I started my business in 2009 on the side while working a day job. I had 3 clients and it was very much a side business. It took nearly 3 years to get to a point where I was even close to having a full-time business on my hands.
Here’s something I learned, and I try to pass this message on to others who are trying to grow a side business: running a side business is nothing at all like having a “real” full-time business.
A side business is like taking someone else’s kid to the park for an hour.
A real full-time business that survives in the real world is like raising your own child.
The responsibility gap is that large, and I have observed that most people with side businesses don’t grasp this fact.
Why is there Such a Difference?
By definition, a side business is something you do “on the side,” usually while working a day job that actually pays the bills.
The stakes are much lower.
If your side business fails, you might be sad but ultimately you still have your day job to pay the bills. You haven’t really lost anything.
A side business can treat each customer like a rock star because your customers are coming along one at a time. When your business is a real, full-time business, customers often come in waves and the workload gets overwhelming.
A side business may be able to “fly under the radar” with compliance. Not that I recommend trying to do that, of course.
But the fact is, a side business can probably get by with not filing a tax return, for example. A real business has to deal with compliance issues because if it doesn’t, the business could get in big trouble and end up going under. The consequences of going under are much more severe for a real business than a side business.
Keeping it Real
In my experience, most of us who try taking a side business full time end up overwhelmed. A few of us make it through.
A lot of what I’ve said here seems like common sense. But why is it so hard to make the leap?
I think it’s because success comes too easily for a side business.
When clients come along one-at-a-time (and sporadically) it’s easy to treat them like rock stars.
When you only serve a handful of customers over the course of a year, it’s easy to keep track of your income and expenses and manage the compliance burden. It’s also more feasible to conveniently “forget” to deal with the compliance aspect at all — and get by with it — if that’s what you choose to do.
When you have 5 clients and then you have 10, you’ve just doubled the size of your business without adding much stress to your life.
The problem is, many people with side businesses end end up thinking this is how it always is. You’ll just keep on growing and it will all be so easy.
You can lull yourself into thinking that running a business is easy and that you’ll never face obstacles.
Because that’s how it is in the side business stage. “Success” comes easily.
But it’s not the reality of running a real, full-time business. I’m working on a series of posts about this topic, which will appear sometime in the future, so stay tuned.
“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”