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If you have a profitable side hustle, you’ve probably considered taking your business full-time. However, before you take the leap and transition to life as a full-time entrepreneur, there are a few things you should do.

Some tasks are simple, like opening a business bank account and setting concrete goals. Others, like building a professional website, investing in growth strategies, and networking, will take more time and consideration.

There’s no doubt the process can be overwhelming, so here are eight specific things you can do to prepare for the transition.

Register Your Business and Open a Bank Account

If you haven’t yet, make sure to register your business. An accountant or business attorney can advise you on the best business formation, such as an LLC. Once you’ve registered your business officially, open a dedicated business bank account.

Many solopreneurs start their businesses without these initial steps. However, if you want to transition to full-time self-employment, it’s essential to treat your business like the professional entity that it is.

Set Concrete Goals

Successful entrepreneurs create clearly defined, easy-to-track business goals. So, before you quit your job and take your business full-time, write down specific benchmarks you want to achieve. Whether it’s a certain number of customers or a revenue goal, sketch out where you’d like to be at the three-month, six-month, and twelve-month mark of being a full-time entrepreneur.

Create a business plan that outlines how you will market your business, how you plan to grow it, and why you expect to stand out in the market. Researching your competitors and seeing what they’re doing right (and wrong) is also important.

Take this information and use your research to help you make a comprehensive plan to follow. That way, you know what to do on your first day of self-employment and beyond.

Secure Funding

Some businesses, particularly online ones, don’t have significant start-up costs. However, others, such as brick-and-mortar businesses or technology start-ups, will require upfront cash. 

There are many different ways you can fund your business start-up costs. You can self-fund it from personal savings, get a personal loan, or apply for a business line of credit. 

The funding route you choose will depend on your business goals, the type of business you have, and whether or not you want to give up equity in exchange for funding. For example, many entrepreneurs choose to pitch venture capital firms but give up equity in the process. Others apply for SBA loans, like the SBA 504 loan.

As your business grows and you secure the necessary funding, consider planning for a move to a larger space that can accommodate your expanding operations and customer base.

Create a Website and Social Media Presence

Your website and social media profiles are some of the first things your customers or clients will see. Make sure you have a professional website and that your social media accounts reflect your business values. 

Your business website should explain what you do clearly and have an easy way to contact you, while your social accounts should have a consistent brand presence with similar color schemes and your logo. 

Update your social media accounts regularly and take the time to learn about social media and email marketing as ways to grow your client and customer base.

Build a Strong Client or Customer List

Speaking of clients and customers, it’s vital to have plans to reach them before you make the leap to self-employment. If you have clients that use your services, build a list of several that can provide recurring revenue so you can project your first few months of self-employment income.

If you serve customers, take the time to understand the best ways to acquire new ones. Test multiple marketing strategies and methods until you find a consistent way to keep customers coming back to your business regularly. 

Once you build a strong and consistent client or customer base and you know you can reliably earn income while you’re self-employed, you can begin to make concrete plans to transition into full-time entrepreneurship. 

Set Up Health Insurance and Benefits

While some may enjoy the benefits of insurance coverage from a spouse, many others will need to find their own plan after leaving their day job. For those who’ve never done this before, this can require a bit of research. 

When you work for yourself, you’ll also need to arrange any “benefits,” like retirement plans. It’s a good idea to explore these costs ahead of time to ensure that your business income can cover the cost of your taxes, payroll, and more.

Invest in Growth Strategies

As you’re preparing to take your business full-time, invest in growth strategies. For example, make sure you’re regularly learning new skills and researching business grants. If you know you’ll need to purchase real estate as part of your business plan, find ways that you can buy property affordably or qualify for home buyer rebates.

Learn how to manage your bookkeeping and spend time understanding your cash flow. This information will help you know whether or not you can hire additional team members or invest in other products or services in the future as you grow.

Network and Find Mentors

Mentors who have made the leap from side hustle to full-time job can help you determine whether or not you’re ready to do the same. When you network and learn from others, it can help you avoid mistakes, saving you valuable time and money.

Networking in person is ideal, but it’s also wise to build your connections on LinkedIn to connect with entrepreneurs in similar industries. Connecting online means you’re not limited to business owners in your area, dramatically expanding your reach.

Take the Leap

Once you’ve completed the steps above, you’re likely ready to take the leap, even if you don’t feel completely ready. Many people are worried about their livelihoods, rising costs, and the economy overall, but data from a 2024 economic outlook shows economists don’t believe a recession is imminent. That means it might be a perfect time to break out on your own.

