These days people can monetize just about anything they do. With the newfound accessibility of e-commerce platforms such as Shopify, and with the ease of marketing via social media, personal side hustles have become commonplace for entrepreneurial folks from all walks of life. In fact, a 2019 Bankrate survey found that 45% of American workers take on side jobs for extra income. Putting these positive drivers aside, the pandemic made side hustles a necessity for many whose jobs were cut during the economic downturn last year. While many of these projects and hobbies may provide a modest amount of additional income, your side hustle could have the potential to become a full-fledged business.
What separates these potential businesses from the pool of embryonic side hustles? From my own experience as the co-founder of content marketing platform Cohley, it’s a combination of personal introspection and honest evaluation of viability as it pertains to your business. Every entrepreneur’s situation is different, but most should heed the following list of signs to determine whether their side hustle can be something more ambitious and profitable.
First on the road to full-time entrepreneurship is answering the question: “A few years from today, when the opportunity is long-gone, will I regret not going for it?” This question should be the absolute indicator of which direction you should follow, as an apathetic business owner is destined to fail while a driven individual should at least give themselves a chance to pursue their passion.
Sadly, passion isn’t enough to propel a side hustle to success in the business arena. The next step is determining where and how your side hustle could fit in the current marketplace, and whether there’s a reasonable path to profit in the long run. This should be a simple enough task based on the volume of customers your side hustle is pulling in in its current state. If you’re finding that your side hustle is demanding more and more of your time, that’s likely a good sign.
Not seeing this level of excitement from your side hustle yet? That doesn’t mean it’s necessarily the end of the road. With detailed observation of your side hustle’s competitors and broader consumer needs, there could be room to innovate and fill a certain gap in the industry you’re looking to enter.
Beyond your individual business’s potential, it’s important to consider the larger financial context surrounding your ultimate decision to become a small business owner. Almost all major business success stories begin with uncertainty, and many entrepreneurs are forced to operate at a loss for a significant amount of time in order to grow their consumer base and business. If your money management skills are sharp (or at least coachable), your business should be able to withstand this financial “hazing” period.
Though it may be discouraging to know that you will almost certainly face monetary losses when you begin your journey as a founder, you can rest assured that your experience is not uncommon. For tech startup founders like myself, adversity in customer acquisition and financial solvency is practically a ritual that all must endure for at least the first two years of existence.
The final consideration on the business founder checklist is labor. The beauty of side hustles is the independence and liberty it lends the individual. Your self-sufficient, miniature enterprise can run like a well-oiled machine at its size, but in order to scale with a larger customer base and an increased suite of offerings, employees will naturally come into the picture. While qualified and talented employees are imperative to the growth of any business, you should consider how large your workforce will need to be. Wherever digital tools and software can play a role and minimize human work, you can save money (remember that money management I mentioned?) and likely make your business run more efficiently as it expands.
If you’ve read these signs and remain confident in your business, it may be time to pull the trigger. Before committing to a potentially life-changing decision, you should take a long, hard look at your current priorities and decide whether founding a business aligns with them. It’s easy to get carried away with a fun side hustle that soon turns into a demanding nightmare when it becomes a fully realized operation, but for many entrepreneurs, that fun never ends.
Taking a calm, calculated approach to an exciting business venture can be challenging, but by reviewing all the options and potential outcomes in advance, your inner entrepreneur will be all the more likely to take that side hustle into the big leagues.
Tom Logan is the Co-Founder and CEO of NYC-based Cohley — the tech company that’s changing the way brands generate and test content. Tom leads with a “people first” mentality, continuously moving Cohley up the ranks of “Best Places to work in NYC.” Tom entered the tech world back in 2011 in Silicon Valley with Wildfire Interactive then spent a few years at Google before joining UGC-focused Piqora where he met his Co-Founder, Erik Graber. In his free time Tom likes to play golf, drink wine from his native Santa Barbara County and relive his 15 minute of fame: Winning a car on The Price is Right in Bob Barker’s final season.