Blogging, freelancing, loan signing, Etsy. We all know someone who earns extra cash from at least one. A considerable chunk of the workforce has taken up seemingly satisfying side hustles. We began wondering, “Can a side hustle become a full-time job?” Scott Roelofs, owner of RCG Valuation & Monetization, provided insightful advice on what it takes to transform a side hustle into something more.
1. What are lucrative side hustles that carry full-time potential?
“Rather than list several jobs, it may be more helpful to list job traits,” says Roelofs.
According to Roelofs, “Jobs that don’t require your time and energy are a great start.” He encourages side hustlers to accept their time and energy’s boundaries. “These two things are limited in quantity, no matter how much you hustle. If your side hustle can be maxed out in a 24-hour period, you will always be limited in the money you can make. Your energy will be mostly used up for your full-time job, so high energy use jobs can lead to burnout and high stress.” Put simply, balance is key.
While friends and family are typically the keepers of our balance, a lucrative product will appeal to “a larger audience than your immediate peer group.” Transforming your side hustle into a full-time job requires versatility. Roelofs suggests ensuring your product “strives to reach all age groups, genders and ethnicities. The more people that can buy your product increases the number of people that will buy your product.”
Roelofs also advised, “It must be able to be profitable.” The difference between this statement and “it is profitable” can be understood through “variable cost vs. revenue.” Roelofs explains, “Think of your variable cost as your items that are cost per item or the more you sell the more cost you have. If I make a chair and the wood is more expensive than what I can sell a chair for, I have a problem. However, if the chair sells for more than my variable costs but my rent makes me not profitable, you are still okay. Eventually, I will sell enough chairs that the profit will be more than my annual rent.”
2. What are the first steps to be taken?
For those interested in transforming their side hustle into a full-time job, Roelofs suggests first figuring “the number of units sold to replace enough income for you to live.” He was sure to highlight the term “’enough income’ because it may be a step back in your salary, but it may also be worth it to do what you love. Say to yourself, after all expenses, when I sell X units of my product or service, my income will be Y percent of my current income and that is enough for me to quit my job.”
Once this number has been figured, side hustlers need to establish an obvious identity. Roelofs gave a comically realistic example on what not to do. When asked, “What do you do?” do not respond with “We make dreams come true with all the colors of the rainbow, through the sale of copier toner!” As a business owner he clarified, “I am not knocking copier toner; we buy lots of it.” Specifically, Roelofs recommended, “Be clear, be straight forward, and stop all this salesy type fluff.”
3. What obstacles are to be expected and how can they be overcome?
In Roelofs’ experience, the largest obstacle to overcome is fear. He reasoned, “It is risky to put it all on your shoulders and take the plunge. Most assign a zero-percent risk to their current job. But that isn’t the case, is it? People lose their jobs all the time through firings, lay-offs or just the economy. Once you accurately assess the risk of your current job, maybe the jump to the riskier job won’t seem so big.”
Most importantly, while your side hustle should not consume all your time and energy, carrying out a transformation while working full-time will inevitably increase your work load. “Most people that haven’t done this will say a lot of smart things, many that I have read and tried to follow. The truth is none of us are good at it. Choose something that means a lot to you and make sure it gets done. The energy I get from making sure I’m a good father can give me more fuel that almost anything else.” Plainly, balance cultivates progress.