5 Things I Wish I Knew before Transitioning from Side-Hustler to Small Business Owner

BY • POSTED June 14, 2019
Home / Uncategorized / 5 Things I Wish I Knew before Transitioning from Side-Hustler to Small Business Owner

Ever since I quit my day job, small talk is much more interesting. Whether I’m at the coffee shop or a neighborhood barbeque, most pleasantries eventually come back to “What do you do for a living?” When I tell people I run a small business, I get a variety of responses. Some perk up, intrigued by my escape from traditional employment. Others are polite but hesitant to discuss much further.

I sympathize with both reactions. Owning a business is often seen as the embodiment of professional freedom and success, and I do enjoy a lot of flexibility, autonomy, and passion in my work. On the other hand, there are the insecurities, stress, and financial difficulties involved in starting a business.

In my years running a small business, I’ve encountered plenty of surprises—anyone who makes the jump into business ownership will. No matter what your side hustle is and how it’s fared so far, transitioning it to a full-time business will be exhausting and exhilarating. Here are a few specific things I’ve discovered along the way that I wish I’d heard about in a coffee shop long ago.

1. Support Groups Are a Must

Even though starting my company made me “the boss,” I didn’t feel like one for quite a while. In fact, I sometimes questioned my decision to go full-time, wondering if I would ever feel fully equipped to meet the demands of my business. I needed help, both personally and professionally.

My family and best friends were my personal cheer squad, joining me for late nights, long conversations, and some occasional stress-eating. In those first months, the success of my business depended largely on my determination, stamina, and overall well-being. Without those supporters reminding me to relax or to try again, I wouldn’t have survived the transition from side-hustler to small business owner.

Professional resources are also a necessity, and I wish I’d utilized them more fully. If you’re looking for financial help, there are government subsidies for some small businesses. SCORE mentors give personal advice, and the SBA provides high-quality materials online to help guide you as you create, purchase, or manage a business. I could have avoided plenty of headaches if I’d been quicker to get professional advice.

2. Business Structure and Strategy Affect Taxes

I was careful about selecting and declaring the business type that best suited me. For example, I knew I’d be taxed differently as a sole proprietorship than as an LLC. But aside from that one-time decision, what I wish I’d known is how much my day-to-day business would affect my tax liability and return. 

In the beginning, I was so divided between tasks that I wasn’t very careful with my financial records. Tax season rolled around, and though I did my best to maximize my deductions and write-offs, I’m convinced that my disorganization lost me money that first year. Just a few healthy tax habits like saving my receipts and tracking my car expenses would have been well worth the effort.

3. Running a Business Is a Full-Time Job

My business started out as a hobby, and I imagined that transitioning it to a full-time gig would just increase the time I spent doing it. I was wrong. Especially in those first months, I spent the majority of my time obtaining licenses, setting up accounts, keeping books, and covering a million other little tasks required for business success.

After my business got some momentum, I could afford to delegate the tasks that I disliked so I could focus on the ones I really enjoyed. I eventually created a position for myself that I love, but I didn’t realize it’d take so long to get there.

4. Hiring Is Complicated

Taking on employees eventually allowed me to work my dream job, but hiring is not as easy as it sounds. At first, I was unsure whether to buy software, use a freelancer, or hire a traditional employee. After clarifying which tasks I wanted to delegate, I decided to hire an SEO strategist to optimize my website. I set a budget for the project, did some research, and figured out how to report taxes for a freelancer. It was my first hire, and it wouldn’t be the last.

It was a good first experience, but I think it made me overly confident. As it turns out, hiring a full-time employee is much more complicated. Finding the right candidate for my first full-time position took longer than I anticipated, and after that there were plenty of forms to submit to the state and federal government. I had to get the right insurance, set up payroll, then train my new hire. It was a long and surprisingly expensive process.

5. Location Matters

I ran my business from home for as long as possible. It was familiar, and I knew how to deduct home office expenses. Eventually, though, my need for space sent me searching for a new location. I had lots of questions, but I wish I’d asked even more. I knew how to calculate monthly payments and track my commute, but I didn’t know what other geographical factors would be most influential.

As it turns out, business taxes vary from city to city, as do wage requirements and even the cost of utilities. In addition, some areas offer more competitive business services, like phone and internet coverage. The office I leased didn’t include phone lines, but I assumed I’d be able to interact with customers exclusively online. I quickly learned that wasn’t the case—65% of customers generally want to contact companies by phone, and my clients were no different. If I could do it again, I’d compare more of those little details before making my final choice on where I ended up.

My mistakes are unique to me, and each entrepreneur will experience their own set of difficulties. Don’t get me wrong—this shouldn’t discourage you from turning your side hustle into a business. I’ve had my share of coffee shop conversations, and there are plenty of success stories out there. Yours may even be one of them.

Author Bio:

Elaine is a digital journalist with a technical writing background. She currently focuses on all things security and sustainability at home and in the work place. As an involved citizen in her own community, she has a passion for helping small businesses and families succeed in their local communities. Elaine has written for a variety of online publications.

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