When Can Your Side Job Become THE Job?

By Jacquette Timmons

If you have a side-business, it is probably your intention that someday it will no longer be a “side” gig. I suspect your dream is that one day you’ll be able to dedicate 100% of your time and resources to it and let go of your “day job.”

But how do you know when you are really ready to make that transition? What do you use to gauge if now is the right time to say good-bye to your “9-5” and let go of the (relatively) guaranteed bi-weekly check you have currently?

When I started my business in 1995, I didn’t start it as a side gig; although, there were times when I wish I had! The reasons for my occasional woe is me in the form of, “If I could do this over, I would…” represent the three factors you need to consider when deciding the best time to leave your primary job.

These factors are relevant regardless of your business (product, service, combo) and in almost equal measure determine your business’ success or failure: financial resources, support system and time.

Financial Resources

It’s common wisdom to save 6-12 months of living expenses for an unexpected, rainy day. To this number, I would add 6-12 months of business expenses. This approach assumes you aren’t commingling personal/business resources by depositing business receipts into your personal account. If you are, now is an ideal time to create a separate identity – legally and financially – for your business.

I’d also presume that some of your account receivables will be outstanding for sixty- to ninety days, regardless of your payment terms. This strategy will help you manage cash-flow if you have to “float” your business expenses using personal resources (cash or credit card). (I once waited six months for a check from a client!)

Remember, when you are working THE job, cash-flow takes on an importance it may not have had when you were also working the day-gig. Cash-flow can truly become more important than making a profit sometimes!

Support System

You’ll need a support system in two ways: emotional and infrastructure. Because you’ve been “doing” your side-job for awhile, you probably have most if not all the things you need, i.e., smartphone, laptop, printer/scanner, files/filing system. But as you imagine working from home full time or renting office space, how might your infrastructure needs change? Once you identify any gaps between what is and what will be, what is the cost of closing the gaps? (Be sure to add this number to your financial needs/resources above.)

I cannot emphasize enough the importance of a really good emotional support system…of a certain kind. If you currently spend most of your time with family and friends who work a traditional 9-5 job, make a commitment to surround thee (and quickly) with other entrepreneurs. Seriously. No matter how well intentioned your 9-5 crowd is, there are elements of running your own business that they will never understand (unless they at one time were also an entrepreneur). You’ll save yourself a lot of frustration by being in the company of, supported by, encouraged by, and challenged by fellow entrepreneurs who “get it.

Time

When you leave your day-gig to focus full-time on THE job, you get more time and lose it, simultaneously. Here’s why: i) When you are juggling both jobs, you are probably much more disciplined and protective about your calendar. As a result, you are probably extremely focused and productive. ii) However, when you are able to dedicate 100% of your time to THE job you at first feel like you have a ton of “free” time. For some, this time freedom renders them paralyzed with indecision about what to do and when and often comes with guilt about how you are using said time.

So before you leave your 9-5, get clear about how your choices with regards to time will change and begin to adjust your habits and patterns accordingly. In this way, the transition from “I only have two hours to get this done,” to “I have all day to finish this,” won’t feel so drastic.

Now, let me tell you a sobering reality about all that I’ve just shared: When it comes to financial resources, support system and time, you’ll actually probably under-estimate what and how much you really need because it always takes more than you forecasted!!! I’ve yet to meet an entrepreneur to say otherwise and I can attest to this personally.

However, don’t let this dissuade you. Instead, allow it to help you temper your expectations and to prepare as best you can. And, good luck!