Summer is finally here, and business is booming from your side hustle. If you have been running a successful summer side hustle for a few years now, you might want to consider turning it into a full-time gig. But, what does it take to turn a side hustle into a thriving small business? It’s not as intensive as many entrepreneurs may think if you follow certain steps.
Here are the 5 best ways to transform your side hustle into its own year-round small business.
1. Draft a Traditional or Lean Business Plan
You might have already created a lean business plan for your side hustle. If that’s the case, it’s time to add more details about the business. If you don’t already have a business plan, it’s time to crack down and draft one. Most entrepreneurs choose to draft a traditional business plan or a lean startup plan, but the format decided upon often depends on the business’ needs. As your side hustle pivots into becoming a full-time small business, a detailed, traditional business plan will provide an objective look into the future of the company.
A traditional business plan outlines the following areas:
Executive summary. This is your opportunity to explain who you are, what the business does, its industry, location, how it makes money, and why consumers want these goods and services.
Business description, concept, and strategy. What do your products and/or services do? What makes them unique?
Industry analysis. A thorough analysis of your brand’s competitors.
Market analysis. A thorough analysis of your brand’s target audience.
Organization and management. The core responsibilities of your team members, if you have any employees or partners.
Financial projections. Information about cash flow, projected profit and loss, and a break-even analysis. Visuals are especially helpful for this section like charts or tables.
Financing request. A section specifically created for businesses seeking funding from investors.
Other additional information as it pertains to the company, such as trademark registration documents and letters of incorporation.
A lean startup plan is a little less intensive, but covers these key areas:
Value proposition. A clear statement summing up the value your business brings to its market.
Key partnerships, resources, and activities. Information about any partners your business may have and resources that allow the business to create value.
Customer segments, channels, and relationships. The ability to define your target audience.
Revenue streams. How the business is able to make money.
2. Incorporate the Business
Incorporating a business provides the company with loads of valuable benefits. It legitimates your business and allows you to build credibility much faster than businesses that do not incorporate. Entrepreneurs may choose from a variety of entities to incorporate their side hustle turned small business. Some of these may include sole proprietorships, partnerships, corporations, and limited liability companies.
Limited liability companies, or LLCs, often tend to be popular with entrepreneurs because the entity is flexible in terms of management and also provides liability protection. Ultimately, this acts as a safeguard between personal and professional assets. In the event of an unforeseen circumstance, like a lawsuit for example, liability protection ensures that your personal property will not be impacted.
3. Register for Trademarks
Before registering your mark, it’s important to conduct a trademark search. You may do this through the United States Patent and Trademark Office trademark database. This particular database provides information on claimed or pending marks. If it turns out your trademark is not available, you may need to create a new one. However, if the trademark is available it’s highly advised to file a trademark application as soon as possible so the trademark associated with your brand is exclusively yours.
4. File for Any Necessary Business Licenses and Permits
Every business is different and has varying needs depending on the location and industry of the small business. Once side hustles become full-time businesses, they may require business licenses and permits to operate and remain in compliance with state and city laws. Be sure to check in with your local Secretary of State to determine which business licenses and permits your company needs.
5. Conduct Annual Maintenance
As your side hustle transitions into a year-round small business, you may acquire even more legal necessities along the way, such as an employer identification number (EIN) and doing business as name (DBA). It’s important to remember that businesses incorporated as LLCs and corporations are required to file an annual report. This allows them to communicate any changes made in the business and stay in compliance with the state. It’s also important to manage, maintain, and/or adjust your annual budget, essential assets, marketing strategies, inventory, and all other elements of your business. It’s better to be organized than cluttered and chaotic, not to mention staying on top of your company’s needs make you more successful.
At the Long Island Center for Business and Professional Women, we help business women excel in their careers and achieve their professional goals through networking opportunities, member education, community involvement, and personal and professional development. To learn more about LI Center’s unique opportunities, contact us today!