You’ve got your idea off the ground and you’re starting to make sales. You can really see your vision coming together. You’re getting closer and closer to that end goal of leaving your 9-5 annoying boss forever... Congrats! But when is the right time to finally take the plunge and turn your side hustle into a full-time gig?
This was something that we spent a lot of time thinking about (and re-visiting) in the 18 months that we were side-hustling. Connie and I launched Three Ships (formerly NIU BODY) in March 2017, however it wasn’t actually until September 2018 that we were both full-time! In this blog post, I’m going to help break down the considerations that we made before going full-time with our baby business. Having this structure really helped us to feel comfortable and confident in our decision, allowing us to hit the ground running:
1. What will you do with those extra hours?
This may sound like a strange question since when you’re side-hustling hours are limited in the day, but it’s really important to think about. Going full-time and leaving the structure/oversight of your 9-5 is a big transition. Now that you have freed up all those hours, what are you going to be doing? What are the most mission-critical tasks for the business? How do you balance this work across your team? How will you structure your days?
What helped us was having a 30, 60, 90 day plan in place to cover the major projects that we would each be working on for those first 3 months. This took away the unknowns of “Okay, so now what?” and also ensured that we were heading in a clear, intentional direction.
2. How long until the business can pay you?
Look at both a best and worst case scenario. Based off of your current sales/level of growth, how long will it be before you can start paying yourself? How much would you likely start off with paying yourself?
In the case that you have a co-founder you want to make sure that these things are super clear before going full-time. This way, by having a very open conversation about your salary expectations/timelines you avoid any miscommunications.
3. Do you have enough in personal savings?
Next, you should calculate how much you need to save before taking the leap. What are your current monthly expenses? Make sure that you set a realistic number. Some founders are fine with eating Kraft Dinner for months on end to save money, but if that’s not something you could do, then be honest with yourself!
Once you know what your monthly expenses are, multiply this by the number of months you think it will take before you can get paid. For us, we assumed that we wouldn’t be taking money from the business for 6 months after going full time. This allowed us to plan for how much we needed to have in savings before going full-time. The goal of doing this exercise is to ensure that you are in a healthy financial position personally so that you don’t have pressure to pre-maturely pull money from the business.
4. Do you have some traction that shows you have product market fit?
For us, knowing that we already had some traction was key! This meant that we already had a loyal base of consumers and a handful of retailers. We had iterated on our packaging, pricing and product assortment so that by the time that we went full time we were able to take off right away.
5. What about your co-founder(s)?
All of these conversations should be done with your co-founders (if you have them!). Are some of you going to be going full-time before the others? At what point will everyone be full-time? Are there going to be impacts to equity levels depending on who goes full-time first? What if someone leaves the team before going full-time? What are each team members expectations after going full-time?
All of these are kinda uncomfortable conversations, but super necessary to have up-front to avoid conflict down the road.
And that wraps it up! This were the top considerations that we kept in mind when deciding when we should go full time. It helped us to have a structure in place to take out the emotion from this very exciting/scary decision!
If you want to chat through this more, message me! I’d love to help 😊 You can reach me at firstname.lastname@example.org
Until next time ❤️