Signs It Could Work
There are no leaps of faith here.
The first step in taking your side project full-time is determining whether or not you stand a chance of successfully quitting your day job and branching out on your own.
Up until now, your side project has been a labor of love. Without the pressure of depending on your hobby for income, you’ve been free to focus on the work side of your business with nary a thought about the business side.
Luckily, figuring out if your side project has long-term viability isn’t some cumbersome audit of every single variable in your life. Instead, you only have to find a definitive answer to a very simple question: “Can this really work?”
Your first job is to stop treating it like a side business. If you want to start a business, you must treat it as such; invest in it with both time and resources and focus on it. When you start thinking about a "project" as a business, everything changes and great things can happen.
Signs Your Side Project Really is (or isn’t) Viable as a Full-Time Gig
Unfortunately, the Angel of Entrepreneurship isn’t going to come down from Heaven, sound his trumpet, and declare you Officially Ready to Go Full-Time.
Rather, this is something you need to figure out yourself.
If you pay attention, there are copious signs and familiar “symptoms” that might suggest your side project may (or may not) be ready for primetime.
If Your Side Project Really is Viable…
- …You’ll have some success with word-of-mouth marketing. Word-of-mouth success is a sign that you’ve identified a need in the marketplace.
- …It takes on a life of its own—even if it’s a small one.
- …It’s already profitable. With low overhead, no office, and customers, you should have no problem turning a profit in your efforts.
If Your Side Project Isn’t Viable…
- …You find yourself saying things like “once I quit my day job, I’ll have enough time and resources to make this successful.”
- …It cuts into your time away from your day job—without producing adequate results.
- …You tend to create emotional reasons for doing it rather than researched, logical reasons. More on that in a moment.
Dispelling Myths of Entrepreneurship
If you’ve been an employee all your life, there’s a good chance you’ve always viewed entrepreneurship in a lofty, mythical way—as if people brave enough to branch out on their own had Jedi mind powers or a gene of ambition missing from the rest of the population.
There’s a real danger to discounting yourself as an entrepreneur simply because you believe in some misguided notion of what “entrepreneurship” really is. Don’t. There’s a stark difference between myth and reality:
- Myth #1: Entrepreneurs have to be Type-A personalities. “I’ve seen plenty of people who are successful at startups who don’t seem to fit this puffed-up ‘Type-A entrepreneur’ archetype,” says R.C. Thornton, author of the Decoding Startups blog. There is no “alpha male/female” requirement for a successful business.
- Myth #2: Dreamers make the best entrepreneurs. Josh Shipp, author of “Jump Shipp: Ditch Your Dead-End Job and Turn Your Passion into Your Profession,” says otherwise, recommending that you get more realistic about your goals before you make the leap.
- Myth #3: It takes a lot of money to launch a new business. Take a look at your own side project! If you’ve been able to attract some clients without any seed money, you’re moving in the right direction.
Bottom line: don’t let a negative self-image be a determining factor in whether or not you decide to make the jump.
Tips for Writing an Effective Business Plan
If you’ve determined that your side project has enough mojo on its own to continue with your entrepreneurial journey, your next step is simple: write a business plan.
But isn’t it too early to think about that?
Simplest answer: Nope.
A business plan is not a commitment. It’s not a loan from the government. It’s simply a plan you put to paper. Rather than waste your time taking steps before the business plan, you’ll find that writing a solid business plan for your potential full-time gig will naturally take care of all of those issues for you.
Once you’re done, you’ll have a much better idea of whether or not you’re ready to move forward. So get writing!
- Create your Executive Summary. This snapshot of your business plan addresses the market, your company profile, and the goals you have as an entrepreneur. The power in creating this summary is that you don’t really know what you want until you’ve written it down on paper. Inc.com has a great guide to putting together your executive summary.
- Draft a budget. Get real about the dollars and cents involved. Think about everything—from office space to pens to advertising dollars. If you’re working at home, will your heating and A/C bills increase? Consider EVERYTHING. Use an Excel spreadsheet-- they’re easy to manage and export.
- Conduct thorough Market Research and Analysis. This may be one of the most important steps in all of Chapter One. By researching your market, you’ll find a real “prognosis” for the success of your company. Skimp on this portion and you simply won’t have the right amount of information.
- Project your finances. Again, create this business plan as if you really intend to start it—even if you’re not sure yet. The U.S. Small Business Administration has some tips for financial projections.
Seed Money: How Much Do You Need?
Every entrepreneur knows that more money is always better. But how much money do you actually need? That’s a horse of a different color.
The math to figure this number out is not calculus. It’s simple addition. Estimate the following variables:
- Your salary
- Employee headcount and salaries
- Office rent
- Equipment needs (Internet, printing machines, etc.)
- Advertising/marketing budgets
If you figure out your estimated monthly costs, you now have a generalized idea of what “seed money” means to your business. If your business requires x dollars per month, then y dollars will get you through z months.
Getting the Timing Right: When to Quit Your Day Job
You’ve done all the work—financial analysis, figuring out estimated costs, etc.—and you think that your business has what it takes to make the jump. The only remaining question is not can you, but when can you quit your day job?
Every entrepreneur has a different opinion on this subject matter. Some feel that it’s better to jump in the water like a swimmer doing a cannonball to avoid procrastination. Others prefer the “dip your toe in the water” method of slow matriculation.
The truth is, there are too many variables to give you one single definitive answer. Maybe your spouse is pregnant. Maybe you’re pregnant. Maybe your boss has agreed to let you stay on part-time. Maybe your boss isn’t very understanding at all.
Our suggestion: try a beta test. Start treating your side gig like a full-time business one day per week (if you can manage a Saturday or an occasional personal day), or one hour per day. If your business grows according to your projections, you may be ready to make the jump.
Will there be self-doubt? Of course.
“I had no clue if I would be able to make money,” says Tessa Magnuson of Align Graphic Design, noting that with her husband’s support, she was comfortable enough to focus on learning on the fly.
“This has been an ongoing learning experience.”
Sometimes, the timing never seems right. If you’ve gone above and beyond, if you’ve done your homework and followed our tips and prepared yourself for entrepreneurship, the best time is now.
Holding Yourself Accountable
It’s tempting to dream big when you’re starting out, but you need milestones and deadlines to keep yourself accountable.
How to do it:
- Find another person. Another person bugging you about getting things done is a good way to ensure your success. Whether it’s your spouse, significant other, best friend, or co-founder, another human pushing you along will motivate you. (Use that extrinsic motivation thing to your advantage).
- Make a calendar. Put deadlines and benchmarks into a calendar, but make sure the goals are attainable. Saying you want 100 customers by the end of the year is daunting, but saying you want to talk to 5 new prospects each week is doable.
- Download some apps. There are lots of apps on the market for entrepreneurs looking to stay on task. Our top 5 goal-setting apps for entrepreneurs are Objectivell, Lifetick, GoalsOnTrack, 42Goals, and StickK.
- Sign up for events. To keep yourself accountable, sign up for events and speaking gigs. With these in the future, you’ll be more likely to work towards them, preparing along the way.