Nearly half of working Americans — including 43% of full-time employees — have a side business on top of their primary job. One in three of them needs this second job to cover basic living expenses like food and rent. Despite the stressful necessity behind working a side gig, 27% say they’re more passionate about it than they are about their primary position. These hardworking people dream of one day turning such passion projects into full-time opportunities.
If you’re looking become a entrepreneur, now might be the perfect time. Whether you’re unsatisfied at work, in need of more job security or simply wish to work from home, it’s totally possible to transition your side business to your full-time job. That said, there are several things you must accomplish during this crucial period to ensure long-term growth and success.
1. Refine Your Idea
If you’ve been in business long enough to grow a sizable customer base, you know there’s a viable market for your goods and services. At this point, there’s potential for growth, but is the demand there? Refining your business idea will help you better target your audience and perfect your craft so you’re ready for expansion and rapid growth in the coming months and years.
Still looking for an idea? Here are 105 Side Business Ideas for Full Time Workers
Draft an Overview
First, draft a quick overview of your business. What kind of state is it in currently? Are you struggling to make ends meet, or are you already turning a profit? Where do you see yourself — and your business — in five years? Put pen to paper and write down all the details so you know exactly what you’re working with and striving toward.
Clarify Your Target Audience
Who is your target audience, exactly? If you still aren’t sure, now’s the time to sit down and figure it out. Maybe you’ve narrowed it down to simply include friends, family and locals. Perhaps your demographic is too broad, and your marketing campaign is falling on deaf ears. Either way, clarifying your customer base can help you determine where to invest your time and efforts as you transition to a full-time job.
Not sure who your target audience is? Narrow down and validate your business idea
Consider buying a franchise if you think your market is too small to generate steady demand and subsequent revenue. This option allows you to use your leadership and entrepreneurial skills without building a business from the ground up. The only potential downside is that purchasing a franchise can cost $500,000 to $1 million. You’ll also have to keep up with ongoing fees and mandates that can eat into profits and slash your salary.
2. Develop a Business Plan
Next, develop a business plan to address your company’s purpose, finances and long-term growth trajectory. This step might feel unnecessary if you’ve been hustling for a while. However, putting the details in writing will help you avoid costly mistakes and prepare you for questions from investors if you need funding.
Write an Executive Summary
Speaking of funding, writing a thorough executive summary is a surefire way to get it. This might be the only part of your business proposal that investors will read, so it must be persuasive and convincing. Use language that resonates with readers to clearly explain what your company does. Include SMART goals to ensure clarity, focus and motivation moving forward. Be sure to reference your business overview for more details.
Review Operations and Management
How will your company run? Who will manage day-to-day business operations? Review these details and include them in your business plan. Highlight any human resources professionals you might have and consider hiring a few if you don’t have any. After all, you can’t wear a dozen different hats forever. Eventually, you’ll need some help, so consider who you might add to the team as your business expands.
Consider an Exit Strategy
It’s easy to forget about exit strategies in the excitement of transitioning your side hustle to a full-time job. However, having some idea of how you’ll leave or dissolve the company is just as important. What will you do if things don’t go to plan? How will you exit the business if they do? Who will replace you? Odds are you won’t be with your startup forever, regardless of how successful it is, so it’s wise to plan for your departure.
3. Assess Your Finances
Getting your finances in order is key to transitioning your business into a full-time job. Do you have the means to fund your startup? Will it pay enough for you to quit your primary job? Many new companies fail because they run out of money before turning a profit, so you must assess your finances and budget accordingly. Otherwise, you might have to work both jobs — or crawl back to your old boss if you make too many costly mistakes.
Earn a Safety Net
Saving a year’s worth of expenses leaves some room for error and can eliminate worry during the transition period. However, saving enough to cover three to six months’ worth of personal and professional expenses gives you a reasonable runway to jumpstart your business. Keep your day job and save up. You can put in your two-week notice once you have enough cash in the bank. For now, resist the urge to quit and keep hustling at both jobs.
Find Health Insurance
Finding affordable health insurance is often difficult for self-employed individuals and small-business owners, but it is possible. If you don’t have any workers, look for low-cost or free coverage for self-employed Americans. You may also be eligible for premium tax credits, which can help lower the overall cost. If you have employees, apply for small-business health insurance so both you and your staff are covered.
Regardless of how much you save, it’s important to start bookkeeping now. Otherwise, you won’t have a clear picture of how much you’ve spent — and will continue to spend — on your business. At its most basic, bookkeeping tracks revenue and expenses. However, you should also track existing assets like inventory and obligations like debts and accounts payable. Start bookkeeping with a simple spreadsheet and upgrade to software after completing the transition to full time.
Consider Funding Options
If, after assessing your finances, you find your savings inefficient to cover the transition, consider alternative funding options. Check with traditional lenders first. Then, look to community development financial institutions and venture capitalists if you lack a good credit score or physical collateral. Crowdfunding and grants can also provide additional funding that you typically don’t have to pay back, so remember to tap into those sources if standard financing isn’t available.
