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How I Turned My Side Hustle to Full-Time Business In 2 Years – Ad | This is a paid partnership with Superscript
Turning a side hustle or passion project into a full-time business that replaces your job is the dream for millions of people.
It took me exactly 2 years and 4 months to go from a side hustle idea to replacing my 6-figure job. I took that leap during the lockdown in April 2020.
Today I want to walk you through some reflections on how I moved from starting a side hustle to running it as a full-time business.
These reflections will be weaved into a checklist of 12 things that you should prioritise if you want to make the same move yourself.
If you’d like to be mentored hand in hand over a few months in this transition, then feel free to contact me.
How To Turn Your Side Hustle Into Full-Time Business
Having run a business successfully for over 3 years now, here is a checklist of things you should consider top priority:
1. Your Why
This is your core motivation for running your own business full time.
Some people want to run their own business because they want to become their own boss. If that’s you, then it’s good motivation for taking the leap.
I love this quiz that helps you figure out what kind of boss you would be. It also highlights your key strengths and blind spots you should watch out for as your business grows.
Superscript’s research found that the greatest motivations for wanting to run your business full time include:
- Greater control over your schedule (27%)
- The satisfaction of building something yourself (19%)
- Following your passion (17%)
- The potential to earn more money (12%)
Whatever your reason, it is important to be clear on why this path is ideal for you.
Action Step: Write down 3 specific reasons why you want to go from running a Side Hustle to creating a full-time business.
2. Who You’re Serving and Why
One of the biggest reasons why people don’t succeed in business is because they don’t have clarity on who they’re serving and why.
By this I mean:
Who is your ideal customer?
What are they struggling with? I.e. What pain are they having that needs remedying?
Why is your product or service suited to them?
How is your product or service different from everything else out there?
Answers to these questions alone are important for taking you from making losses in your side hustle or business to becoming very profitable.
Action Step: Decide on what your Customer Avatar looks like. Be as specific as possible.
3. Get Your Mindset Right
Running a business successfully requires a radical shift from having a consumer mindset to having a producer mindset.
Producers focus on creating value for people by solving problems.
When you move from a side hustle to a full-time business, you find that you create more value by solving more problems for more people.
The more problems you solve successfully, the more revenue you generate.
I found that the best ways to get the mindset right are:
- Make the effort to surround yourself with 1 – 3 other people who are also running a small business.
- Read niche books on specific subjects such as creativity, marketing, sales, etc. Here is my recommended book list.
- Get some coaching from someone you find inspiring. It stops you guessing or making mistakes. Plus, you get to build a solid relationship.
Action Step: Commit to doing one of the above over the next 30 days to move you closer to becoming a net producer.
4. Be Clear On Your Vision
It took going on a personal journey to financial independence for me to realise that not everyone sees that future that you see.
When I then started my own business, I also understood that having a vision that I believed and could articulate was necessary for thriving in business.
If you had a blank sheet of paper, could you paint a picture of what you want to be doing 10 years from now?
And what role does the business that you want to create play in that picture?
Although it would be pretty unclear, having some ideas helps.
Having this thought and writing it down is a form of commitment to yourself to seek a life that you desire.
For me, the next 10 years involved family life, travelling, running the business successfully with my wife (Mary) to help millions of people create Financial Joy in their lives and have fun doing it.
You need to walk back to the present day from your own version of the 10-year vision.
What would that picture look like in 5 years? 3 years? And 1 year from now?. With these other time scales, you’re now getting more specific about your goals in numbers.
The picture 1 year from now is what you then turn into quarter rocks i.e. 3 – 7 key goals that you want to achieve each quarter to get you to your one-year picture.
Action Step: Put aside 30 minutes this weekend, grab a blank sheet of paper and pencil, and write down what you want your life to look like 10 years from now.
5. Create a Worst Case Scenario Budget
One thing that helped me a lot when I considered taking the leap to run my business full time was creating a bare-bones budget.
This budget looked at my monthly expenses assuming I only paid for the absolutely necessary expenses.
So for example, I stripped out holidays, takeaways, etc.
Although this was just a scenario, it helped me see the necessary costs that I needed the business to cover for this to be sustainable personally.
Make sure that you have at least 6 months of necessary expenses set aside before taking the leap.
Action Step: Check out our super practical Budget For Life tool for people who love simplicity.
6. Choose The Right Business Structure
The type of business structure that you start with matters a lot because there are tax implications and you also get different levels of protection.
You can start as a Sole Trader or as a Limited Company and there are various pros and cons for both.
I personally started as a Limited Company from the start because:
- I always wanted to create a business that made more than £50,000 in revenues per annum one day.
- It offered me more protection from being sued personally, due to the veil of incorporation that comes with a Limited company.
