Unless you happen to have very rich and very supportive relatives, or have some incredibly deep savings, chances are you’re one of the majority of entrepreneurs currently working on a business while working another job.
How many of you reading this article right now find yourselves working as an employee by day, and as an entrepreneur at night? I’m guessing a lot!
And don’t worry, you’re not doing anything wrong. In fact, it might even be the best approach. A study by the Academy of Management found that businesses that started off while the founder was still employed were actually 33% less likely to fail when compared to those whose founders dove straight in.
Most new businesses these days start off as side-hustles. For the modern bootstrapping entrepreneur, there really is no other choice.
The whole “needing money to live” thing can be awfully inconvenient sometimes
But if you work hard enough and have a little bit of luck, you’ll find yourself in a position to turn that passion project of yours into your main source of income. Instead of stealing away a few hours here and there from your 9-to-5, you’ll find yourself with a chance to turn your side-hustle into your full-time pursuit.
But the question is: How do you get to that point? What steps do you need to take to quit your job and finally give your business the attention it deserves? It can be very hard to kick things up to the next level, after all, and so many early entrepreneurs get stuck at the precipice, only to let their past progress fade.
Well wonder no longer, because I’m going to lay it out for you.
Here are the five essential steps you need to take in order to turn your side-hustle into a full-fledged business.
How to Turn Your Side Hustle into a Business
The first, and most crucial step in turning a side-hustle into a full-time business is to get organized.
One thing I find a lot of entrepreneurs lack is a distinct sense of specificity in their goals. It’s all well and good to dream about finally being able to work on your startup all the time, but unless you have a path to get there, it’ll forever be a dream.
The last thing you want to do is take a leap of faith only to fail at sticking the landing.
In order to take your business to the next level you’re going to first need to understand what the next level even looks like. It’s all too common for early entrepreneurs to hack away toward an ambiguous goal without ever crunching the numbers of what you really need, and tracing back the steps to getting there.
So before you quit your job, determine what needs to happen for your side-hustle to be considered successful. Once you have that in place, you can start creating a realistic timeline and start laying down the foundation you need to make the transition successfully.
In order to help you get organized, let’s first figure out what your startup needs to look like before you can start working on it full-time. To do that, you’re going to need to do a Business Model Canvas.
Recommended by the “Godfather of Silicon Valley,” Steve Blank himself, the business model canvas is a simple tool that allows you to take a step back and look at your business as objectively as possible. It highlights the nine essential elements of any business and arranges them in a way to show you how they influence one another.
Here’s a great tutorial outlining how to use the business model canvas:
What you need to do is fill out the business model canvas with what you think your business needs to look like before you can commit to it fully. Take some time to really hammer out these details, so you know exactly what it is you’re working towards.
Take that abstract idea of what success looks like out of your head and get it onto paper. Understand what critical mass means for you.
Figure out how much revenue you need to be making in order to both maintain and grow your business, while still meeting your cost of living. Be careful not to fool yourself about what you need to live. Make it as rooted in true expenses as possible. Put some thought into what resources you’ll need to ramp up, so you can start preparing. Get as granular as possible, because it’s these details that can end up hurting you later down the line if you’re not paying attention.
Remember, you have to stick that landing.
Now that you’ve figured out what needs to happen, it’s time to create a plan to get there as soon as possible. That means doing another homework exercise, this one called the Goal Pyramid.
It’s something we’re huge fans of over here at Foundr, because it allow you to visually unpack your goal and break it down into its significant milestones. It was an invaluable tool for our own founder Nathan Chan, as he work his way toward leaving his full-time job.
While it’s all well and good to know that you need X amount of money coming in, it’s not going to mean much if you’re not sure how to get there.
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With the goal pyramid, you can figure out exactly what you need to do, and what actions you need to take in order to get from side-hustle to full-time business. By mapping these milestones out with your goal pyramid, you’re giving yourself an actionable plan you can immediately start working on.
Here’s a great video by the inventor of the Goal Pyramid himself, Matthew Michalewicz, explaining how to use it.
