If you are like me you started your side hustle to make more money to pay those bills and then you realized that actually, you can turn this into a full-time income.
Today, I am going to share with you the 5 steps you need to turn your side hustle into a full-time business.
Step 1: Separate your business finances from personal finances
For me this is the huge first step I took, you know if you still have a job and make money from the side hustle it is very easy to mix and match your finances.
You need to have a debit card ( or credit card) that is only for your side hustle, if you need to buy something use that, if you receive payment, deposit in that.
This will help you to track how much actually do you make, how much do you spend and what is your net profit, it will help you to know if your side hustle brings in enough income to sustain your lifestyle.
Step 2: Start bookkeeping
This is when things start to get serious, you need to track your income, your expenses, and your profit, this will help you with taxes ( talk about this later) and also know how are you doing financially.
If you are not making many sales you can just write it down on a booklet or on a piece of paper, then you can take it to the next level by putting them in excel, or you can use software like Quickbooks to track your money.
If your business is really getting big, I will advise is hiring an accountant, you need to have someone who knows what they are doing when it comes to bookkeeping.
Step 3: Formalize your business plan
You need to have a plan around your business, first, you need to know how much money you need, this includes your total expenses and the savings you want to make, from that find out how many customers you need to reach that amount of money.
For example, if your total expenses are $10,000, and your products sell at $100, you need just 100 customers, so your plan is to get at least 100 customers per month.
In most countries, businesses pay tax if that is the case you need to set some money for tax, just find out what is percentage of your income you need to pay for tax, and set that apart.
For example, I live in Mexico, the Value Added Tax here is 16%, so what I do is that every time I get paid, I set apart 16% of that income for tax.
Neglecting tax can put you in a hot spot, just do it, I have seen business owners get into real problems for not paying taxes.
Of course, you can speak with your accountant( that is why I recommend hiring one when your income increases) and they can give you tips about how to legally lower your income, rich people pay less tax than poor people and you can do it too.
Step 4:Prepare your personal finances
Before jumping to full-time entrepreneur you need to prepare your personal finances, by personal finances I mean that save some emergence fund ( in case something goes wrong you need to have some cash you can use until you get back to your feet), you need to pay your personal debt if you have one.
When you have a job most companies will provide you with health insurance, now if you leave your job you will lose that too, you need to start shopping and finding out what insurances they offer in your area.
Step 5: Jump in
In the first 4 steps, I explained things that you need to do in order to turn your side hustle into a full-time business. To be honest with you, probably you will not get are the conditions in the right order.
My recommendation is to jump in, quit that job, and go full time, do not do this to impress someone or because you feel it is cool to own a business ( it is but you know what I mean), jump in when your intuition tells you to jump in, do not wait for it to be perfect.
That is it, those are the five steps to turn your side hustle into a full-time business, in which steps are you in currently? Let me know in the comment section below.
Thank you for reading.