Want to turn your side hustle into a business?
Starting a business takes a commitment. We know, the team behind Papermind have done it a few times - with success and failure at every turn. We wanted to share some of our experiences to help you get your side hustle stable enough for you to start making income.
So here’s the deal, I use to run a side hustle. After a few months of working on my idea I made the decision to take my new baby full-time and start a small business. Now this may sound like all of my dreams had come true; being able to work from the comfort of my home, create my own schedule and feel empowered about the work that I was doing. But the truth is, I was elated and simply petrified all at once.
As with any major transition (or just any major life change that we all encounter in our lives at some point), there are risks involved in making the decision to go for it. And you might be feeling the same, and that’s natural. Once you quit the security and guarantee of your job, it’s a tough road to go back - especially if it doesn’t turn out. But if there’s anything I can share, it’s the road not traveled that leaves you with the most regret.
So I want to help you avoid the road back to asking for your old job back. For some of you, that will happen, but remember the part I said about regret. I’ve now been an entrepreneur for more than twenty years, and I’ve been where you are now. No, it’s not easy. It’s incredibly tough and there will be times you will want to give up. But those who don’t prove that it’s possible. The following are some life lessons to help you turn your side hustle into a business.
Stability. Does your side hustle have it?
If you’re going to take the leap, you need to determine if your side hustle has the legs to help you stand on two feet. Put simply, can your hustle generate enough income every month to replace your current paycheck? And can it keep recurring the income month over month? Are there seasonality issues you need to contend with during the year? Is there potential lumpiness in your cash flow? If so, what do the highs and lows look like? It’s ok to have a few flat months as long as you have a few months where you feel like you’re slaying dragons. Create a 12 month plan and do your best to identify all of the outside influences that could disrupt the stability of your side hustle. You’ll also want to be able to measure what your potential for growth might look like in year 2 and beyond. That will help you set new goals as you get the fundamentals under control.
How much money do you need, each and every month?
You might be one of the lucky few who has already seen your side hustle generate income that matches, or even exceeds, your day job. That’s awesome, and if you have, then you’re really onto something that you can nurture and grow.
Ask yourself, how much money do you take home each month? How do you get your side hustle to generate an income that is similar to your job? What is your break even position? That’s important to determine before you quit your job.
What are the overheads of your side hustle? Are you outsourcing some of the effort? If so, what is the reliability of this external product or service? What if they tell you they don’t want to do it anymore? Does your side hustle implode? Consider what you need to have in place to ensure your new baby can survive the unexpected.
Time. How much will your new business venture need?
You’re probably in the middle; your day job needs your time during business hours, and your side hustle is a nights and weekend affair. But without the day job, what will the side hustle need to turn it into a business that pays you?
You need to consider being a solopreneur; you handle product/service development, marketing, sales, finance, meetings with clients, proposals/quotes. You’re doing it all. Think about your personal situation because your new business is going to need your full and undivided attention.
Planning. How much is required and when?
How much time does your side hustle need today? Ten hours a week? Fifteen? Get ready to work fifty to sixty hours a week. Yep, that’s what it will take to stabilize and nurture your new business. You’ll be wearing many hats and the time will add up quickly. Make no mistake, launching a startup (that’s what you’re doing) will take extreme effort. You won’t be calling it a day at 5pm. Start planning your time in to tasks.
Consider dividing your work tasks into the following categories:
Daily Tasks (what are the things that require constant attention? Sales, marketing and product/service development need your attention at all times).
Weekly Tasks (customer support, client meetings, weekly email updates, proposal/quote development. Depending on what your product/service is, customers need support as they navigate your new offering).
Monthly Tasks (financial management, invoicing, following up with customers who are yet to pay you, website updates, newsletter, oh.. and chasing that next customer!
The more you plan your days, weeks and months into the future, the more successful you’ll be!
Set yourself realistic goals. It takes time to build something great.
Goal setting will ensure you can stay focused and measure incremental success as you go. It’s also paramount to ensuring your side hustle can become a full-time business. Following are tips on how to make sure your goals are both realistic and achievable.
