Looking to grow your side business or hobby hustle into your full-time job? You’re not alone! A recent SunTrust survey found that more than half of Americans (54 percent) report having a side hustle at some point to generate extra money, making an average of $8,794 annually. According to the survey, many want to go pro with their side gig, but 83 percent of those surveyed note they face harsh obstacles, from not having enough time to dedicate to it (36 percent) to not having enough financial capital (30 percent).
If you fall within these ranks, SunTrust offers the following tips to help:
Time the Tipping Point. Determine when it is best to take a side hustle full time by weighing the trade-off of investing more time on your side gig versus your primary income source. Be mindful of the opportunity cost of sacrificing the stability of your total compensation package for unpredictable earnings potential.
Focus on the Fund-amentals. Make sure to develop an initial business plan, goals and competitive strategy, and decide how to fund your business and pay yourself. You’ll also want to include business cash projections and their reliability along with other funding sources.
Study the Setup. Determine the best legal structure for your business in conjunction with business advisors, such as an attorney and CPA. You’ll also want to understand regulatory issues in your industry, file appropriate permits and licenses and register your business and domain name.
Build a Budget. Develop a budget and use it to regularly track your progress against planned revenues and expenditures. A budget will also allow you to view financial priorities and targets and measure actual business performance against projections. These types of guardrails are critical when you are busy, and cash-on-hand can’t absorb cost overruns.
Track Your Finances. Separate personal and business finances with a business checking account. Set up online and mobile bank account access to monitor your daily cash position, pay bills and make easy transfers.
Bank on Bookkeeping. Set up financial software to establish good bookkeeping habits and automate recordkeeping. Consider linking your business checking account and your financial software so you can easily record income and expenses, track receivables, pay bills and manage inventory.
Work the Perks. Use credit or purchasing cards for expenses. Business credit cards offer tools to easily identify costs and manage employee spending limits and track usage. Online account access provides greater visibility into daily spending, and some cards even offer reward points or cash back on certain transactions.
Set Up for Sales. Ramp up revenue faster than costs and expenses by focusing on actions that have the greatest impact on sales and building a customer base during the crucial early days.