When I started my freelance writing business over a decade ago, I was methodical. I faithfully worked side jobs for years while paying off my student loans and other expenses. I arose at 5 a.m. to finish content on time and worked late into the night, curled up with a cup of coffee. It was fun, thrilling, and absolutely exhausting.
Now I’ll let you in on a little secret … I waited way too long to figure out how to turn a side hustle into a business.
In reality, I could have transitioned to a full-time business much earlier than nine years into my side hustle. But I was cautious and didn’t know when the time was right. I was afraid of failing and putting myself in a position where I was unable to pay my bills. I made decisions based on fear, not on reality.
When I finally transitioned to full-time client work, I was blown away. There was a much greater need for my copywriting services than I ever realized, and I was fully booked within just a few months. For the next couple of years, my greatest challenge was juggling a growing workload and starting a family — what a wonderful problem to have!
Now my experience may not be the same for everyone, but if you’re reading this article, you’re likely somewhere on the road toward starting a small business. Perhaps you’re envisioning what it might be like to start a venture, or wondering how to turn your hobby into a business. Maybe you’re already burning the candle at both ends, trying to manage side work and a full-time career. No matter where you are on this journey, I have tips to help turn your side hustle into a thriving small business.
If you’re not sure where to get started, here are a few gigs you can start outside your regular work hours:
These just scratch the surface. The truth is, you can take many different hobbies and skills, and grow them into full-time businesses. Perhaps you’re able to restore and refinish furniture. Maybe you’re an excellent seamstress and have an interest in fitting bridal gowns. Love party planning? Perhaps you’d like to try your hand at organizing corporate events and weddings. I could go on and on. The first step is to find your passion, work at it, and then know when the time is right to go “all-in.”
So when is it the right time? Great question. Let’s cover that next!
There’s no one-size-fits-all formula to quitting your day job, but there are a few guidelines. Here’s a checklist to consider following before you write your resignation letter at your current job.
There’s no hard-and-fast rule to how much you should earn from your side hustle before quitting your day job. It depends on your monthly expenses (don’t forget about buying health insurance), your rent or mortgage, if you have a family to support, and your monthly expenses. For example, you might just need to earn half of what you normally make.
Here's what helped me: I created a budget and cut back in every area possible. Goodbye TV subscriptions, shopping trips, and date nights. Then I added up every extra business expense. Fortunately, for a freelance writing venture, I only needed a computer, minimal software, business insurance, and an accountant.
Next, I factored in how much I needed to earn to cover all of my personal and professional expenses. Plus, I added more income to cover quarterly income taxes and health insurance. When you’re a self-employed individual, remember that you’ll need to pay for your own health plan, Solo 401(k) or SEP IRA, and a good chunk of taxes too.
In the end, I found a number that felt right — it was within reach and covered just enough for me to live comfortably. Then I did everything in my power to line up clients so I could hit my target income.
Not every hobby or talent allows you to earn a living. For example, let’s say you’re fantastic at shaping surfboards, but you live in the Midwest. It might be tough to launch a full-time surfboard-shaping business unless you move to a coast.
However, if there’s a robust market for your product or service, you’re headed in the right direction. When you still have your full-time job, test out the market. See if you can line up customers and do the work on weekends, or in the evening. This is also a good time to test out pricing through trial and error. It’s a good sign if people are willing to pay for your hard work at a price that will sustain your business and costs of living over time.
Remember, you don’t need to hash out every detail to get started. Just make sure you can attract a steady stream of customers in your area, and you target a price that works for you and your business.
If you'd like some help with your business plan, here's a free template and guide.
When it was time for me to quit my day job, I had been overwhelmed for a long time. I was working early morning hours before commuting to work and late into the night. I spent many Saturdays cranking out content to meet Monday morning deadlines. Fortunately, this was before I was married and had kids, so I compromised less of my personal life.
Finally, I couldn’t take it anymore. It was too stressful to work full-time, have a business on the side, and start a family of my own.
I took the leap to start my business and never looked back. In the end, owning my own freelance writing business became one of the best personal and professional decisions of my life.
While this worked for me, it may not be the best solution for everyone. If you’re burning the candle at both ends, perhaps it’s time to cut back on your side hustle rather than quit your full-time job.
Rule of thumb: You should always have an emergency fund, even if you work full-time for a company. An emergency fund can help cover your expenses if you get laid off, have an unexpected medical event, or experience another life crisis.
In general, you need three to six months of expenses saved in an emergency fund. Before you quit your day job, even if you’re booked with side work, make sure you’ve saved a healthy amount just in case your business doesn’t take off at the start. .
Here’s one you can’t measure — your passion for your side hustle. But it goes without saying, you need to be enthusiastic about starting a small business. Otherwise you won’t have the drive to keep going and overcome any obstacles ahead.
If your side gig is driving for Uber or delivering groceries, and your goal is just to earn extra cash, reconsider going full-time. Only quit your day job if you’re passionate about your work, ready for a lifestyle change, and want to identify as a small business owner. Your own business should be treated like a child — with care, dedication, patience, and time. Be ready to put your 100% into your passion.
Remember, turning your hobby or side hustle into a small business is a big deal. It can open you up to financial risks you never thought were possible. That’s why it’s so important to consider purchasing business insurance at the get-go, even when your business is just a side hustle. Business insurance can protect you from costly lawsuits and medical bills involving customers, employees, vendors, and more.
Simply Business makes it easy to find, buy, and understand general liability, professional liability, and workers’ compensation insurance. Go to our easy online quote tool to find out how much a business policy might cost you. If you receive multiple quotes, you can compare and find a policy that works for your budget and business needs. Remember, accidents and lawsuits can happen at any point.
If you have questions about how any of our policies work, talk to one of our licensed insurance agents by calling 844-654-7272. We’re here to help you protect your business, whether it’s still a side gig or you’re ready to go all-in.
Going all-in on your business isn’t for the faint of heart, but trust me, taking the leap can pay off. If you find yourself asking, “What if?” it may be time to transition. After all, you don’t want to look back one day and wonder what could have happened if you hadn’t seriously considered taking the risk. If you’ve done the planning and considered your options, and your gut says the time is right, go all-in.
I earned a B.A. in Journalism from the University of Wisconsin at Madison (go Bucky). After realizing my first job might involve carrying a police scanner at 2 am in pursuit of “newsworthy” crimes, I decided I was better suited for freelance blogging and marketing writing. Since 2010, I’ve owned my freelance writing business, EST Creative. When I’m not penning, doodling ideas, or chatting with clients, you’ll find me hiking with my husband, baby boy, and 2 mischievous mutts.
Emily writes on a number of topics such as entrepreneurship, small business networking, and budgeting.
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