Can You Turn Your Side Hustle into a Business? Consider These 3 Things

“You are fired.” No one wants to hear those words, especially if your feeling of self-worth is tightly linked to your job. I was working in broadcasting for about a decade when I got fired. The television station eliminated my department and tried to make me quit to avoid paying unemployment. I would not, so they fired me. It was the best thing that ever happened.

I always thought I would someday own a business. While working full-time, I freelanced as a video producer for many years. Today, you might call it a side hustle. I made good money and got comfortable with the extra cash. When I lost my full-time job, I looked at the options. Go back to work for someone else? Freelance? Side hustle? Open a business doing what I love?

The options

I knew I did not want to work for someone else. Like millions of others, I wanted more control over my life and work. When you freelance, you can control what work you take and what you turn down. However, it can also be lonely. You do not have a consistent team to rely on. You are a one-person operation doing everything.

For some, the side hustle is another option born out of a necessity to earn extra cash. For others, it is a hobby or creative venture that feeds their soul. Generally, a side hustle is not a full-time endeavor, at least not immediately. I decided to stop freelancing or doing the side hustle and go for it. Thirty-five years later, my business is still thriving. I learned how to turn my passion into a credible and pretty cool business. If you decide to do the same, here are three things to consider.

1. Can you go the distance?

There are many examples of companies that grew quickly, took advantage of a trend to become household names and then failed to go the distance. Blockbuster. Kodak. Blackberry. Sears. We can learn from these case studies. No one has a crystal ball, so ask yourself some tough questions.

Is your business idea something people want or need today? Will they still want it five years from now, ten years from now? Will you be able to introduce new or complimentary products and services? Or are you a “one-hit wonder?” To survive, you must be able to change course and adapt when the market changes.

In my case, the need for media production by businesses has increased dramatically. What we create and how we create it has changed, but we have been able to adapt. It takes a huge effort to launch a business. Don’t waste your effort creating a formal business if you cannot go far.

As a side note, some businesses are created to take advantage of a hot product or service. This short life-cycle business — think of pop-up stores — has a different objective.

2. Can you build a team?

When I first started my business, it was the epitome of “lean.” A team of two. That is not unusual, but if you want to make an impact, you eventually need people. And not just any people. The right people.

As a business leader, you must create the kind of place that reflects your vision — where the work gets done and people thrive. Culture is a huge buzzword. I like to keep it simple. I want people who value the same things that I do. Integrity. Honesty. Hard work. Fun. Creativity. Caring for each other, our customers and the work. You cannot build a team if you cannot articulate your vision. You cannot build a team if you are not action-oriented — do what you say you will do.

Building an external team of experts is also critical for turning a side hustle into a business. You need legal help, accountants and human resources. Business regulations are complicated and constantly changing. There is no way a smaller enterprise can do it alone. I have seen many try only to end up in court due to honest mistakes.

You might have a great product or service, but it takes a team effort to make a business successful.

3. Can you get the cash?

Finding the money to launch your business can be daunting. It is ironic. You may not have the track record when you most need the money. When you do not need it, everyone wants to lend it to you. With freelancing or a side hustle, you can keep costs down. Work out of your home. Keep inventory low. As you start to buy equipment, hire people and market, the costs pile up quickly.

Would-be business owners often use credit cards to get started. They borrow from family and friends or use funding campaigns. When a family member wanted to buy a business and could not get a loan, my business loaned the money. I got it back, plus interest. However, that is not typical. The National Small Business Association (NSBA) recently reported that over one-third of small businesses (37%) cannot get adequate financing. That is the highest it has been since 2008.

There are options. Remember that team of external advisors? Now is a good time to leverage their help. Advisors have relationships and can make introductions. Credit unions are an option, and there are alternative lending sources. You can go online, but be careful of predatory lenders and outrageous fees. The bottom line is that you need cash to launch and keep you going.

Should you turn your side hustle into a business? That depends. There is freedom in doing your own thing and making great money. However, it is also rewarding to build a business. Be sure before you take the leap.

Source: entrepreneur.com