We all have passions. According to one 2017 survey, almost half of all millennials are working on some type of side hustle. Others simply have passion projects they pursue in their spare time. But when do you know whether that passion should actually become your main job?
It’s a seemingly simple question with a considerably more complex answer. Sometimes, side hustles are just that. A passion project is great while it lasts, but will probably not sustain you financially long-term. At the same time, there are specific signs you can look for to maximize an opportunity to build your own business when you see it.
Every situation is unique. Just spotting one of these signs is not enough, and in some cases, even all of them don’t guarantee success. Still, they give you a better idea of what to look for as you turn your side hustle into a full-time or part-time business.
1) Your Personal Interest Only Keeps Growing
A passion project gets its name for a reason. Even a side hustle is probably somewhat connected to your interests. Typically, that’s not enough. When you go into any business full-time or even part-time, you will need to grind. You have to be passionate enough about the topic to keep going, even amidst challenges and adversity.
One tell-tale sign: look for the moments at which you want to keep going. The nights when you’re working your hustle, and want to get just a little further or do just a little more before you call it a night. If the additional invested time only keeps your interest growing instead of diminishing it, you might be ready to turn it into a business.
2) Your Finances Are Ready for the Shift
The financial aspect is probably the most difficult part of starting a business. Passion will only get you so far; without the finances in place, your business will have a small chance of success.
You likely won’t be successful initially, which means you need to have at least some savings built-up in preparation of the initial slow phases. If the investment in the business itself is significant, it helps to have investors lined up. And even if it isn’t, a good line of credit can be invaluable to prepare for those initial cold spells.
How much exactly you need depends on the business you’re trying to build. If possible, try to start with at least four months’ worth of savings, plus any money you need for the initial build-up like a website or starting supplies.
3) You Have an Understanding of the Industry
When working on a project or side hustle, you don’t need to know much about the surrounding environment. You just have a couple of tasks to get done, working to the best of your ability. However, everything changes once that side hustle turns into a business.
Now, you need to know the industry. Without that knowledge, it will be impossible to build on trends, reach new clients, and continually differentiate yourself against your competition. Look for signs that you’re ahead of the game in that area, such as accurately guessing trends before they become common knowledge, knowing the big (and small) players in the competition, etc.
4) You Know How to Reach Potential Clients
A side hustle is sustainable through a single or a couple of clients. Your business won’t be. In fact, experts estimate that startups should spend between 20% and 25% of their time just looking for and marketing new clients. If you’re not prepared to spend a quarter of your time on this crucial task, you might not be ready yet.
Look for signs related to marketing. You don’t have to be a marketing expert, but you should have a good idea of how exactly you can reach new clients in your industry. It might be through personal connections, or you might just know the channels (publications and websites) your target audience tends to frequent. This initial knowledge will be crucial as you begin to build out a more specific marketing plan.
5) You’re Not Afraid to Go Outside Your Comfort Zone
This one is a bit more of a personality question. A side hustle is easily accomplished within your everyday life. A business of your own, whether it’s full-time or part-time, will shift your entire life around. Entrepreneurs tend to share a few core personality traits, among them flexibility and a tolerance for ambiguity. The same will be true for you: if you want to start a business, you have to be willing to go outside your comfort zone.
That doesn’t necessarily mean being an extrovert. It does mean preparing for an uncertain future, with plenty of contingencies in place. You might find yourself making these contingency plans for your passion project, or planning through hypotheticals. When that happens, take it as a sign that you’re ready to expand on that project.
6) You Have Room to Grow
Finally, don’t underestimate the importance of knowing whether or not you can actually expand on your side hustle. The work you do might be fulfilling, but simply not lead to much more. In other words, it might be an end itself. Only look towards taking the next step if the thing you’re working on actually allows for that room to grow.
One tell-tale sign: you’re not able to take all of the projects that come your way. If you consistently have to turn down work, it might be time to build a business. Generally speaking, when you feel like you’re only scratching the surface of possibilities, it makes sense to look into the potential for a start-up.
Making the Transition from Side Hustle to Business
All of these signs are important pointers towards whether or not you should actually start a business. Still, the process is complex. From the initial investment to the build-up of a supply chain, you’ll need to work through plenty of variables.
None of that work makes sense, of course, if you can’t make the decision of whether your side hustle is worth turning into a business. Use these six signs as your core deciding factors, then make a decision that makes sense for you and your financial future.