Now that you know what key milestones you need to meet, you can now start creating for yourself a realistic timeline of what needs to get done by what time. The timeline part is important.
Giving yourself deadlines for these milestones means that you’re 91% more likely to reach them. Knowing that something needs to be done at a certain time gives you less of a reason to procrastinate and waste time.
It also allows you the opportunity to get outside of your own head and look at your progress fairly and objectively. If you don’t meet certain milestones at key dates, instead of beating yourself up about it, take a step back, do some self-reflection and ask yourself, “why?”
Chances are that you didn’t meet the goal on time because humans are just naturally bad at long-term planning. Sometimes it means that you need to change your strategy because of something unforeseen circumstances or details you may have missed.
By giving yourself a timeline, with milestones and goals to meet, you offer yourself the chance to examine what’s working and what’s not.
It’s only when you reach these milestones, and you’ve set up a solid foundation by doing so, that you know you’re ready to become a full-time entrepreneur.
Work Smarter, Not Harder
As a part-time entrepreneur you’re not going to have a lot of access to that valuable resource that we know as time.
There are only so many hours in the day and if you’re working a 9-to-5, that’s eight hours already gone. Take away another eight hours for sleep, and a few more here and there for activities like commuting, eating, and being a general human being, and what you’re left with is not a whole lot of time to work on your business.
When you’re only person working on your business, you can very easily fall into the trap of thinking that you just need more hours in the day. But having more time doesn’t necessarily mean you’re going to get more done.
Something everyone seems to forget is that you only have a finite amount of energy. It really doesn’t matter if you’ve managed to carve out a few more hours in the day here and there. If you don’t have the energy or willpower to actually work, the extra time is useless.
Many also make the classic mistake of thinking that all they need to do is reduce the number of hours they have at their current workplace. This is a smart thing to do when you’re only a few weeks away from quitting, but not so great if you haven’t already laid out your foundation.
Others will instead choose to buy more time by reducing sleep in favor of more work. This might work for a while, but before long you’ll, find yourself burnt out and without any of that precious energy to keep going.
And we’re back to square one.
It might sound counterintuitive, but the rule of thumb for any business that’s trying to scale is to remove the individual as much as possible.
That’s because the longer and harder you work on a business, the more dependent it becomes on your ability to participate. While you might see a small growth spurt from throwing more hours onto the fire, what you’re actually doing is trapping yourself.
There are natural limitations to what you can do, and if your business’s growth is based upon your personal input into it, your business simply cannot grow past a certain point. The last thing you want is a scenario where you can’t take a day off because that means your whole business comes grinding to a halt.
If you want to start working on your business full time, you need to make sure that your time and energy are being properly leveraged.
If you’re always stuck working in your business, then it means you never have any time working on your business.
Consider hiring a virtual assistant, and see if there are any tools and resources. Yes, you will be spending money and that can feel like a setback. But instead, I encourage you to look at it as a necessary investment into your own business.
This way, you can focus all your energy on the things only you can do. Whether it’s nurturing relationships with potential partners, or finding new customers and coming up with a new marketing strategy.
Go back to your business model canvas. Find out what absolutely, 100% needs to be done by you, and what can you be automated. When you finally quit your job you want to make sure that all the extra time you now have is being put to good use.
Keep Your Eyes on the Prize
I won’t lie to you. If you’re serious about turning your passion project into a full-time business, you’re going to have to prepare to be exhausted. Even if you’re working smarter, as described above, there will be a period where you’re pushing things as hard as they will go.
In order to make the transition successfully, it could take some time. Be prepared to be working 12-15 hours a day, for quite a while. When your goal is to turn your side-hustle into a profitable business as soon as possible, it’s going to take epic amounts of patience and perseverance to get through it all.
It may mean missing out on going out with friends and seeing family, and having to deal with people who just didn’t understand why you would be putting yourself through so much stress.
Before Foundr turned into a full-fledged business, it was just the side-hustle of our CEO and founder Nathan, while he worked full time as an IT consultant.
