When Should Your Side Hustle Become Your Main Hustle?

In today’s world, it’s common for employees to have a side hustle—an extra source of income they dedicate time to after their usual 8-5 job. One question we often hear is, “When should my side hustle become my main hustle?”

The truth is, many people find it challenging to make ends meet with just one source of income. While a deeper dive into this reality is a discussion for another day, today we’ll explore the important factors to consider before changing your side hustle into your primary source of income.

Whether your small business started as a hobby that now generates income, or you saw a gap in the market and turned it into an opportunity, deciding to take the leap can be both exciting and daunting. Here are the key factors to consider:

1. Current Earnings

The first step is to assess your financial situation honestly. Ask yourself:

Is your side hustle generating enough revenue to cover your personal expenses and provide you with a stable salary?
If not, can you realistically dedicate six months of full-time effort to bring it to a place where it can?
Is there enough demand or growth potential to sustain your income long-term?

It’s essential to create a detailed budget to understand your financial needs and how your business can meet them. If your side hustle’s earning potential is currently too low, consider whether it’s worth investing more time or resources to increase profitability before taking the plunge.

2. Business Structure

While your business may be generating income, it doesn’t mean you need to rush to register a company. Sole proprietorships, for instance, are simpler to manage and might be more appropriate during the early stages of your journey.

However, transitioning into a company structure has its benefits, such as limiting personal liability and improving your business’s professional image, that said, it also comes with compliance requirements.

Before making a decision, weigh the advantages and disadvantages of registering a company. Sitting down with a professional advisor can help clarify the best approach for your specific situation.

3. Stability and Scalability

A critical factor to consider is whether your side hustle can provide consistent and scalable income. Ask yourself:

Do you have a steady stream of customers or clients?
Is your revenue reliable, or does it fluctuate significantly from month to month?
Are there opportunities to grow the business, expand your offerings, or enter new markets?

The ability to scale your business can make it easier to transition from a side hustle to a main hustle without significant financial risk.

4. Time Management

As a full-time entrepreneur, your time will be entirely focused on running your business. Consider whether you have the discipline and strategies in place to manage your time efficiently. Evaluate how much of your day will be spent on income-generating activities versus administrative tasks, and whether you may need to outsource certain functions to free up your time.

5. Risk Tolerance and Contingency Plans

Transitioning to full-time entrepreneurship involves risks. Consider your tolerance for uncertainty and create a contingency plan to fall back on if things don’t go as expected. For example:

Have you saved enough money to cover 6-12 months of living expenses?
Do you have a backup plan, such as part-time work or freelancing opportunities, to supplement your income during slow periods?

Planning for worst-case scenarios can give you peace of mind as you take the leap.

Final Thoughts

Deciding to turn your side hustle into your main job is an important decision that requires careful thought and planning. Evaluating your financial readiness, choosing the right business structure, and considering the stability and scalability of your business are all crucial steps.

At TAC Accounting Services, we specialize in helping small business owners navigate these transitions with confidence. Whether you need advice on business structures, financial planning, or compliance requirements, our team is here to support you every step of the way.