If you’ve been at your side hustle for six months or longer and have had success, it may be time to turn your part-time business into your full-time job. Perhaps you're confident your side hustle earnings can replace your full-time income, or you find yourself overwhelmed by the time required to keep up with your side hustle and keep your full-time job. If either is the case, it may be time to turn that lucrative side gig into your full-time career. In this article, we'll spell out the information you’ll need to expand your side business, including a list of tools and resources to help you along the way.
1. Pick a Name
Does your side hustle have a name yet? If you're ready to take your part-time business to the next level and turn it into a full-time job, it’s time to come up with a business name. Coming up with a business name can be a fun, creative process that allows you to pinpoint the strengths of your business.
Follow these five best practices for picking a successful business name:
Keep It Simple
Successful business names use few words, spell everything correctly, and don’t take a genius-level IQ to decipher. Avoid long names, puzzles, puns, or inside jokes. The more concise, the better.
Choose Something Memorable
Do thorough research to ensure you have a business name that stands out from the rest. Brainstorm, seek input from your friends, and keep track of your competitors to make your business name truly memorable.
Check for a Matching Website
Make sure you can acquire an available website or domain name that matches your business name. You can search potential domain names on a website like GoDaddy to see if your favorite is available. (Hint: While it doesn't have to be exact, you want your business website to match your business name as closely as possible.)
Make It Legal
Avoid trademark infringement by ensuring your business name isn't legally claimed, especially by one of your competitors. It’s relatively easy to search online to see if your name is legally available at the federal and state level. Many online tools are free and easy to use, plus they help sift through the limitless options available. They can be combined with tools like the Incfile Business Name Search Tool to help ensure your business name is legally viable in your state.
To transform your side hustle into a full-time job, you’ll need a business plan. This plan should include a step-by-step list explaining how you will manage and grow your business, tailored to your industry. You can refer to this plan again and again as you manage your business, especially during its first year.
Never spend more than three months on your business plan. Any longer and it will just hold you up and distract you from starting your business for real.
3. Register Your Business
Now that you have a business name and a business plan, one of the most important steps is officially registering your business. You'll need to choose a business entity and register your business as such.
LLCs are the least expensive business entities to form, and they offer an added level of protection for side hustlers looking to turn their businesses into full-time gigs. An LLC, which stands for Limited Liability Company, is a business entity that separates your business assets, liabilities, and debts from your own, and it even comes with a simplified tax process. If you decide to continue as a sole proprietor and skip the LLC registration step, you'll still have a simplified tax process, but you will not be personally protected from any of your business’s debts or liabilities.
There are also more complex business entity structures such as an S Corp, C Corp, or Nonprofit that you can choose when registering your business. If you're unsure which type of business entity you’d like to pursue, try taking Incfile’s Business Entity Quiz to narrow down your choices.
Once you decide on the type of business entity for you, you’ll need to follow all the necessary steps to register your business with your state government. Each state has different processes and registration fees. Incfile's Silver Package helps business owners navigate this stage of the process for free, allowing them to only pay the state fee.
4. Get Required Licenses and Permits
Depending on the type of products or services your business provides and where you operate, you'll need to make sure you have all the required licenses and permits before turning your side hustle into a full-time business.
This means checking requirements not only with your state, but also with your local government offices, which will let you know if there are any additional federal licenses or permits required for certain industries. Permits and licenses run the gamut from fire inspections and health permits to liquor licenses and zoning permits.
A business license is what you need to authorize your company to "do business" in a location, whether that's your town, city, county, or state. It's proof that your company is properly registered with the jurisdiction where your business is located.
Obtaining the proper licenses and permits requires time, know-how, and research. Start by understanding your specific industry and all of the unique business licenses and permits required for you to operate. Incfile’s Business License Research Package is an efficient tool that will do the research for you, letting you know exactly which licenses and permits are required based on your industry and location and how to obtain them.
5. Get an EIN
To legally turn your side hustle into an official, full-time business, you must secure your EIN (Employer Identification Number). An EIN is like a Social Security number for your business. The IRS will use this number to identify your business, and you can use it to pay your taxes. Your EIN also makes it easier for you to apply for bank loans or open a business banking account or credit card.
You have your business name, business entity, business licenses, and EIN. Your business plan is typed up and ready to go. Now, it’s time to grow your business. Don’t just let this business replace your full-time job — allow it to outgrow your wildest dreams.
Once you take on your side hustle full-time, you might find yourself busier than when you had two jobs. This is the time to focus on efficiency. How can you get more accomplished without necessarily working more hours? As they say, “Work smarter, not harder.”
