Side hustles are popular these days, and there are plenty of good reasons to get one. With a second job on top of your main one, you can build an emergency fund, boost your nest egg, pay down debt, or simply have more money on hand for things like leisure and travel. In fact, 54% of Americans report having a side hustle, and those gigs allow them to generate an extra $8,794 per year, on average, according to a new SunTrust survey.
But at some point, your side hustle may evolve into more than just a gig; it could turn into something you want to do day in, day out. Such is the case for 81% of Americans with side hustles, who say they'd like to take those secondary gigs full-time. But it's easier said than done, and it isn't without risk. If you're eager to make your side gig your primary job, here are a few key steps to take first.
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1. Build cash reserves
Taking a side hustle full-time often means losing a steady paycheck and instead moving over to a variable income. If that's a path you're willing to go down, you'll need healthy savings to fall back on in case it takes some time for business to ramp up. Most working folks are advised to sock away three to six months' essential living expenses in emergency savings, but a year's worth of expenses in the bank could serve as the cushion you need to feel comfortable quitting your main job and focusing solely on your side gig.
2. See if your side hustle is truly scalable
A good 36% of workers with a side hustle struggle with the fact that they don't have enough time to dedicate to it. And that's understandable. If you work full-time, it's not easy to carve out hours for a side gig. But if you're serious about making that gig your main income source, you'll need to figure out how much time you can reasonably dedicate to it when you're not employed elsewhere, and make sure the numbers work out.
Imagine you currently take in $30 an hour from a side hustle you spend 10 hours on per month. How many hours can you reasonably put in if you take it full-time? Forty? Fifty? Less? More? Take a look at your schedule, assess your personal commitments, and figure out what's doable. From there, you'll be able to better estimate the annual income your gig could give you and see if doing it full-time is feasible.
3. Explore your financing options
For 30% of workers with a side hustle, not having enough capital is the primary reason for struggling to take that gig full-time. If you're in the same boat, do some digging and see what resources are available to you. If you need a small business loan, see if there are community banks in your area that offer them. Keep in mind that many larger-scale banks service small businesses, too, and if your credit and financials are solid, you may get the funding you need to scale your venture. Depending on your circumstances, you may even have the option to tap your home equity to finance your business, too.
If the work you currently do on the side is engaging, fulfilling, and lucrative, it makes sense to consider doing it full-time. And while it's natural to be nervous about that prospect, if you take the above steps and go in prepared, you're more likely than not to wind up happy you took that leap.