Consider how much money you are prepared to risk. It will be tempting to spend a big chunk to perfect your product/service, but you need to test other levers in your new business. If you don’t have enough money coming in then you need to be frugal about what you do first. Cash is king and without it there’s no business at all. Start by working out how much money you need for everything, and then be conservative with what you should focus on first.
Create goals for the week, month and overall quarter. What’s realistic in the next 90 days? You can’t work 24/7, so create goals that feed into larger and larger goals. As an example, you want to launch a new website in 90 days. What are all the steps needed to achieve this? CMS platform, Template Design, Copy, Images, etc. What is the website goal this week? What are the website goals next month? Be practical with your planning.
If your side hustle is making $3,000 per month, then well done. This is an enormous achievement. But don’t think it will be $30,000 next month. Be incremental in your thinking. Of course you should have aspirational goals, but pivoting from a side hustle to a business is going to take time. A sensible goal would be to make enough (after taxes) to cover your current salary. If you achieve that, then you really have something worth nurturing and growing.
Here are some goal setting examples.
Marketing Goal (I will need to increase the number of customers by 10% each quarter by promoting my product/service on social media and ensure I’m following a content calendar for when I should be publishing new website content)
Sales Goal (I will need to attempt to sell ten more products/services next quarter via my online store, enabling people to purchase directly from me using a credit card)
Operational Goal (I will need to ensure all customers sign my purchase agreement for the product/service, and I’ll use Papermind to create and manage these digital signing processes)
Customer Success Goal (I’ll work to improve our customer service experience by ensuring I personally thank every new customer via email and ask them how I could improve the product/service and if their expectations were met)
Document your business goals
Being successful is about setting and tracking your own goals. However, when you’re busy, it’s not as simple as it sounds. It can be a challenge to remember what you should be doing when it matters most.
We created Papermind, a desktop app for Mac, Windows and Linux to help you create documents, manage goals and get things signed by third parties. In fact, Papermind is ideal for planning your new business goals and track them as you progress.
Send documents for signing
A well run business has procedures in place. Items like client agreements, contracts, proposals and more. With Papermind, you can create all of these operational documents and it makes it so easy to send them to customers or anyone to sign directly from the app! And if any revisions are required, you can simply edit them and send them back!
Store all types of Files
Papermind enables you to keep all of your files in one place. These can be Office 365 files, Google docs, sheets and slides and media.
Create clear and achievable goals
Set goals like anticipated revenue, lead opportunities, customer details and sales strategies. Be specific so you can track and measure your progress.
Here are some examples:
- The aim is to generate $20,000 of revenue per month before the end of the first 12 months
- The aim is to onboard ten new customers from the Retail and Commercial Building industries by the end of the year
- The aim is six new sales opportunities next quarter
The Essential Small Business Document Checklist
Before you pivot from side hustle to business operator, there are a range of documents you’ll need to have in place to run your operation. The following is designed to assist you with what are the most common business documents and to ensure you’ve got most of your bases covered.
- Business Plan: Outline what your plan for the business is. This should start with a mission statement, what your product/service is, the potential market and why people would buy it, competitors and what your competitive advantage is.
- Business Structure: What is the legal structure? A sole proprietorship, partnership, an LLC (limited liability company), etc.
- Business Name: Be sure to research your desired name to ensure you can claim it. Someone else may have already taken the name you want, so consider a few options. When you’re ready you’ll need to register with your state agency. At the same time consider your domain name (URL) and your social media accounts as well.
- Tax ID Number: As part of the business registration process you’ll need an Employer Identification Number (EIN) from the IRS (you should consult what are the requirements in your country if you’re not in the United States).
- Business License/Registration: Whether you’re selling a product or providing a service you may need to research and determine if you need to obtain different licenses from your state or federal authority.