4. Craft a Marketing Strategy
Marketing is a huge part of getting your small business up and running, especially if you want to earn a decent profit right out of the gate. After all, you won’t make much revenue if no one’s aware of your startup. As a small-business owner, it’s your responsibility to advertise your target audience and bring in new clients. Analyze your current customer base and craft a marketing strategy to attract and retain shoppers within the same demographic.
Optimize for SEO
Search engine optimization is one of the most cost-effective ways to reach customers and drive sales. Therefore, it should be a key element in your marketing strategy. In addition to improving your website’s searchability and visibility, SEO will build trust, increase engagement and create a better user experience. If you’re unfamiliar with search algorithms and keywords, consider outsourcing your SEO expertise. Best practices are always changing, so having an expert will help you keep up to date.
Utilize Multiple Marketing Channels
Reach a wider audience and boost website traffic by utilizing multiple marketing channels. In addition to your company website, you should also reach customers through social media, email, opt-in forms and newsletters. Diversifying your approach in such a way will build trust and respect among your target audience. Plus, they’ll see your ads at every turn, which can prompt them to make more purchases over time.
Invest in Performance Metrics
Attracting clients will take some trial and error, which is why you should invest in performance metrics from the very beginning. Keep track of your marketing campaigns by downloading performance software to collect hard data. Distributing surveys to current customers can also provide some insight into which marketing methods work best for your small business. Analyze the data and make adjustments accordingly.
5. Meet All Legal Requirements
Starting your own business comes with its fair share of legal requirements, some of which you probably already abide by. However, transitioning your company to full time will likely entail more paperwork and legalities. You must adhere to these statutory requirements to ensure your business checks all the boxes and is legitimate in the eyes of the law. Otherwise, it may hit you with penalties and fees that could shut down your whole operation.
Choose a Structure and Name
Before you can register your company, you must choose a business structure and permanent name for it. Look into sole proprietorships, partnerships, limited liability companies and corporations to determine what’s best for you. The entity you choose will affect everything from taxes to liabilities, so choose carefully. Then, register your business name to trademark it for extra legal protection.
Register Your Business
Register your business with the government and the Internal Revenue Service. This step is especially important if clients have paid under the table thus far. Go the legal route by applying for an employer identification number to avoid getting in trouble with the IRS. Then, determine whether you need articles of incorporation or an operating agreement to receive approval. Fill out these documents before going full time to ensure long-term success and minimal hiccups along the way.
Apply for Licenses and Permits
Some companies may also require licenses or permits for legal operation. Therefore, you must do your research and apply for all necessary federal, state and local authorizations before transitioning to full time. Use the Small Business Association’s database to search by state and company type. Then, apply for a commercial driver’s license and seller’s permit if your state and type of business require them.
6. Find Your Community
Most blossoming entrepreneurs don’t have an extensive professional network. Instead, they must find a community and form new connections to grow and expand. Whether you want to hire staff, befriend fellow business owners or find a mentor, you’re bound to create a solid community of professionals the closer you get to going full time.
Expand Your Team
Your business might be a one-man show right now, but you’ll likely need to hire help if you want to transition it to full time. Expand your team by hiring human resource professionals, bookkeepers and other staff. Delegate tasks and create departments as your company grows. Then, try to cross-train team members so everyone can fill multiple roles and business won’t come to a standstill if you lose one or two people.
Befriend Fellow Entrepreneurs
Individuals that transition their company to a full-time job often find comfort and encouragement in fellow entrepreneurs. Find a community of like-minded professionals by networking in-person and online. Join social media groups for startups and look to more seasoned business owners for tips and advice. You can also use the space to form partnerships, share struggles and learn from others’ mistakes so you don’t follow in their footsteps.
Find a Mentor
More than 90% of business owners believe mentors directly impact a company’s success, especially during the early years. Their input and guidance are key to your growth and survival. Look for a mentor at other small businesses in your community, or go to industry events to find professionals who’ve walked the same road as you. You can also join a professional association or use your alumni network to connect with someone.
Turn Your Passions Into Profits
Transitioning out of your current job and into a new one is never easy, especially when it’s also your passion project. However, if you believe in yourself, commit to the process and plan ahead, you’ll set yourself up for success in the long run. Soon, your side business will be your main source of income, and you won’t have to worry about having a second job — or working for someone other than yourself — again.
Devin Partida is a full-time writer and blogger, as well as the Editor-in-Chief of ReHack.com. She specialized in topics involving technology, remote work and entrepreneurial career development. Devin has been able to grow her writing portfolio and make her passion her full-time job by writing for well-known publications like Entrepreneur, AOL, Yahoo! Finance, Worth, Business2Community, and others. To read more from Devin, please visit her portfolio at devinpartida.com