Should you make your side hustle your main business?
Is this the decade of the side hustle? It seems everyone has a passion project they’re nurturing while their regular job pays the bills. Whether it’s because the nature of work is shifting or entrepreneurialism is finally having its day, a side hustle is far from an unusual pastime. I know I’m not alone in saying that I think I’ve had side hustles for longer than I’ve had a full-time job.
Whether you’re an established business owner or an entrepreneur in the making, a side hustle is a good way to test a business idea. But what happens when your side hustle grows up? In my experience, side hustles can definitely become your main business, though there are a few questions you should ask before you go all-in.
What resources do I have to make this work?
Often, you’ll find a side hustle grows to the capacity that you allow it to, like a plant that will only grow to the limits of the size of the pot you plant it in. If you’re working a full-time job and only have evenings and weekends to work on your passion project, then there’s a chance that if you invested more time, money and effort, you could grow it into your core business.
This can be a deceptive way to assess its potential, though, because it’s not always the case that if you give it more space (and resources) it will flourish. Sometimes a side hustle is more successful if it is kept small and profitable, giving you a ‘nice-to-have’ stream of pocket money, rather than becoming a bigger venture that you need to turn into an income source.
The biggest mistake I’ve seen people make is when they drop all their other work responsibilities at the first sign of success to focus on the side hustle, only for the side hustle to fall over. While it’s great to commit time and effort, sometimes you’re just bringing your point of failure forward in time. When Tim Molloy and I first quit our jobs our side hustle definitely did not cover our corporate salary but it definitely was at the point where it literally put food on the table and covered basic living expenses. This gave us a lot of confidence to take the leap.
This is where an understanding of scaling comes into play. Take stock of how you’re currently running things in terms of time, money and your skills and processes and then do some modelling. If you dropped from full-time work to part-time work you might have more time to devote but may not have the same financial resources, for example. Or you may see that the skills you have to grow your side hustle are beyond your current capacity and you may need to hire someone to fill what you lack or find a business partner to help.
Personally, I’d err on the side of grinding it out at two jobs for a while and taking your time to launch the side hustle properly. In my experience this has a higher success rate than jumping into the deep end and is a lot less stressful. When we had hit a certain point I recounted to my business partner the story of the Spanish general who commanded his troops to burn the ships when they landed on enemy shores. That way they knew they had to fight to win or die. The way I said it to Tim at the time is, this will always be a nice side hustle until we are forced to make it a full time position. The next day he resigned and I duly followed.
What do I have to do to make it sustainable?
The other question you need to consider is whether the current momentum experienced by your side hustle is reliable, or whether it is riding a trend or wave that has an end point, which will mean it might not be sustainable. If you’ve only experienced one great season, for example selling homemade puddings at Christmas, how do you know how to pace the rest of the year out? In one of my first ventures, a tie business we were ecstatic over sales figures over the Spring racing period then backed up by Christmas. By February, after sales and festive season were over, we saw a dramatic drop for the next 8 months but saw enough to see it was feasible.
Traits like agility and being able to pivot will come in handy to ride out the lows, but it’s a difficult question to answer without some experience with business or in the industry. I would recommend keeping the side hustle to the side as long as you can to gain more experience and get a better feel for the peaks and troughs of the business.
Here’s where deep knowledge of your industry and market will help you determine whether you’re benefiting from a fad or you’re onto something big. An opportunities and threats analysis will also give you insight into how your gig might travel into the future.
What will it take to lose my passion for this?
This last question is designed to make you think about your relationship to your side hustle. Do you only like it when the going is good? Or are you prepared to stick with it through thick and thin? When you have a main business or job, a side hustle can be like a holiday where the novelty helps you change your headspace and grow something new; if your side hustle became your main business, could you still muster the same level of enthusiasm for it?
A lot of this comes down to your personality and how demanding your side hustle is, so choose your course wisely. Can a side hustle ever become your main business? Absolutely. But make sure you’re ready to commit.
Jeremy Chen is the co-founder and managing director of Good Things, a branded merchandise agency founded in 2012, which has grown 30% YoY since 2015 and turns over AUD $10 million per annum. www.GoodThings.com.au