Here are some ways you can efficiently manage your time:
Hire a virtual assistant to reduce stress, eliminate repetitive tasks, and more effectively manage your time.
Track how you spend your time so you can tweak your workdays to be the most productive.
Utilize time management tools to help block your day into chunks. There are many available time management tools for business owners available, including Asana, TimeCamp, or simply using Google Calendar.
7. Model Your Business After Others
Follow your competitors closely and pay attention to what works. It’s totally okay to model your business after the successful businesses you see out there, whether or not they are in your industry. Narrow down what makes your business different from the rest, and then highlight these differences in your own marketing. You might want to explore some strategic partnerships with other local businesses to help bolster your marketing efforts.
8. Open a Business Banking Account
Separate your personal finances from your business finances by opening a business banking account. This will make it much easier to manage your business expenses, track your cash flow, and file taxes.
When you have an LLC, your business banking account can provide even stronger personal protection. Your personal and business finances will be separate, which makes it easier to keep your business books tidy. Plus, it helps with payroll management down the line. Many business banking accounts even offer features that help support business accounting needs, such as compatibility with bookkeeping software, webinars, tutorials on business accounting, and more.
When searching for the right bank to open your business account with, look for these traits:
Zero- or low-minimum opening balance
Competitive interest rates on savings accounts
Strong customer service available 24/7
Online banking options with mobile-ready apps
Business credit cards and line of credit options
Amount of deposits and withdrawals allowed per month without paying a fee
9. Hire a Good Team
Once your side hustle starts really growing, you won't be able to manage everything alone anymore. To hire a team of employees to help manage your business, try turning to your existing network first.
When Should I Turn My Side Gig Into a Full-Time Job?
Still not sure if it's time to turn your side hustle into a full-time job? Answer the following five questions to help gauge if you're ready:
Is my side hustle making enough money to replace my full-time income?
How broad is my market? Do I have a large well of untapped customers that can help me grow my side hustle?
Am I overwhelmed juggling a full-time job with my side hustle?
Would my side hustle immediately benefit if I had more time to manage it?
Is there a clear path to growing my side hustle into a big success?
At the end of the day, you know yourself best. If you are a motivated, determined individual who is a self-starter, you might be ready earlier than others to throw everything into your side hustle. You might also gauge your readiness based on whether your full-time job is still fulfilling you. If you find yourself suffering at work, distracted by the dreams of growing your side hustle, then that alone might be the sign you need to tell yourself you’re ready.
Things to Do Before Turning Your Side Hustle Into a Reality
When you determine it’s finally time to turn your side hustle into your full-time job, there will be a long to-do list in addition to the important steps listed above. Your short-term list of tasks will seem lengthy, but with some organization, planning, and a little extra work, you can make the transition with grace.
Set a Deadline for Quitting Your Full-Time Job
If you find yourself in a position where you trust your managers and team members, talk with them about your plans to quit. Gauge how long they will need to replace you or train your replacement, and factor that into your timeline. Generally, however, a two-week notice is acceptable.
Start Planning Your First Three Months Immediately
You’ll need to be sure to have at least three months of income set aside before taking the plunge. Not only will you want to plan financially for this big transition, but you’ll also want to plan your time wisely. Many people might leave a full-time job and want to take a vacation before jumping into the role of entrepreneur. This might be feasible with your current finances. Just be sure to structure your days like workdays, not vacation days.
Network With Peers and Mentors
It’s never too late to find a mentor. Do you admire a local entrepreneur or small business owner? Set a date to contact that person and start developing a relationship. Many seasoned professionals find gratification in mentoring newer entrepreneurs. Tap into your network of peers on LinkedIn or via your local Chamber of Commerce to seek their advice and support during these exciting and challenging months ahead.
Set Your Goals
Make sure you have two separate lists of goals for your business, including long-term goals and short-term goals. Keep these lists short and attainable, although a few pie-in-the-sky goals can help keep you motivated and dreaming big. Consider your goals every step of the way as you make the transition from a side hustler to a full-time business owner.
Ready to start the process of turning your side hustle into your full-time job? Rid yourself of doubt and don't be afraid to go for your dreams. Incfile's Gold Formation Package will take care of many of the steps above, including registering your LLC and offering tax consultations, all for a one-time $199 fee.
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Nicole Bowman is a freelance writer who thinks turning research into stories is the best gig ever. She started writing billboards back in 2002, worked in book publishing in New York for many years and now she creates all sorts of engaging content for the web. Nicole lives in Rehoboth Beach, DE, with her husband, two sons and their poodle, Tootsie. She loves the great outdoors, bookstores and tennis.