During the national COVID-19 lockdown, many South Africans took up side hustles to help make up for a drop in their income or to make productive use of their extra time at home. If you were one of these people and are now sitting with a viable side business, you could be wondering if it could become your full-time job.
Given that there is currently a recession and higher unemployment, leaving your job to go out on your own is a big step to take. How can you tell if the signs are pointing towards a new career for you as a full-time freelancer or entrepreneur, and take your passion project to the next level. Here are a few ways to tell if your side hustle could become a thriving full-time business:
It makes financial sense
The starting point is to ask yourself whether you are financially ready to take the plunge. As a starting point, you should have at least three and preferably six months of cash reserves in the bank. This can help tide you over while you are starting to generate income from your new business. You also need to do the sums to see if the income you can generate from taking your side hustle full-time, will be able to pay the bills and support you and your family.
Do bear in mind that going solo means losing company perks you may currently be enjoying like medical aid or paid leave, so you need to also evaluate if your side hustle earnings can be enough to compensate for that financial impact? It’s also important to evaluate if your side hustle can truly be profitable after expenses like raw materials, time, utility costs, petrol and government taxes. It may be helpful to talk with an accountant or tax practitioner if you are unsure of the financial implications.
You can see a brighter future in your side hustle than your day job
Do you feel like you’re stuck in a dead-end job, while your side hustle is going places? If you’re enjoying your side hustle and you are getting a sense of fulfilment from it, ask yourself whether you would feel the same if you were doing it full time.
If you feel that your career has stagnated – in terms of financial opportunity, intellectual stimulation, learning opportunities – your side hustle may have more to offer you in the longer run. You may want to take the time to evaluate the status of your current job and assess your future.
You no longer have time for both jobs
Some people can work for years at running a side hustle and holding down a full-time job, especially if the former is something they would do anyway for fun or as a creative outlet. Others find it difficult to plug away at one job during the weekdays and another in the evenings or on the weekend. If your side business has taken off to the extent that you’re overwhelmed, it might be time to choose. If you need to turn away lucrative side work you’d love to do, it could be a sign to consider if your side hustle is ready to become your main hustle.
You have mastered the business basics
Running a side hustle is a good way to try out entrepreneurship with a safety net. If you’ve been at it for a number of months, you may have learned a great deal about marketing and branding, client relationship management, financial record keeping, and negotiating with suppliers. If you feel you have a good handle on the aspects of running your business, you could be ready to go at it alone full-time. You may also want to consider having some advisors to help you along your entrepreneurial journey.
Risk and reward
In these volatile times, striking out on your own isn’t easy. In fact, it can be downright terrifying. Take the time to calculate the numbers, the viability of your idea, assess your competition, draw up a business plan, and think about how you can make your dreams a reality. It’s about striking the right balance between economic reality and your aspirations for the future.