Should I quit my job and work on my side hustle?

It’s the dream, isn’t it? That fun, little sideline you’ve been working on starts generating some real money. Soon you find yourself wondering if it’s time to quit the day job and move into your side hustle full time. But what should you consider before you make the leap?

Do you really love it?

It’s always worth remembering that one of the reasons your side hustle is so much fun is that it’s not your full-time job. So, take a step back and ask yourself if it will be as enjoyable if you have to do it all day, every day. Conversely, if you think about it all the time, are endlessly enthused by it, and love doing it, this is a good sign.

How do you feel about your current job?

Dissatisfaction with your real job can be the flip side of wanting to take your side hustle full time. Are you just a bit bored? Could a small change in your job be enough to remedy this? Is your enthusiasm for your side hustle actually antipathy towards your job? Next, ask yourself if you are at a crucial point in your career — could the next year or so see you move into a much bigger role if you play your cards right?

None of these factors should necessarily deter you from quitting to pursue a dream, but they should make you think.

Is your sideline producing real money?

Is your side hustle producing an income that is starting to challenge your main income? And, just as importantly, has it been doing so for a number of months? Don’t fall into the trap of assuming one great month is how it’s going to be forever. But, equally, if the finances have been solid for six months and are getting better, that’s a very good sign.

Do you have a financial cushion?

How much of a financial cushion do you need to live for six months or even a year if the side hustle doesn’t deliver or is slow to get started? Bear in mind too that, even if the side hustle delivers, it is unlikely to pay you as regularly as a normal salary, so you may still need a cushion. Turning your side hustle into a full-time business while constantly worrying about how you’re going to pay the rent will be incredibly stressful and will increase the chance of failure. So, make sure you have enough put away before you make the leap.

What are your overheads?

If you’re single, in your 20s, and you rent, you don’t have much in the way of overheads. You can afford to make mistakes, even quite big mistakes, and can possibly live on very little if the side hustle doesn’t pan out. If you’re married with three children and a mortgage, you need to be a lot more certain or in a stronger position. If you are not the primary breadwinner in a family or relationship or you have a very supportive partner, you may also have more latitude to try something risky. Whatever the case, it is a good idea to look at your commitments holistically and ask yourself what your plan is if it all goes wrong.

How will it fit your lifestyle?

With many normal jobs, you can knock off at 6pm and the rest of your life is your own. But running a small business is rarely like this. If things go wrong at 9pm on a Saturday, you have to deal with it. If an irate customer calls while you’re having dinner with friends, you probably have to take that call. Similarly, you may enjoy large amounts of family time and play sports or do other recreational activities, and being self-employed could impact all this. Not all small businesses are like this — but many can be very demanding, especially when they’re starting or scaling up.

What support do you need?

Think about all the great stuff your company provides you with, such as IT support, organisational support, payroll, and so on. You probably don’t even think about it most of the time. Now you need to. What do you need to replicate those things, and how will you do it? The good news here is that the range of cost-effective, off-the-shelf solutions for SMEs has expanded enormously over the past few years and become much cheaper or even free. But even so, learning about everything from accounts to marketing to setting up a limited company can be a very steep learning curve.

Can you deal with working alone?

You may have a better feel for this if you were sent home for long periods during the pandemic. But, even then, you likely had a constant stream of calls and Zoom meetings with colleagues, which helped maintain esprit de corps. If you start running a small business, you’re likely to be by yourself at first. Think about how you will deal with this and how you might build the sort of support network you currently enjoy in your job.

How long will leaving your job take?

Extricating yourself from your current position may take time. You may have to work a notice period, and even if you can get this down, it’s likely to take at least a month in some parts of the world. A possibility to consider (if your company is amenable) is going down to part time in your current job — say three days a week — meaning you have both security and a chance to try something on your own.

Speak to people who’ve started their own businesses

There is no substitute for first-hand experience, so ask around. Who do you know? Or who do your contacts know? Don’t worry about asking for help. Many entrepreneurs live and breathe their businesses. They will be delighted that you are showing an interest and be happy to help you out.

What if it all goes wrong?

In the US, it’s estimated that around half of small businesses fail in their first five years, while in the UK the figure is 60% for three years. So, think about what you might do if it doesn’t work out. Will you return to a role similar to the one you left? Or will you try something completely different?

Whether your side hustle replaces your job, and whether it works out or not, by asking these questions, you’ll know whether you made a well-thought-out decision. And for many people, not following the side hustle dream is very much the right choice. What’s more, having thought about “the dream” seriously and rationally means they are far happier in their present jobs.

Visit the Global Career Hub from AICPA & CIMA for help with finding a job or recruiting.

Rhymer Rigby is an FM magazine contributor and author of The Careerist: Over 100 Ways to Get Ahead at Work. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.