A side hustle is a great way to supplement your income, but with some hard work and dedication you can sometimes turn it into something much more exciting than just a part-time
business. If you've been contemplating leaving your full-time job and dedicating all you've got to your side business, here are four steps to take to make sure that everything will run as smoothly as possible.
1. Make sure there's enough market potential
Before you go ahead and quit your day job, you should do a bit of market research to see clearly whether the market for your side hustle is robust enough to
build a sustainable business.
You want to ensure that there's a constant demand for whatever service or product you're offering so that you don't go through long dry spells.
If you're a remote freelancer, you might already advertise your services on Upwork. But as helpful as Upwork can be at getting you those early part-time projects, it's likely not enough to sustain a full-time endeavor. Most gigs available on Upwork tend to be relatively small and low-budget, so it's hard to see the real potential in the market through this.
As you research, you want to go beyond freelancer sites — see if there are marketplaces or online communities where clients with more extensive projects aggregate. There are usually popular "hang-out spots" for different industries, like
publishing marketplaces for freelance editing, proofreading, or book designing. Also, turn to groups and communities on LinkedIn, Twitter, and Facebook for programmers, marketers, and pretty much any other profession you can think of!
And if you're running something like a
shop on Etsy, or a pet-sitting business, the demand for your work is probably more apparent! Ask around the neighborhood, make sure that you can foster strong customer loyalty before you leap.
2. Check your finances
Another preparatory step to take is to revisit your budget and personal finances to see what state they're in. Since running a business can have a lot of overheads and isn't always as stable as a salary, it's best to go into full-time freelancing with some financial safety net. The general rule of thumb is to have six months' worth of living expenses in the banks before you go freelance full-time — so be sure that you know your living costs.
Another thing to check is your business's finances. What are the costs you have right now? How might that cost increase when you expand your business — do you need more equipment, your own office space, or perhaps even some other freelancers to help you out? Be ready to do a little
budgeting and get your systems in place to ensure that you're ready for when work picks up. You'll have to manage invoices, receipts, chase after payments, and keep track of everything.
Once you switch to a full-time business and start earning more from it, you'll also have to pay more attention to
filing your freelance tax. You don't want to have to track down all the paperwork when tax season comes around! Even if you hire an accountant to deal with all the filing, you'll still need to have all the documentation when they ask for it.
3. Register your business
There are several kinds of entities you can register as (like Sole Proprietorship, LLC, etc.) and it's highly recommended that you read up on these options or consult with an accountant about what's best for you and your business.
Another thing you should consider while you're making things official is to invest in some branding. As you're running a business now, it's good to have a professional logo and website to use as your storefront. (If it's appropriate, create a professional social media account as well!) Potential customers tend to trust you more if you have a professional image, and good branding can also give a long-lasting impression for those who might need your help again sometime in the future.
4. Find anchor clients
An anchor client is a client who's ready to pay you well and who you can rely on for consistent work in the long term. This kind of client can give you some degree of stability because of their recurring demand and willingness to pay.
Moreover, they can also become a marketing asset to you. Firstly, they can provide you with great testimonials to put on your website and social media. Given that they've got a big budget and are in constant need of your service, they also probably have some clout in the industry, which will make your testimonials that much more convincing. On top of that, they can also spread the good word about you to their contacts. It's true that in freelancing, most of the best clients come from referrals.
So aim to find yourself two or three anchor clients to boost your business. Again, this is why it's so important to look beyond freelance job marketplaces like Upwork or Fiverr, which big clients often don't use. Dive into your industry — attend conferences, join online communities, make connections with professionals — and try to know every nook, because you never know who might lead you to your dream client.
And of course, when you work with clients, it's important to build a good working relationship. Communication is key in many freelance collaborations, primarily if you work remotely and don't get to meet your clients. Be transparent and proactive in your communications — anticipate their needs, ask follow-up questions, give clarification where it's needed. If it's a long project, try to update the client now and then so that they don't feel like they're left in the dark, not knowing whether you do your work!
The bottom line
With time, hopefully, you'll get more clients approaching you than you can accept. If you do, remember that you can say no — though that is a topic for another day! Turning your side hustle into a full-time business involves a bit of planning and care, but it can be very rewarding, especially if you then get to do something you truly enjoy. Following these steps will give you a solid foundation upon which to start. Good luck!