Keep these steps in mind before going full-time, and you’ll put yourself on the path to business success.

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It’s a great time to start a small business. Although many Americans feel pretty gloomy about the 2024 economic outlook, a majority think it’s primed for a rebound in the near future. Most Americans are already spending like boom times are back anyway, according to a recent study on spending habits. 

One-man startups that could be looking to scale up in response to consumer spending may be wondering when and how to hire their first employee. There’s no easy, one-size-fits-all answer to this question. 

If you wait too long to hire that first employee, you could be putting them in a workplace environment of low morale because of missed deadlines and heavy workloads. If you hire them too early, you’re wasting money and time devising work to keep them busy.

Here’s when and how to properly hire your first employees.

Crunch the numbers

Start with the fundamental questions: Will hiring new employees help your business save money or generate more money? If you’re just starting out, increasing your business’ income is more important than saving money, but both are important. If you can’t firmly answer yes to at least one of those questions, hiring someone may not make sense for you right now.

Take your emotional temperature

Objectively ask yourself why you’re thinking of hiring a new employee. Is it because it’ll help you level up your business, or is it for more emotional reasons?

If you’re desperately behind, overworked, or lonely being the sole employee of your business, those are valid concerns, but they aren’t necessarily good reasons to hire someone — especially if your desperation leads you to rush your recruitment process. 

If you’re hiring because your business simply isn’t bringing in enough revenue, it’s doubtful that the generative effects of bringing on a new employee will surpass their compensation. It might make more sense for you to enhance your cash flow through some lucrative side hustles to make extra money until your revenue increases.

Some common signs that you may be hiring prematurely or for the wrong reasons are that you can’t define a specific role for your first employee or you have very low standards for who you’ll hire. If you feel like you just need to get someone in the door, step back and think about why you feel that way and what your business actually needs.

Consider a co-founder

Your first hire doesn’t necessarily need to be an employee. They could just as well be a partner. If you come across someone who perfectly shares and complements your skills, values, and vision as a founder and entrepreneur, consider bringing them on board as a co-founder. Empowering a talented entrepreneur as an equal partner can often unlock hidden potential and put your business on the fast track to success.

Test drive a contractor

On the other end of the spectrum, you might want to take things slow. In that case, a contractor could be a great test case for what you need out of your early hires. 

The commitment to a contractor is limited and usually quite short — usually between a month and a year depending on the agreement. In that time, you can try them out in different roles and evaluate their overall performance. If they prove themselves to be a valuable asset, you can always transition them into a permanent full-time role.

You could also interview a freelancer. In general, freelancers work on much shorter terms than contractors. You could bring them aboard to work only on a specific project and conclude their employment when that project is finished. 

Think skills, not job titles

Alongside considering what you want your early hires to do, consider what kinds of skills and experiences will enable them to excel in that role. The more specific you can be, the better. Make a list and target only candidates who check all the boxes.

Understand that hiring is a two-way process

You know why you want to hire your first employees, and you probably have a pretty specific idea of the skills and experiences you want those first employees to have. But during the interview process, don’t forget that candidates are evaluating you as much as you’re evaluating them. 

Employees want to know that you have a defined role for them. Before you start interviewing, sit down and define the role you’re hiring for, including how you plan to measure their performance, the outcomes and deliverables that role will be responsible for, and the processes they’ll be expected to perform.

Think about the role on different timelines, too. How will that role work in the next year, and how might it evolve in the next two, three, or five years? For someone interviewing for a job, there’s no such thing as too much information.

Widen your hiring horizons

When you’re searching for that perfect hire, think globally. There’s elite talent all over the world, especially when it comes to qualified tech workers. If their role can be performed remotely, you could tap into serious savings, especially if they live in a country with public health care. Foreign employees also offer valuable insights into their local markets and can dramatically increase your business’ availability if they’re in a different time zone.

Consider tapping into youthful energy by hiring a promising college student. If the role you’re looking to fill can be performed by a recent grad or even a college intern, they could provide a huge amount of hustle and motivation, as well as novel perspectives and ideas that could be valuable to forward-thinking industries.

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If you have a small business or want to start one, conducting marketing research is vital to making informed business decisions. It’s a critical process that involves taking the time to understand your market, customers, and competitors to ensure your business is successful. Let’s take a closer look at how market research can help you make better business plans, develop products, and beat out the competition.

What is Market Research for Small Businesses?

