Converting a Side Hustle Into a Small Business

Are you the proud proprietor of a side hustle? Whether it’s baking, photography, music, or other, sooner or later you need to make a choice. Do you throw in the towel – happy for the good times but fed up with the lack of forward progress – or double down and turn it into a full-fledged business?

If you choose the latter – then congratulations! You’re on your way to becoming a small business owner. But this is where the training wheels come off. It’s no longer fun and games – it’s high-stakes entrepreneurship. One wrong move can spell disaster.

The good news is there are many ways for those with side hustles to convert them into small businesses. Not every side hustle qualifies as a potential business, but those that do must make the transition with little to no mistakes.

With this in mind, let’s take a look at seven essential aspects of converting your side hustle into a small business:

Follow the law

It’s one thing to run a side hustle on the weekend or in your spare time. But once you decide to go all the way, it’s time to turn it into a legitimate business. Depending on the state, this could mean anything from acquiring a permit to petitioning for a change in zoning. Consult the SBA guide on starting a small business for more information. Doing so will save you from dealing with the hassles and headaches of getting your business legally square after it’s already in operation.

Upgrade your equipment

A laptop, inkjet printer, and filing cabinet might be all you needed to keep your side hustle going. But now that you’re fixing to start a small business, chances are you’ll need better equipment. The good news is there are plenty of affordable pre-owned options available for sale. Depending on your credit rating, you might even be able to get a business loan you can use to buy these upgrades.

Invest in software

Business software is the lifeblood of modern business management. Without software meant to track spending, monitor productivity, and manage customer relationships, your small business will remain at a significant disadvantage. For example, fulfillment software is designed to help small business owners with the logistics of shipping and handling. While you might have been able to run your side hustle with nothing more than a pen and notepad, chances are you’ll be in over your head if you graduate to becoming a small business without also upgrading the way you manage your operation.

Find a workspace

One of the more exciting stages of converting a side hustle into a small business is finding your new and improved workspace. Depending on the nature of the operation, this could mean a commercial loft downtown, a manufacturing facility in an industrial court, or retail space somewhere in between. It’s essential to think of your business needs and the required workflow before choosing the right spot. Stand in the empty space and imagine your business running around you. That way you aren’t shocked to learn the space is unsuitable after signing the lease.

Hire employees

Many small business owners can manage their operations on their own. But others will need employees to get the work done during the day. Learning how to find the right workers – and how to manage payroll – will prove crucial in getting your former side hustle off the ground and converted into a full-fledged small business. While you might be tempted to hire friends and family, stop and ask yourself if this would work in the long run. You want your business to depend on hardworking employees, not fun-loving buddies.

Purchase business insurance

Last but not least, every small business needs some kind of insurance coverage. Which policy you get will depend on the nature of the business. The good news is most insurance agents will be happy to assist you in selecting the best business insurance coverage for your new venture.

Those with side hustles are almost always interested in the idea of turning it into a real business. Making it happen is easier said than done, but not impossible. It takes proper planning and preparation, as well as an awareness of priorities.