Entrepreneurship is certainly on the minds of a lot of people these days: According to Statistics Canada, about 2.9 million Canadians identified as self-employed in 2018, and 48% of those becoming self-employed already have paying jobs.
If you're one of the many people running a business on the side, you may be wondering how you’ll know the right time to take things to the next level.
Some of this will depend on your own circumstances and comfort with risk, but if you’re doing well and you feel like you’re in the zone, here are five signs that your side gig might be ready for prime time.
1. You see an increase in demand
So your sideline is attracting more and more interest. Congratulations! This is usually one of the first indications that you may be onto something viable that can sustain your lifestyle.
If more clients are coming to you for your product or service, or you’re finding new and different revenue channels, you’re probably providing something that’s really valuable. Talk to some of your clients about their anticipated needs to get a sense of whether the demand is long-term, seasonal or short-term.
2. Your side job is starting to pay almost as much as your full-time job
If the income from your side gig is close to matching or exceeding the salary from your full-time job, that is, of course, a pretty positive sign. If you see potential for ongoing growth, that’s even better.
More important: What you’re really looking for is consistent performance. While it’s great to see your side gig bring in substantial income from time to time, you want to ensure that it can reliably sustain you over the long term.
What to ask before you flip your side job to full time:
- Do you have a regular roster of clients who currently provide a steady income stream?
- Could you potentially bring in more revenue if you were able to focus on the business full time?
- Is there enough cash in your emergency fund to cover a minimum of three to six months’ worth of household and business expenses? (Read more: How to build your emergency fund)
These are important questions to answer before you quit your day job and focus on growing your business. If you have enough cash saved to cover your needs while your business expands, and if there is enough interest to capture more revenue consistently, it’s worth considering moving from part-time to full-time.
3. You’re missing out on new work
If your current job is limiting your ability to accept new work for your side gig, it may be time to evaluate just how much potential business is out there for you.
To help put things in perspective, estimate how much business you turn away and compare it to your full-time job. Now may be the time to make the switch if the numbers are about equal, or your part-time business could bring in even more income.
4. Your side hustle needs more staff
Most side hustles begin as solo efforts. If you find yourself farming out work because you’re booked solid or reaching out to your financial team more frequently with business-related questions, it’s probably a signal to revisit the scope of your gig. Your side hustle may have quietly become your primary work without your realizing it.
5. You prefer your side gig to your full-time job
If your part-time passion has captured your imagination in a way your regular gig never quite could, an upgrade to a full-time business may be in order. If that’s the case, leverage the passion you used to get this far to help you create an engaging and potent business plan for transitioning from your current full-time job to helming your own business.
- Calculating how much money you’ll need to save to cover the next three to six months of household and business expenses.
- Find out if you’re falling short, breaking even or coming out ahead with this Budget calculator.
- Drawing up an earnings timeline
- Finding out how much notice you’ll need to give at your full-time job
- Developing a team to support your growing business
- Deciding whether you need to get a business number to file taxes, remit GST/PST/HST, and claim expenses. Note: If you make more than $30,000 in 12 months, you are required to have a business number and collect and remit GST/PST/HST.
- Setting up separate business accounts for banking, credit, etc.
- Determining what kinds of insurance coverage you need – including critical illness, disability and liability
When done right, turning your side hustle into a full-time job can be an amazing way to more fully align your passions with your day-to-day life. Enjoy the process of discovering what’s right for you – and the freedom of choosing whether to make your passion your livelihood. After you’ve answered all those questions and laid the foundation for your decision, you’ll be ready to make your move.
More to think about when launching your business:
- Life moments: Managing your career – Working for yourself
- Leaving your job: Don’t lose your health insurance
- Leaving your workplace pension and savings plan
- Small business benefits and savings