Not everyone has the financial means to jump right into entrepreneurship and start their own business — and you shouldn’t have to. Many small business owners will form an entity such as an LLC and kickstart their side hustle while still working their everyday 9-to-5 job (which is smart). But the question eventually arises: how can you take that side business and turn it into your full-time reality? It’s actually not that difficult if you grow your business steadily and follow the steps provided below.
1. Create a Business Plan
Before you even consider leaving your job to grow your business into a full-time gig, you need to create a business plan. Think of a business plan as your business roadmap. It lays the groundwork and foundation for your business goals, as well as how you plan to take your company from point A to point B. If you’ll be looking for investors, they’ll want to see a business plan before they decide whether to back your idea.
Here are some key elements of your business plan that you’ll need to lay out as you craft a plan to grow your business:
- Executive Summary
- Products and Services
- Market and Competitor Analysis
- Marketing Strategy
- Operations and Logistics
- Cost and Pricing Strategy
- Financial Forecasts
Creating a business plan will take time, and it’s not something you should rush. It needs to be well thought out and extremely descriptive. If you are unsure how to write a business plan, check out these two examples (a fitness business plan and a food truck business plan), which you can use as outlines.
2. Look up Business Name Availability
With a business plan in place, it’s time to finalize a name and legal entity for your soon-to-be-full-time business. Let’s start with the name.
Each state has a website that will allow you to search for business names and see if they are available. Simply go into Google and type “[your state] business name search,” and you will find a link to complete your search. Once there, type in the name you want to use, and it will tell you if someone currently owns that business name or whether it’s available to register and use.
Obviously, if the name is already in use, you will not be able to register it. If you try, you’ll get a denial notice and must go back to the drawing board and register a new unique business name.
If you find your business name is available, you can also consider registering a trademark for the name as well. Incfile has an easy online service that will help you trademark your business name.
3. Register Your Business
If you plan on creating a business structure without a partner, consider forming an LLC. Registering your business as an LLC will give you protection for your personal assets. A sole proprietorship (i.e., a business with no formal legal structure) offers you no protection at all. If something happens to your business such as a lawsuit, you will personally be on the hook for everything (since there’s no legal separation between you and your company). Unfortunately, this could lead to losing your home and personal property, which is extremely scary to think about.
Regardless of the business structure you choose, you’ll want to keep your personal and business affairs separate. We’ll discuss this in more detail later in the article.
Once you have registered your business, you can move forward with growing your revenue so you can leave your job and work completely on what was once your side hustle or hobby.
4. Check for Additional Licenses
Just because you received a notice that your business structure was approved does not mean you can start legally operating your business right away. Depending on the type of business you are conducting, you may need various licenses. This can include local and state licenses you need to conduct business in your area, as well as industry licenses.
Before you grow your business, you need to check with your local and state governments to see what regulations are in place for business owners (and whether special licenses are necessary for you to do business where you live). If so, get these in place as soon as possible to keep things moving along.
Additionally, industry licenses may need to be filed in order to legally operate your business. For example, let’s build on the food truck business plan above. In this instance, you would need special permits and licenses to conduct business and actually use your food truck. It’s always a good idea to do your own research and contact your local and state governments to ensure you comply with the rules and regulations — you don’t want to be penalized and wind up with a fine or worse for not following protocol.
Incfile also has a business license research service that can help you determine exactly what you need to complete.
5. Protect Yourself and Your Business
The last thing you need is legal trouble when you are trying to grow your business. Legal issues will not only set you back financially, but they can also completely destroy your business.
Because you are separating your personal and business assets through your business structure, one way to go further is to file for an EIN (employer identification number). Think of this as the social security number of your business. Applying for your EIN is fairly simple and straightforward — you can go to the IRS website get your EIN for free. This number will help you file your taxes each year, and it’s necessary to open up a business bank account…which rolls us directly into this next topic.
Separating your personal assets from your business also means using separate bank accounts. Mixing business and personal finances can leave you with a headache, especially come tax time — and if you ever get audited, you’ll need to prove what money came from where and how it was spent.
Something else you will need is an attorney who works with businesses like yours. Unfortunately, in today’s world, there are people who might want to damage your business — especially if you are a threat to theirs. When you grow your business, you will be essentially taking market share from competitors. Protect yourself by hiring an attorney who can handle any legal issues that may arise. Use their expertise to create agreements and contracts you may need to conduct business, and have them read over any contracts given to you by other businesses to ensure you know what you’re signing.
6. Put in the Work and Have Fun!
Now for the fun part…THE WORK! Nothing in your business will work if you don’t — and if you think owning your own business is going to be a walk in the park, I’m here to tell you it’s not.
If you want to grow your business, it’s going to take a lot of work, strategy and execution. You will have ups and downs. You will question why you made the leap of faith to turn your side hustle into a full-time reality. You will have days where you will want to quit and go back to working a normal 9-5 job. But you’ll also have days where you understand exactly why you made the jump into entrepreneurship and owning your own business. I’m not saying it will be easy — but it will be worth it.