How to Financially Plan to Take A Side Hustle Full-Time

Taking your side hustle full-time is a dream for many, but getting there can be a challenge.  It took me three years to take Girl Meets Party full-time, and I planned diligently to get there.  In building a business, there are plenty of sacrifices.  There are two main sacrifices – time or money.  It’s been quoted by so many, including Inc., that the average overnight success takes 10 years.  So, how do you get there while enjoying life?

Be clear on your expenses

Know your numbers.  How much do you currently spend and how much do you actually need to live?  A traditional approach is to live off 1/3 of your income, spend 1/3 of your income and save 1/3 of your income. I’ve always approached my total income as my net income (aka what I take home from my paycheck) vs. gross income (which does not include taxes and health insurance).

Then, be realistic about your expenses.  What can you live without?  Do you buy your coffee every day?  The cost of a $4 latte adds up quickly. Set a budget and be realistic about it.  Be diligent and plan for unknown expenses, too.

Run your side hustle like a business

Start a separate bank account for your side hustle if you haven’t already.  Keeping personal funds separate from your side hustle is a great accounting practice to create a solid foundation for your business.  If you constantly funnel cash to your side hustle, that’s a hobby.  However, if you set the money you need in an account or plan for the dollars you will add to it throughout the year, that’s an early business.  Treat your side hustle seriously and it will flourish into a business.

Save for the future

One of the hardest things about taking your side hustle full-time is having enough cash flow to get started.  If you can set aside the money you need to get started, it will greatly ease any pressure.  Now that you know your expenses, you know how much money you need to live every month.  Save for 6-12 months of expenses to give yourself the runway you need to get started.

Forecast how much you can realistically make with your side hustle?

Determine how much money you’d like to make and then forecast if that’s possible.  Maybe you want to match your full-time salary.  How many clients do you need or how many projects do you need to complete to reach that dollar value?  Now, how long does each project take and can you feasibly complete that work?  If the answer is yes, you’ve created a successful forecast.  If not, rework the numbers to understand what is feasible.

Set boundaries

One of the biggest reasons I was afraid to take Girl Meets Party full-time is I thought I would fail and would need to find another job.  Set boundaries to lessen the pressure of taking your side hustle full-time.  For example, if you can save 6 months of expenses, give yourself 4 months to turn your desired profit with your business.  If you don’t hit it within 4 months, you can assess whether you want to get a job or reassess your expenses.  The absolute worst case scenario is it doesn’t work out.  For a while, that petrified me.  Then I realized how empowering it would still be to say, “I had a dream.  I tried to make it work.  It didn’t, but I tried.”  That takes guts and any employer would appreciate the dedication and passion.

Believe in yourself

This might be the biggest piece of advice I can share.  After starting my business, I quickly realized that in order to be successful, I had to believe in myself.  When you’re getting started, it’s hard for others to understand.  Self-doubt can creep up when that happens.  However, if you believe in yourself and trust your gut, you’ll find your way.

 

Affectionately known to her friends as Millennial Martha for her love of DIY and decorating, Jen can’t help but pour her heart + soul into everything she touches. She’s loved to entertain since acquiring a table and chairs, and giving gifts is one of her favorite hobbies. Jen is the creator of Girl Meets Party. Her dream is to share her passions with the world in hopes to inspire others by making the seemingly unattainable attainable.

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