There are two main types of market research strategies:

• Quantitative Research: This research style involves collecting measurable data in the form of numbers, survey responses, and similar statistics. Quantitative data offers the ability to objectively analyze the information collected.
• Qualitative Research: In comparison, this style of research is based on more subjective data gathered in focus groups, interviews, and social media interactions with customers. 

Ideally, you should conduct both quantitative and qualitative research for your small business to get a complete understanding of your customer’s needs and the overall market.

Why Small Businesses Need to Conduct Market Research

Small business owners can greatly benefit from proper market research in a variety of ways:

• Reducing your risk: Investing in your business can be risky, whether it’s developing expensive new products or expanding your staff. By completing research and learning more about your customers and competitors, you can reduce your overall risk and make more informed decisions.
• Identify trends: The marketplace is constantly changing, and it’s a good idea to know what types of products or services your customers are looking for today. If you know about current and upcoming trends, you can adjust accordingly.
• Test product viability: Part of conducting market research involves reaching out to your customers to see what they think. If you have a new product or service idea, market research can help you decide if it’s worthwhile.
• Tailor marketing: Completing market research can give you information about what media sources your target audience consumes so you can choose where to advertise in the future.
• Get funding: If you plan on seeking outside investments in the future, conducting market research is a must. It’s far easier to make your case to investors with hard data rather than hunches or speculation. 

6 Tips for Conducting Effective Market Research for Small Businesses

It’s not enough just to do market research. To find the best insights, it’s critical to do it correctly.

Define Your Goals

Before you decide to start, take the time to clearly spell out your goals. This includes writing down the questions you want answered when you’ve gathered all your data, which can help streamline the process and give you direction.

Some examples include:

• Who are my customers?
• What is my target demographic?
• How large is my market?
• How much are my customers willing to spend?
• What do my customers need and want?
• Who are my biggest competitors?
• What types of data collection methods will give me these answers?

Create a Budget

Market research can be time-consuming and expensive, especially if you want to have focus groups or conduct extensive studies. However, there are also affordable options, like asking for opinions on free websites such as Quora or Reddit. If you have an email list, a Facebook group, or an Instagram community, you can send out surveys or ask for feedback.

Regardless of the path you take, it’s essential to create a budget ahead of time. Market research is supposed to help you give insight into your customers, not create bad spending habits that might prevent you from hiring key staff or developing new products.

Identify Your Target Customer

Finding out data about your target customer is important. Once you learn things such as how old they are, where they live, and the types of products and services they need, create a buyer persona.

This means creating a detailed profile of your ideal customer. You can even give them a name, hobbies, specific pain points, and an age. After all, millennial marketing will be different from marketing to Gen Z. 

Use this persona whenever you think about building something to help your customers. You can use one (or several) buyer personas and ask yourself if you think it’d be a good fit for them. Even better, look for opportunities to find your customer’s unmet needs so you can develop ways to help them.

Research Your Competition

Researching your competition is an excellent way to determine what works with customers. There are likely companies with products and services similar to yours. Once you identify them, do what’s called a SWOT analysis, which stands for strengths, weaknesses, opportunities, and threats.

Look at your competition’s social media profiles, their marketing tactics, how they price their products or services, and their reviews. Use this information to see how you can better serve your customers, whether it’s with more competitive pricing, better customer service, or something else.

Collect Several Types of Data

When you’re completing your research, gather several types of data using multiple data collection methods. Here are some examples of the types of research you can try: 

• Primary research: Send out surveys and questionnaires to potential customers or your email list. Keep your results in a spreadsheet. If you’re unsure how to use spreadsheets, this is a great time to learn Excel.
• Secondary research: Look at existing data like academic studies, reports, and online resources. There’s no reason to reinvent the wheel if someone else has already published hard data that can help you.
• Online tools: Install analytics-tracking software, create social media profiles, and conduct keyword research.
• Focus groups: If your budget allows it, set up focus groups to help give you feedback on your products or services.
• Customer feedback: If you already have customers, make sure you solicit their feedback so you have real-time reactions to their experience with your business.

Regularly Update Your Research

Last but not least, regularly update your data. The market changes rapidly, and there are a variety of factors that can impact a business’s success. Once you take the time to conduct market research, make it a point to refresh it periodically. Look to see which products or services are performing best, and regularly read through customer feedback to see where you can improve.

Although running a small business can be challenging, being open to new ideas and staying on top of your industry can go a long way in ensuring you can keep growing your business for many years to come.