He’d work hard at high full-time job, come home and almost immediately work on Foundr for at least a couple hours a day. Every day it was a hustle to move the needle forward so that he could bring himself closer and closer to his goal.
At times, it may feel hopeless, but if you’re genuinely enjoying what you’re doing then you’ll know that the hard work will pay off eventually. Every day, just focus on pushing yourself forward, even if it’s just a little bit. Otherwise it will forever be a side project.
Something else to keep in mind while you’re on your journey to become a bona fide entrepreneur, though, is to make sure that you don’t get distracted.
Something that all entrepreneurs are guilty of is “Shiny Ball Syndrome”. It’s when you’re working on something, but then something else comes up and you’re suddenly chasing after that instead.
Don’t worry, you’re not the only one. Even veterans entrepreneurs with years of experience find themselves chasing after something new and losing focus on their original goal.
When that happens, it can spell disaster.
It’s all well and good to update your business plan as you go, depending on new circumstances. It’s only natural to pivot when one aspect of your business is working better than expected. But what you don’t want to do is try to give yourself more work by focusing solely on your new shiny toy.
Usually in these scenarios, an entrepreneur becomes so enamored with their new project that they’ll start devoting all of their precious time and energy into making it work. Unless you’ve gone ahead and tested and validated this new idea, all you’re doing is setting yourself up for failure.
What typically happens next is that because you’ve spent so much energy into this new project, your original concept will inevitably begin to fail. Unless this new project is just as good, and you’ve made a conscious decision to re-prioritize, then all you’ve done is give yourself more work.
So remember to stay focused, and have a clear understanding of what your goals are and what you need to do in order to get there.
Give Yourself a Break
I’m sure many of you reading this article will be able to remember a time when you found yourself getting bored with something you originally had a ton of passion for.
Inevitably, that feeling will come when you’re working on your side-hustle. The luster and excitement of working on something new wears off and you find yourself hating the grind that it’s become.
You find yourself questioning why you’re working late nights and weekends, missing out on going out with friends and family, and even wondering what the purpose of it all is.
Passion projects are only sustained by the amount of passion you have for it, so when that wears off, what’s next?
First of all, don’t beat yourself up about it. Realize what’s happening to you isn’t a lack of motivation, but more than likely just simple exhaustion and stress catching up with you. Recognize that these are just signs of burnout, and that it’s perfectly normal to feel that way.
Image courtesy of Toptal
To stave off burnout, remember to make time for yourself.
While you may be giving the best hours of your day to your passion project, that does not mean you’re not allowed give yourself time to relax. Remember that when your whole business lives and dies with you, then how healthy you are, both physically and mentally, is now more important than ever.
Go to the gym and exercise, invest some time into a creative hobby, or just spend an hour or two sitting down on the couch watching Netflix. Do whatever it is you need to do in order to decompress and relax.
An important part of managing your energy is giving yourself time to actually recharge.
I, for one, am a huge fan of naps, and it’s actually not that uncommon to find myself splayed out on the floor at the Foundr office.
But most importantly, remember to celebrate the small wins. For every victory that you encounter, make sure you take a moment to marvel at how far you’ve come and all you’ve achieved.
Don’t get stuck in the poisonous mindset where you think there’s always more that needs to be done, or that you that you haven’t done enough. Practice the art of being compassionate to yourself and give yourself a break.
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Ready To Turn Your Side Hustle Into a Business?
If there’s a final, super secret tip I’d want to end with, it’s the one that really applies to all progress in this wild journey of entrepreneurship—take action! One uniting trait we see among so many successful founders is their sense of will and driving urgency.
Just like it takes that sheer power of will to take the first step toward starting a business, so will you need that strong internal drive to pick your foot up off the ground and take the next big step: quitting your day job. As much as you need to be prepared, you also need to have the bravery to take the plunge, like so many others did before you. So what are you waiting for?
Are you trying to quit your day job? Taking those all important steps to running your business full time? Tell us about your own struggles or successes below in the comments.