When your side hustle becomes a business, it’s time to make some changes and take it a lot more seriously. It can happen slowly or rapidly and often takes you by surprise. So, from ensuring it’s what you want to do to managing finances, here are some handy suggestions.
Always Make It Official
A business needs to be registered wherever you live. This is mainly for tax purposes, and it’s recommended you do this ASAP because you can end up with hefty fines and even jail time in some countries. It’s a bit different in each nation, but for clarification, the UK’s HMRC uses UTR, and the US’s IRS uses EIN. With the right info, it can be quick, but if you are wondering, “How long does it take to get an EIN number?” It really depends on how you make your application.
Try to Identify Your Passion
A burgeoning side hustle that explodes can take you by surprise. It can often begin with an idea or musing and may not even be something you love. Yet this is more important than most people often think. If you don’t love what you do, there is always the chance of becoming bored to the point of shutting it down. But as a business, there is the responsibility of employees, family, and even your current lifestyle. It helps to make sure you are passionate about what you do.
Make Business Plans for Your Side Hustle
Even with partners, A lot of businesses fail, and if you are passionate about yours, you want to make it last. Around 20% of new businesses shut down in the first couple of years, and most don’t make it past ten. There are various reasons for this. However, one of the most prominent is the lack of a structured business plan. A business plan offers company protection, as you can’t run it ad-hoc. Your plan must be dynamic and changed as the needs of the business grow.
Learn About Your Finances
When you can afford it, hiring accountants is recommended, as a bigger company has more complex finances. However, that doesn’t mean you should shy away from the financial side of things. Quite the opposite, in fact. Knowing the finances means you can spot where things are going wrong, where you can cut costs or invest and notice potential irregularities. This also means you can defend your business from criminal or fraudulent activity in the event it occurs.
Keep Putting in the Work
Money might be rolling in, but that doesn’t mean it’s time to sit back and relax. No one is suggesting you work hard until you burn out. But it always helps to remain hands-on and part of the day-to-day running of things. Scaling means making many changes, and without oversight, this becomes a jarring task. Of course, hiring experienced management will help. Yet the most successful businesses today are the ones where the owners/CEOs are actively involved.
You need to make it official when your side hustle becomes a business. Dynamic plans are also essential to change as it grows. And it also helps to stay connected and hands-on every day.
Do you think you’re side hustle will become your business one day? Let me know in the comments below!