Making the decision to turn a side hustle into a full-time job is massive—for the business, yes, but also personally. So how do you know when it's time?
I made this decision in 2020, leaving a startup I'd spent four years building to pursue my side hustle, career-support tool Lloyd, full-time. I didn't take the decision lightly.
1 in 3 Americans have a side hustle—and that number could significantly increase by the end of 2021. Take a look at Zapier's snapshot of Americans' side hustles.
What to consider when making the jump from side hustle to full-time
Especially if you like your full-time job, deciding to jump ship to pursue your side hustle can be an anxiety-inducing experience. To give myself some structure in making the decision, I narrowed it down to five broad inputs that I needed to consider.
1. Sustainable business. I asked myself: is this side hustle capable of becoming a sustainable business? Have I built more than a back-of-the-envelope model to show how the business could thrive and grow? Having an idea is much different than having proof of concept. You need to have been working with your side hustle long enough to feel confident that your business model makes sense. If you're leaving a salary and benefits behind, it can't be a trust fall.
2. External validation. I felt confident that my side hustle was sustainable, but what about not me? I made sure to find at least 10 people with knowledge of the sector and asked for their feedback. Did they think it was sustainable? Were there any red flags I was missing? Was anyone super skeptical? (If you don't run into any skeptics, keep searching—you want to find folks that are skeptical so your idea gets pushed and evolves. You don't want confirmation bias keeping you on the wrong track.)
3. Personal finance. This is a big one. Even if your side hustle is the next Facebook (spoiler alert: it's almost definitely not), you still need to be able to survive while you're building it. There are a lot of questions to ask here: Are you comfortable without a salary for at least six months? Maybe more? How about health insurance? When you're not on an employer's plan, it's seriously expensive. And how about the opportunity costs like growing a 401k? Be sure to think beyond salary to understand how leaving your full-time job will affect your finances.
4. Interest level. In theory, if you have a side hustle, it's because it's something you love. But enjoying something right now is very different than being dedicated to it for the next however many years. You can't build a business in a day, so this is a long-haul adventure. Be sure it's not something you'll get sick of in a few months after the novelty has worn off.
5. Life. Yep, life. As it turns out, money and interest-level aren't the only two things dictating your enjoyment of—and ability to succeed at—starting a business. You need to ask yourself: Is this the right time in your personal life to dive into an all-consuming new venture? If you have kids, will you be able to balance that with the new business? If you have a partner, are they supportive of the plan? Do you have other personal commitments that might clash with this new venture?
You probably noticed that only two of the five inputs have to do with the side hustle itself. And as I look back on the decision I made about six months ago to turn my side hustle into a full-time role, that tracks. The change in your professional life is nothing compared to how a new business affects your personal life. We're talking about work hours potentially straining relationships, revenue issues potentially straining your personal finances—the list goes on. Being committed—and understanding the risks—is crucial.
How to quantify your decisions
It's one thing to consider all these questions, but how do you then turn that into a decision? I decided to break it down into a scoring system. An obvious caveat: this isn't the be-all-end-all rubric. Every person will weigh each input differently, and you shouldn't make a life-altering decision based on a stranger's purple score sheet, but hopefully this can help get you started.
Here's how it works. For each of the five categories, you can apply a score of 1 through 5. A 1 generally means you're wary about readiness in that category, and a 5 means you're extremely confident.
While there isn't an exact cut-off score in either direction, the point of this exercise is to acknowledge that there should be a high bar when leaving a full-time job for a new venture.
What's considered high? I generally put it at 22 or higher (out of 25). Again, that's a directional measure—this isn't a science. But a score of 22 or higher means you didn't have a 1 in any category, and if you had a 2 in any category, the rest were 5's. So pretty high across the board.
But of course, there's nuance. If you have a 2 on personal finance and a 5 on everything else, you need to think twice. If you can't afford rent and food for six months, you almost certainly won't be able to build a business.
Creating a timeline to hold yourself accountable
Let's say you scored 25 on the chart above, have carefully considered the decision, and are ready to take the plunge to leave your current job and dive full-time into your side hustle.
Hold on a second, and do yourself a favor: create a timeline for yourself with benchmarks that you want to hit.
You aren't going to have a boss (or even coworkers!) to keep you on task. So before you start (and by that, I mean before you quit your full-time job), create those benchmarks. What needs to happen at the end of each month, for the first three months, in order for you to keep going?
I'd encourage you to make these quantifiable goals, so that you can measure your progress objectively. It could be number of signups, revenue, product usage, or any other metric that matters to your business. If you're starting the business alone, it can be helpful to invite a partner or friend to be part of your monthly review, just to offer an extra layer of accountability. (You want to avoid the "eh, close enough!" trap.)
For even more confidence, go back to that chart, and make sure that your scores are either steady or increasing month by month. The business isn't the only thing that needs to be on track—be sure you're still feeling good about your financial situation, your interest level, and your personal life.
Other things to consider
This kind of life-changing decision shouldn't be boiled down to one chart, of course. There are plenty of other things to consider. The list is long, but here are a few considerations you should keep top of mind as you think about taking the plunge.
Pivoting the business
As many entrepreneurs have learned, the initial concept you start with is often not what your business turns into. Flickr started as a video game. Shopify started as a snowboard equipment store. The list goes on. And especially during the pandemic, businesses have had to pivot out of pure—and urgent—necessity. Take Museum Hack, which pivoted from an in-person tour business to a remote team-building company in a matter of weeks.
The short of it: you need to be flexible. If your side hustle is more about passion for what you're selling or offering and less about the passion for starting a business, you need to think hard about that. Because it's possible that your baby will grow up to be different than you imagined.
Going back to a "regular" job
Most businesses fail. And that means it's possible—even likely—that you'll need to go back to another full-time job in six months. So: are you confident you can land a job again if the side hustle doesn't work out? For example, are you leaving your employer on good terms? Could you maybe even go back if the business doesn't take off? If not, do you have solid recommendations and a strong application to get you back in the game?
While it can be disillusioning to think about your business not taking off, it's important to be prepared for that just in case.
Having the tools you need
Zapier recently commissioned a survey, asking people about what holds them back from turning their business ideas into actual businesses. They found that 61% of Americans have had an idea for starting a business, and 24% have had more than one. But an overwhelming majority of those people—92%—weren't able to turn their idea into reality.
There were a lot of reasons for this, but one of the main ones was access to and knowledge about business tools. Nearly half of would-be entrepreneurs (47%) said they'd be more likely to start a business in 2021 if they had better access to business tools. And a similar number (46%) said they'd be more likely to do so if they better understood how to work with the tools needed to run a business.
This survey was conducted online within the United States by The Harris Poll on behalf of Zapier between December 21-23, 2020 among 2,001 U.S. adults ages 18 and older, among whom 1,228 have had an idea for starting a business.
This is key: the tools businesses use can make or break them. We built Lloyd with a tech stack of $100/month, and we wouldn't have been able to do most of it if we didn't have access to or knowledge of those tools. So be sure you understand the tools you'll need—and how to make the most of them.
Zapier lets you automatically send information from one app to another, helping you reduce manual tasks. Learn more about how Zapier works.
Launching your own business can be draining—physically, mentally, and financially. Diving head-on into your side hustle is as much a personal decision as it is a professional one, and I'm more than happy to chat with anyone thinking about doing it. You can email me at email@example.com, or check out Lloyd if you want to bring more structure and accountability to your career.