This transcript was generated from the episode audio and may contain minor errors.
When is the right time to quit your job and go all in? Love this question. I always hear this question, different forms of it come up throughout the year as I review questions and comments and as I talk with different people about what's going on in their business and their life. People are often asking, "How do I know if this thing I've been doing has been working a bit? How do I know if it's going to keep working?
Is it going to be working well enough for me to make it my full-time gig? If I was able to devote more time to it, could it make more money and therefore be more sustainable?" There's a lot of different ways to look at this question. I'll try to give you a few of them. I'll try to give you a couple of quick tips. We're going to hear today from Sarah.
She's been running an online vintage clothing side hustle. It seems like it's going pretty well. When is the right time to quit your job and go all in? Let's consider some milestones, maybe a financial target or two to see when it's best to transition your side hustle into your full-time work, if that is your goal and maybe it's not. It's also okay to just keep running the side hustle as a side hustle, but if you're in this situation or if you'd like to be at some point, hopefully this question and my answer will be helpful.
All that's coming up in just 30 seconds. Hey there, my name is Sarah and I've been running an online vintage clothing side hustle for the past two years while working a full-time corporate job. At first it was just a hobby, but over the past year or so, it's really started to take off. I'm making decent money on the side and getting tons of positive feedback from customers. I'm starting to wonder, how do I know when the time is right to leave my day job and focus on the side business full-time?
I'm passionate about it, but I'm also nervous about losing that steady paycheck. What kind of financial targets and milestones should I be looking for? Hey Sarah, sounds like a major life and career change. Really important decision here and congratulations on getting to the point where you can make that decision or at least thinking about it. I personally think it's important to have some clear milestones and a specific financial target in place for this kind of transition.
It's not just an intuitive thing. It's more like, okay, if I have been relying on a certain income for a while and I don't hate my job necessarily, like I'm not trying to leave as quick as I can, I am trying to build something that's sustainable, then I think it's really important to have some security in saying, okay, I feel reasonably confident that this side hustle income is more or less replicating my day job income or at least it's providing for all of the major expenses that I have. If I feel fairly confident that not only is it doing that now, but for the next six months or 12 months, I feel again, reasonably confident that it's going to continue, then that's a good sign. That's a good financial target. All of your expenses are met and you feel like that's going to continue.
Then also, if I devote more time to this project, if all of a sudden I've got five, 10, 20 hours or more a week that I can devote to it, can I in fact grow the business further? That may be somewhat intuitive, but hopefully you have some experience at this point. Hopefully you understand, okay, here's where I am holding myself back in the side hustle because of time and capacity. If I increase those things, then wow, this is going to be great. Now, if you don't see a clear path there, then that's to me more of a cause of concern or at least a cause of saying, maybe this is not the right time for me to think about going all in because a lot of people just imagine that, I don't think they imagine it this directly, but there's some kind of thought process where it's like, I don't really see what the revenue path is, but if I just have more time, I can figure it out.
That's a little bit dangerous because especially if you've always worked for an employer, being self-employed is very different and some people struggle with going from having only a few hours a week to work on their side project to all of a sudden I've got all this time and you're not always sure how to fill it and you don't necessarily fill it well. It's a skill that you learn over time how to be self-employed, work on different projects and such, manage your productivity and your most optimal hours and all these kinds of things. So that's why I tend to think, do you have your emergency fund, do you've got like six months of expenses saved up? Do you feel that this side hustle is going to meet most additional expenses going forward? And do you see this path to growth?
I think if you can answer yes to all those things, then that's when you start thinking about, okay, this is a good time to go all in and if not, maybe you just kind of reevaluate and say, are there things I can change to get to those parameters? What can I change about this business to where there is a clear runway for growth if I make certain decisions? And if not, then maybe it's a different business you need to be working on. Maybe this is more of a hobby side hustle or I mean, it's an income producing side hustle, but still not one that's going to become a full-time business. Lots of different paths.
Of course, people do it different ways, but I do think that having some objective metrics can be helpful in this situation, so I hope that is helpful to Sarah and maybe somebody else out there. Listeners, let me know if you have feedback or a question of your own or a situation of your own, sidehustleschool.com. We've got resources there and notes page for every episode and much more is coming up. Of course, new episode every day, always free. My name is Chris Guillebeau.
This is Side Hustle School. From the Onward Project.
