births, when I was working for that corporation, I received 6 weeks paid leave and the option to take 6 weeks of unpaid leave as well, which fortunately for my family I was always able to take. But when running a personal business, even just 6 weeks off isn’t feasible - both for both my clients and for me. That’s 6 weeks of time away from my clients and 6 weeks of time I’m not being paid. Plus, that’s 6 weeks that I’m leaving the business I’ve worked hard on the last half year, and I didn’t want to backtrack on any of that time I put in.

At the same time, bringing a new baby home is life-changing, and sleep depriving, regardless of how many kids you already have. I was scheduled to have yet another repeat C-section, which results in a more involved recovery. I knew I’d have to take at least some time to heal and get into the flow of a new baby. Considering this, plus being that I’m a virtual, online serviced-based business with part-time hours at the moment, I factored I could take a full 3 weeks off before diving back in and getting into the swing of things.

But of course, figuring out a number is going to be based on the type of business, how you work, how many customers or clients you have, and how long you feel you can be away from your business.

And there’s also more options than cut and dry, opened and closed. You could take half-days or come back part-time. Or if you feel up to it, answer emails, but not do work. And although I seriously thought about subcontracting my work during this time, I didn’t feel like it was needed. But subcontracting to someone else while you’re out, or at least for your day-to-day work can be valuable. Definitely research your options.

How do I prepare my clients? 

This summer, a few months after I officially launched Lauren Austin Creative, I was already working with a few clients. I was open and honest with them about the baby and taking leave from the beginning, and reassured them the plan was to organized and plan for them as much in advance of my leave. And you know what? They still hired me knowing I’d be taking time off in September.

Sure, it took more work up front on my end, creating and scheduling social media content moving around 3 weeks of hours to the earlier part of September and into October. But it allowed my clients to continue on as regular while I was actually out. And of course I can’t thank them enough for being flexible and understanding enough.

Again, this is going to depend on the type of client you have, and how much work you typically provide them. Do you need to stay in contact with them? Are you more project based, or do you help them daily? All questions you’ll need to ask yourself.

How do I prepare my business?

My clients always come first before my own business. But I also knew I couldn’t leave my “virtual baby”, my business, in the dust either. So a month or two in advance, I started letting my subscribers, followers, and potential new clients know my plans as well - that I’d be “closed” for a few weeks, but that they could always contact me for when I return. And so that I didn’t seem to fall off the earth, and that I stayed in my customers daily viewing, I started creating and scheduling my own social media content to post while I was out.

I also knew, like this post, I’d probably have to do a little work while on leave, but I honestly enjoy it, and love having an outlet to work on that doesn’t involve feedings and rocking a baby (although, there’s plenty of that great stuff too!)

If you have employees, which I do not, that definitely gets quite complicated. Either you can leave someone trust worthy to manage the business while you’re gone, or keep a solid foot in the door on your leave to keep your employees going.

If you’re a product based business, you could always close down shop, but take orders, letting customers know they won’t ship until your back. Or you could bulk up all your handmade wares before you take leave, so all you’re doing is shipping during leave, still making sales.

Do what you want.

The one thing that’s true for all small business owners is that there’s no cut and dry answer, and no one-size-fits-all. Being a business owner, you make your own rules. Take leave, don’t take leave. Take a week or take a year. Or just cut back hours, or change services. Bring the baby to the office, or hire child care. There’s so many options for you.

My biggest piece of advice is to plan, and plan early. The more time you have before your leave, the better organized and prepared you can be, and in turn, run the best business you can.

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