Featured Image by Arlington Research on Unsplash

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If you’re like a lot of small-business owners, you’re still recovering from the stress and chaos of tax season. If you gathered documents at the last minute or received a bigger bill than you expected, you were probably as much a victim of your lack of preparation as you were of the IRS.

There’s a better way to handle your small-business taxes. It involves a mix of common sense, solid year-round financial planning, professional tax prep, simple document tracking, and staying on top of the latest changes in the tax code. 

Here are eight easy tips for small businesses to navigate tax season with ease. 

1. Use a professional

Americans have a pretty pessimistic economic outlook in 2024, even though the economy is actually improving. As a result, many business owners are trying to pare back their expenses. One of the first services to go is often the tax accountant because many small-business owners think they can do their business taxes themselves. 

This might be true, but it doesn’t mean it’s a great idea. Having a professional handle your tax prep is actually one of the most valuable professional services that a small business can buy. A good tax pro will not only prepare your taxes at tax time, but he or she can also help you get your paperwork in order year-round and make sure you’re using proper accounting practices. 

Even if you have some kind of professional expertise that would enable you to handle your business taxes yourself, you need to consider if the time you’d spend on your taxes would be better spent on the core functions of your business. 

2. Don’t wait until the last minute

Doing your taxes isn’t something you do once a year. It’s a year-round concern. You should be tracking all your expenses, receipts, and financial documents throughout the year, as well as actively carrying out tax-planning strategies. Do this right, and you’ll be able to navigate tax season without all the stress. 

On the other hand, if you let bad spending habits from your personal life spill over into how you run your business, you’re setting yourself up for a rough tax season. Gathering and organizing all your invoices and receipts is a frustrating and time-consuming process, and it’s inevitable that you’re going to cost yourself money by losing out on key tax deductions. 

3. Use last year’s blueprint

If this is your first year as a small business, you’re going to essentially start from scratch at tax time. In subsequent years, though, you can use that strategy as a blueprint if it worked well. Get the same documents together, and then ask yourself — or your tax accountant — what’s changed and then go get those documents. Rather than starting at zero every year, this is an easy way to cover the basics and can save you a lot of hours. 

4. Keep your team in the loop

If you’re serious about tax planning, you should check in with your tax accountant once a quarter. This has a variety of benefits. One, it will force you to put together a preliminary financial statement that will include your profits and losses, as well as your main expenses. This gives you and your tax pro a snapshot of your business and is a great opportunity for course corrections. Some small businesses even prefer to handle their bookkeeping on a quarterly basis, so you’ll reconcile your books four times a year. 

Second, it gives your tax accountant a preview of what they’ll be handling at tax time. This is especially important if you’re expanding or if your major assets are changing. 

Third, it’s a chance to talk about your current tax strategies, such as the deductions you’re targeting and if they’re compatible with the trajectory of your business goals. Touching base throughout the year is the best way to avoid getting hit with unpleasant surprises at tax time.

5. Don’t overlook obscure credits and obligations

The tax code changes constantly, so make sure you and your tax pro are on top of the latest changes that affect your small business.

For example, you could be eligible for lucrative tax credits related to energy efficiency or hiring. Make sure you’re exploring these possibilities. 

Another area of recent change is the use of remote workers. If you have remote employees, you’ll need to make sure you’re in compliance with all the state and federal tax obligations related to them, which can often be counterintuitive. 

6. Send your invoices

Outstanding payments can be frustrating, especially if you get hit with a big tax bill. Try to collect your unpaid invoices ahead of tax time so you can wrap up all the loose ends from the previous tax year. Consider using accounting software that sends automatic payment requests so you don’t have to spend your time chasing down payments. 

7. Use separate accounts

Maintain strict separation between your business and personal accounts throughout the year. Put your business expenses on your dedicated business credit card or checking account only, and never use those accounts for your personal expenses. 

This will make your accounting much easier because your expenses will already be separated. It also sends the right message to the IRS, which might be assessing whether your business is run for profit or as a hobby — a distinction that can have profound implications on your business’ tax status.

8. Set aside a surplus or open a line of credit

Part of tax planning is planning how to pay your taxes. The reality is that no matter how carefully you conduct your bookkeeping, you could be in for a surprise at tax time. Experts suggest setting aside at least 10% more than you think you’ll need for taxes in case you’re hit with an unexpectedly high tax bill. 

