>
Prosper.com, finance, financial, investing, lending, borrowing, banking, credit card, payday, borrowers, lenders, debt consolidation, Prosper, investment, personal loans, personal loan, investors, investment opportunities, debt consolidation, refinancing

Turning Your Side Income into Your Main Income

The following post is from Melissa who blogs at Mom’s Plans who made the transition to working at home so she writes from experience.

Perhaps you picked up a side gig to pay down debt or to increase your savings.  Maybe you did it because your day job is not as fulfilling as you would like or does not utilize your talents.  Whatever the reason, people often start side gigs because they get to do something they love AND get paid for it.  I was ecstatic when I began writing for pay, and even more so when my writing business grew.  If you have a profitable side gig that you enjoy and are good at, you may find your little side business growing into a larger endeavor than you planned.  The next natural step is to wonder if the time is right to quit your full-time job to pursue your side gig full-time.  Here are some questions to consider:

Is there still room to grow?  If you are making a good income from your side venture, will you be able to grow the business substantially if you quit your day job and focus on this business exclusively?  Is the market still relatively untapped?

Do you have a strong network?  Before leaving your full-time job, consider the business relationships you have made in your side job.  Do you have satisfied clients who will happily give word-of-mouth referrals?  Do you have connections in the field?  When you are out on your own, you will need support from business associates and clients.  If these connections are weak, you may want to wait to quit your full-time job until these are stronger.

How will you cover health insurance?  One nice perk of a full-time job is the health insurance coverage.  When you venture out on your own, you may find that the health insurance premium can cost you most of your profits.  I was shocked to discover that COBRA coverage for my family of five was almost $3,000 a month.  Even if I would have gone with a cheaper insurance policy, the price would have been formidable.  Luckily, we were able to go on my spouse’s insurance.  Certainly, if you have the option to be covered by your spouse’s insurance, deciding to grow your side business into a full-time business is a much easier decision to make.

Do you have an emergency fund?  Many experts recommend an 8 to 12 month emergency fund.  This is especially important if you are quitting a secure job to work for yourself.  The initial months of full-time self-employment may be bumpy; do you have enough money in the bank to cover any lulls in income?

Will you make enough to contribute to your retirement?  Many employees have an employer-matched retirement fund.  This is a generous perk of working for someone else.  If you are self-employed, will you be able to find the money to fund your own retirement?

The idea of working for yourself is exciting and motivating.  However, before you make the leap, make sure your financial situation is strong as well as your social connections.  This can help you make a smooth transition from employee to self-employed entrepreneur.

CFM comment:  For another inspiring story, check out Crystal at Budgeting in the Fun Stuff.

Enhanced by Zemanta

4 comments to Turning Your Side Income into Your Main Income