Action Step: Decide on what business structure best suits you in your first next 12 – 18 months in business.
If you’re currently making less than £50K per annum in your job and would most likely make less than that as you start your business, then it might make sense to start a Sole Trader.
7. Get Flexible Insurance Cover
Insurance is one of the last things that newbie entrepreneurs usually think about, although in my experience, it should be given top priority from the start.
A good way to think about insurance is to consider what type of risks your side hustle or business faces.
And then ask yourself – “Could I afford the cost of a claim against me in association with this type of risk?”
This process will help you determine what type of insurance you might need.
For example, a tutor works with other people and focuses on imparting knowledge. They’ll likely need:
- Professional Indemnity Insurance (To protect yourself against claims resulting from your advice/guide which negatively impacts your client. Or not fulfilling a contract).
- Public Liability Insurance (to cover legal and compensation costs for the risk that a student is injured or their property damaged whilst working with them).
You should also consider employers’ liability if you are thinking about making your first hire, and business contents cover for your equipment like laptops/phones, etc.
Another factor to consider is the type of insurer that you go with.
As a new business owner, I prefer a modern insurer and like something that is flexible and subscription-based.
Action Step: An excellent provider to consider is Superscript, who can provide you with bespoke business insurance with 5-star support in under 10 minutes.
They offer monthly subscriptions, no long-term fixed contracts, and you can amend or change your subscription at any time.
8. Open a Bank Account With Various Pots
You’d be surprised by how many people start a business and do other things without considering how they’ll get paid.
I’d highly recommend opening a bank account for your business specifically, and one that gives you the option to have different savings pots.
These pots help you to put money aside to pay yourself, save for paying your tax, and budget for operational costs.
Action Step: Open a business account with a modern digital bank.
9. Introduce Some Recurring Income
One of the best pieces of advice that I ever received was to introduce a recurring element to our revenue.
An important mindset shift to have is to realise that every business type can have an element of recurring revenue introduced to their business.
Whether you run a cleaning business, or you’re a gardener or you bake cakes. It all comes down to your level of creativity and imagination.
This idea of introducing a recurring revenue stream is what sowed the seed for helping us launch Financial Joy Academy.
You can also introduce a recurring income element to your business by negotiating retainers with a selection of customers.
Action Step: A must-read book is Automatic Customer
10. Get Set-Up To Pay Tax
Everyone knows that with starting a business comes the need to pay tax on profits.
However, the admin part of setting up your business to pay tax can easily be ignored until it becomes too late (leading to penalties).
If necessary, speak to an accountant for some one-off advice to make sure that you set up properly.
Don;t forget to use the saving pots in point 8 above to save separately for your tax bill for each financial year.
Action Step: Read this Complete Guide To Tax For Side Hustles
11. Network With Others
This is one of the most powerful determinants of success in business. I’m not naturally extroverted and most of my career I’ve pretty much done my own thing.
However, going on the business journey can get quite lonely and I found it very helpful to reach out to others.
In particular, try to find others who are doing business in your niche. This helps with sharing ideas and getting answers to questions such as knowing what you should price your products or services at.
Referral-led networking is particularly powerful. If you meet someone with a similar mindset and vibes, chances are they’ll know others like them.
This method of asking people I know to introduce me to others has been a good way for me to network and grow with other business owners.
I’ve also found it useful to join paid memberships that attract people of a similar mindset.
Action Step: Seek out a business community of other entrepreneurs. Consider paying to join one as you get better quality of people and the expense is tax-deductible.
12. Look After Your Mental Health
The last 12 months with the global pandemic has shown us all why looking after our mental health should be top priority.
In the first few months of taking the leap from side hustle to full-time business, I suffered some anxiety.
This was due to worry around being judged if I failed and concerns as to whether the business could be sustainable.
We also happened to be going through a lockdown when I took that leap, and so all this added together had a negative impact on my mental health.
I found speaking about it with trusted friends and family helped. Taking regular walks daily amongst nature and focusing on getting decent sleep helped too.
In fact, Superscript’s research found that physical exercises are the most popular way that the self-employed look after their mental health – 39% said so.
Taking breaks away from social media also helped because I then wasn’t focused on comparing myself to others.
39% of self-employed people from the above survey said that speaking with family and friends helped their mental health, and 34% said reading. Perhaps for the same reason, I took breaks away from social media.
Action Step: Start practicing daily walks for 30 – 60 minutes. It helps with gaining clarity and to figure out what to focus on next.
The journey of moving from side hustle to full-time business can be very fulfilling and financially rewarding, but it requires being practical and planning the transition well.
It should also be seen as a journey of learning, whilst accepting that any form of failure is part of the learning process.
Saying that though, using the above checklist to begin that journey should give you a really high chance of success. Feel free to write to me if you need some mentoring on this journey.