If there’s any doubt about having sufficient cash on hand at tax time, open a business line of credit ahead of time. This way, your tax bill won’t adversely affect your cash flow, and you’ll have access to money that you can use to pay your taxes or for other business expenses. 

Featured Image by Kelly Sikkema on Unsplash

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Growing your business is often synonymous with growing your network. After all, your business is often only as good as your vendors, suppliers, employees, collaborators, and, of course, your customers. Building communities is the best way to catalyze innovation and connect people, exponentially increasing their potential. 

With uncertain signals in the 2024 economic outlook, this focus is more vital than ever. Let’s take a closer look at some of the best ways to build meaningful connections to help your business thrive.

Don’t Let It Take Over Your Time

One of the most common mistakes business owners make when it comes to networking is going overboard. If you live in one of the best startup cities in America, there’s a near-endless supply of networking opportunities, from conferences and summits to casual social engagements where you’ll find yourself rubbing shoulders with leaders in your field.

However, these opportunities can easily become a distraction. Networking is valuable and necessary, but it can’t take time and energy away from your business’s core functions. 

Experts suggest allocating a specific amount of time to networking; this could be per day, per week, or only on designated days or at designated times of the day. This often has a double benefit. First, setting aside specific time to network instead of only doing it when the urge strikes can often result in you actually networking more on a weekly or monthly basis than before. Second, it preserves the rest of your time for other work.

Know What You Want

Just like you should decide exactly when to network (and when you shouldn’t), you should also have a clear idea of what you want to get out of it.

Small business owners can have many different networking goals, such as raising brand awareness, looking for partners to help expand, pivoting into a slightly different area of expertise, or even recruitment. Defining these goals for yourself ahead of time will help you stay focused and on message. 

Don’t Focus Too Narrowly

It’s natural to feel in sync with business owners and entrepreneurs like yourself; you understand their journey and the obstacles they face. But make sure you network far and wide, ranging well beyond your specific role and industry. The most valuable insights and relationships are often the result of differing perspectives coming together. 

Beyond that, networking with professionals outside your immediate sphere will give you a richer perspective on your industry, often leading to valuable insights.

Let People Do Favors for You

Many people think of demonstrating value as a one-way street and that the best (and perhaps only) way to do so is to do things for other people. But this is a very limited view of human nature. While it might sound counterintuitive, asking someone for a favor can be one of the best ways to cement your relationship.

Most people like to do favors for others, sometimes even more than they enjoy receiving them. Doing things for coworkers or bosses allows them to demonstrate positive qualities like generosity, altruism, and competence. 

Don’t Be a Taker

Still, don’t immediately start asking for favors and referrals when you forge a new contact. At the start of the relationship, share your knowledge and contacts first to make it clear you’re not just a selfish opportunist. More often than not, this kind of upfront generosity is eventually returned many times over. 

Don’t Just Look Up

One of the most common goals for small business owners is to find mentors who can help them take their brand to the next level. But that shouldn’t be your sole focus. 

Network in every direction. That means reaching out not just to powerful mentors further along their business journey but also interacting regularly with more junior colleagues who are just starting out. This is a great way to build out organic networks and uncover valuable hidden talents that can benefit the community. Plus, it’s not uncommon for high-performing younger employees to quickly reach the upper echelons of the company or industry. Who knows what that cup of coffee with a junior coworker might lead to someday?

Make Introductions and Connections

Don’t just think about who you can connect with. If you have two contacts who clearly share a vision but don’t know each other yet, introduce them. Building relationships between your contacts is a great way to build goodwill, multiply your influence, and cultivate the network around you. 

Be Genuine

Don’t be too transactional about your networking; approach it like any other substantial human relationship. Don’t restrict your conversation to business. Talk about your personal lives, shared hobbies, or anything else that might come up. 

And remember that you shouldn’t make networking all about yourself. If you think back to horrible bosses and coworkers you’ve had in the past, they probably bored you with relentless monologues about themselves. The more you can make the conversation about the other person and solicit their opinions and feelings, the more fruitful your networking will be. 

Cultivate and Always Follow Up

Networking isn’t about making easy money fast; it’s about forging long-term relationships. Check in with new networking contacts soon after you make that initial contact. Remind them how you met, and continue the conversation. This will firm up your connection and leave them with a positive association. 

If you said you’d give them materials or a referral, make sure you follow through. This doesn’t have to be a face-to-face meeting or even a phone call; a social media message or post can be very effective, too. Even more importantly, this has to be a consistent effort. Reach out to your contacts regularly, or your network will wither.

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