I’m often asked: how do you know when it’s time to transition your side business into a full-time career? So many would-be entrepreneurs start with a small project that develops into a part-time source of income. At first it’s nothing but a blessing, but soon enough they find themselves torn. The security and reliability of their regular career can’t be easily dismissed, but neither can the freedom and possibilities of self-employment.
As they say, the greater the risk, the greater the reward. It can be incredibly frightening to finally make your big move, mostly for financial reasons. Some entrepreneurs tell themselves that once they’re making a certain amount of money on the side, they will then be comfortable enough to take the leap. The idea is a gradual transition from moonlighting to full-timing, leaving the one behind only when they’re in a financial position to do the other.
In my experience, however, this approach is unrealistic. While every situation is unique, and there are exceptions to every trend, I could never in good conscience advise taking the “wait and see” approach. This isn’t meant to be discouraging- far from it. I simply have to acknowledge the near-impossibility of building a full-time business on a part-time schedule. If you want to make your side project your career, you’re going to have to do exactly that: make it happen.
The only sure way to leave a standard job or career behind is to commit completely. Generally it’s incredibly difficult to make enough money on the side to replace the wages of a full-time job (or to even come close). I can say that I personally have never met anyone who has managed to make the transition this way. The reason for this? Almost without exception, only full-time commitments can generate full-time income. There’s simply almost no way to build a real business in 2, 5, or even 10 hours a week.
The Psychological Barrier
Leaving a steady paycheck behind is a terrifying prospect. That’s not an exaggeration. With a still-recovering economy and the cost of living on the rise, giving up a guaranteed income is no joke. But it’s not just the financial risk that makes transitioning to self-employment so daunting. The lifestyle of an entrepreneur includes challenges that the normally employed will never face.
First, there’s the stress factor. It’s one thing to stress over projects or workloads when the bottom line isn’t your problem. It’s quite another to know that every bit of work you do can significantly affect how much you’ll make in a week, month, or year. An entrepreneur never clocks in or out; it’s a 24/7, 365 approach to making a living. If you’re not mentally and emotionally ready for that, it’s not time to make the change. There’s also the time factor. Family and friends will have to cope with your ever-present responsibilities, and relationships can be tested.
There’s also the uncertainty. You can calculate what you hope to make from your independent business, and you should set financial goals. If your part-time effort has been netting you $1k per month at 10 hours per week, you can estimate that 40 hours a week will net you $4k per month- but that doesn’t mean it will. So many more factors (and expenses) go into orchestrating a full-time effort that the numbers can change exponentially, whether in your favor or against it. That’s why it’s called “taking a leap.” Guarantees are a rare thing in business.
Getting “Ready”
With all the challenges in store for a full-time entrepreneur, how can anyone be comfortable taking the necessary risks and making that final move? The answer is that you can’t!
Growing, challenging yourself, and taking risks is supposed to be uncomfortable. That’s why they call it leaving your “comfort zone.” Discomfort is the surest sign that you’re really venturing out among life’s possibilities. The honest truth is that you’ll probably never feel completely “ready” to make your move- I certainly wasn’t. Giving up a reliable stream of income in the field of education was not an easy decision for me. It worked out, and I frankly wish I’d done it sooner, but I couldn’t have known that at the time. I had to accept what every independent business person has to accept: the possibility of failure.
That’s why it’s so important to prepare. Just because you can’t predict (or control) the future doesn’t mean that you can’t affect your own odds. Planning is an essential part of making the transition, both to increase your chances of success, and to make the move itself less stressful. By putting careful preparations in place, you can make the transition smoother, and take that risk armed with the knowledge that you’re meeting the challenge with your best effort.
The first step is to set a deadline. It’s very important to have a set date by which you plan to switch careers. Setting deadlines and sticking to them (even if everything doesn’t fall into place exactly as planned) is a skill every entrepreneur needs, so it’s fitting to make this your first big decision. Decide exactly when you’ll be leaving your job, whether you feel ready or not. This will serve as your greatest motivator: a firm, tangible goal that isn’t conditional.
If you can, build up savings before the transition, in order to cushion yourself through the first few weeks. If your job allows it, see if you can use unused vacation time, tacking it on to the end of your tenure so that you’re still drawing a paycheck after you’ve moved on. Marshall your resources, set your plan, and prepare for liftoff.
Having Faith
For all the risks involved in moving to full-time self-employment, it’s important to trust in the factors that increase your odds of success. Maybe your side project is relevant to the career you already have (as in my case, transitioning from general education to business education). Maybe you’ve just been following your passion on the side for so long that it’s second nature to you. Maybe you have a killer product that needs only a full-time marketing effort to unleash its potential. Whatever your reasons for believing are, let them be your rock.
It’s possible to be realistic and optimistic at the same time. Track your progress down to the cent. Do the math, crunch the numbers, and take heart in every victory, even the small ones. Confront the reality of what you’re doing, and believe that you can handle it. At the end of the day, no one knows what you’re capable of better than you do.
Expect it to be emotional. Business often is. Striking out on your own can build character and emotional intelligence in ways that drawing a steady paycheck can’t. In that sense, risk can be its own reward. Keep the faith, and bear in mind always that not taking a chance poses its own risk: the risk of spending the rest of your life wondering “what if?”