I didn’t have the luxury of building my business while working in my 9-5 (check out my story here) but I know many of you do and one of the biggest questions I’m asked is when to know it’s time to leave your 9-5 and go full-time in your side hustle. Although this is a completely personal choice and it needs to be your decision to do so, the guidelines below will help you evaluate whether now’s the time to make that leap.
Criteria #1: You’ve replaced your income.
So this is the DUH one, but look, if your side hustle has taken off and you’re making as much in your business as you are in your 9-5, it may be time to take the leap. That said, money isn’t the only reason people stay in their 9-5s, so if you are there for other reasons (building up skillsets/experience, for instance), then this shouldn’t be the deciding factor. A few things to consider, however, if you are in this position:
- Your salary isn’t the only financial measure at your 9-5. Don’t forget to factor in the value of your health insurance and any other benefits your current employer is offering you. If your side hustle isn’t making enough to cover these benefits, you may not be ready.
- Your side hustle should be making enough profit to replace your 9-5 income. What do I mean by profit? This is the amount you have after you subtract ALL expenses from your sales/revenues. Make sure that you are including taxes in this calculation.
- The income from your side hustle should be consistent and growing. So if you’ve had one great month, you might not want to leap yet. Make sure you’re going to hit that income level consistently for a few months (my comfort level is 6 months but it’s up to you!) and that your income is actually growing, not decreasing. For example, if you run a seasonal summer business, consider that your income will drop off in the winter months.
Criteria #2: Your business will not grow unless you devote more time to it.
Depending on the nature of your side hustle, you may be able to put in a lot of time upfront and then once it’s up and running, it will generate income for you on a more passive basis. However, if your business requires your time to make money, you may hit a point where you find you are not able to bring in any more revenue until you can devote more of your time to it. If you’ve hit this point, it may be time to take the leap and go full-time in your business, but before you do, consider the following:
- Are you absolutely at full capacity? If you are turning away clients/customers and the only reason is because you don’t have more time, then it may be time to leap.
- How much more income can you bring in if you had more time? How confident are you that this income will come in and how quickly do you expect it? If you literally have clients waiting on the sidelines for you, ready to sign tomorrow, then it may be time to leap.
- How much do you have saved to float you until you can bring in the additional business? Plan for the unexpected – what if some of those clients on the sidelines change their minds? Or you lose a client? Making sure your income comes from a few sources will make your leap less risky.
Criteria #3: Your 9-5 is breaking you.
I’m going to be honest with you, this is where I was at. I loved the work I was doing, but I struggled with the environment, the lack of mentorship and minimal career advancement potential. I dragged myself to work every day, and I took every opportunity I could to get out of the office. Most nights, I cried in my car on the way home.
Does this sound familiar? If so, it may be time to leap. Look, it’s all well and good to say that you should build your business while collecting a paycheck, but if that paycheck is costing you your health, well-being and what feels like your soul, then it’s probably time to get out. Yes, taking a leap of faith is scary. Yes, leaving without a solid plan or months of savings is risky. But I did all of this, and I’m OK. For me, it came down to the hell I was going through every day, and how that was affecting my health, my relationships and my motivation. Honestly, I was terrified that if I didn’t get out when I did, I would crumble into a dark state of depression and lose all hope for my future. Dark? Yes, but that’s where I was.
So I left. And it took a bit of strategic financial planning, some risk-taking and a lot of hustle, but I’m on an upward path now and I don’t regret my leap for a second. This doesn’t mean that you won’t hit road bumps, because trust me, I have. It also doesn’t mean that you will definitely be successful. You may have to return to work or find other ways to supplement your income while you are building your business. But if you are stuck in a soul-crushing job that is tearing you apart, you have to put your health and well-being first and believe in yourself enough to know that there is something better out there for you.
If you are in this spot, I recommend doing as much planning as you can before you take your leap, even if this is only a few weeks or so. Check out my Taking Your Leap of Faith Checklist for a few concrete actions you can take now to make your leap as smooth as possible.
Bottom line, there is never a perfect time to go from side hustle to full-time dream chaser. A lot of factors play into this decision, and ultimately, it’s yours to make. No matter where you’re at, when you take that leap it’ll feel scary. Believe in yourself, in what you’ve accomplished and in your ability to make it happen.