- Business Insurance: You will need to carefully research what insurance you may require in order to operate your new business. Some states require different types of insurance. Consider how you will need to cover things like damage to property, theft, lost goods due to shipping as well as liability insurance to protect against unexpected lawsuits that we hope are never filed against you.
A great resource (if you are in the United States) is from the U.S. Small Business Administration.
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Ensure you have agreements & contracts in place
You may work directly with customers in your current full-time role, and you know that sometimes things just don’t go to plan. Having agreements and contracts in place can be the difference in getting paid, or having to absorb a loss in your fledgling business. Cash flow is king, which is why protecting your cash has to be top of mind.
My experience is that agreements have saved my bacon on numerous occasions!
We all know that “the devil is in the detail” and while this is just a saying, there are times when the unexpected will happen because someone didn’t check with someone else, the correct approval process wasn’t followed, a small insignificant detail was overlooked (which became a large and significant detail), and so on. Running a business is like playing defense. You need to be watching where the ball is going and be able to respond. Having agreements and contracts in place with paying customers will ensure you can run a clean game and everyone wins. Ok, enough with the football metaphor.
Your documents need to be legally binding
Now you might be thinking “but my business is just me, and those contract things are what big businesses do, right?” Wrong. Any business should be operating with a set of expectations when engaging with paying customers. Infact you’ll impress some of your customers that you’re so organized and thinking about how to manage their expectations and deliverables using their money. You’re responsible for protecting your business from any legal action and financial loss, so start things right with an agreement or contract upfront.
Create legally binding documents and request signatures with Papermind
Within Papermind you can access our contract templates and send them to customers via email for approval and collect e-signatures from them. As you scale your business over time you’ll be dealing with clients, partners and suppliers of all types. Impress them by sending your terms of engagement and business conduct upfront. Have them sign your agreement or contract, rather than waiting on them to ask you to sign their paperwork. Take charge of the commercial engagement. After all, you’re in charge of your business.
Papermind provides a range of contracts for some of the most popular needs. These include:
- Services Contract: This agreement template is for when a user agrees to provide a service in exchange for an agreed cost
- Goods Contract: This agreement template is when a user is going to provide goods to another user in exchange for an agreed cost
- Employment Contract: This agreement template is between an employer and employee that outlines the details of the role they are being employed to fulfil, e.g. salary, role description, benefits, etc.
- Purchase Order: This template is for use when an order is placed from one organization to another for the purchasing of goods or services
- Statement of Work: This practical template describes the tasks and proposed deliverables that are required to complete a project
Use Papermind to collect signatures and get more deals done
Receiving a signed proposal from a customer is a great feeling. It’s the start of what should be a positive and successful relationship.
Having a verbal agreement isn’t going to cut it.
All of your business dealings need to be professional, concrete and clear between both parties. To start a new business relationship, you need to have legally binding documents in place.
Before you start any work, or ship any product, you need to have an agreement or contract with acceptance from your clients, partners and suppliers. The easiest way to do this is to use Papermind to create, send for signing and management of all your agreements and contracts.
Moving a deal along can take time. Cut the time down by being organized with an agreement or contract that you can send to your new client immediately, asking them to review and sign your document. Papermind makes it easier than ever to get your clients and partners to sign and agree to your terms. All they require is an email address to receive your document for signing.
Here’s how you do it
1. Select a template. Edit the content and add your logo
Forget the need for creating a document. You can focus on getting your agreement or contract sent for signing and close more opportunities a lot sooner.
2. Send via email and collect the signature
Click ‘Sign’ in Papermind and enter the email addresses of the people you’re requesting to sign your document. Forget emailing that document and asking them to sign off-line, or using DocuSign where you can’t store a local copy of your signed agreement.
3. You’ve got your document signed! Another opportunity has closed
Papermind will email you the signed document, once all parties have signed. All signing parties also receive a copy of the signed document. Your signed Papermind document will also appear as signed within the Papermind app itself.
Turning your side hustle into a business is exciting. Papermind can help you create all of your new business documents and keep them securely in a single place, safely on your desktop. All the best with your new venture!