Many of us have experienced the pull to turn a passion project into a profitable enterprise. The promise of autonomy, creative control, and potentially unlimited earning potential draws thousands of creatives away from the traditional 9-5 every year.
However, the transition to business owner is considerably more complex than the internet would have you believe, and the financial journey from side hustle to scale-up is far from linear. There are several milestones you should keep in mind when scaling a business—these signal that your growth is right on track.
The first milestone to hit as a digital entrepreneur is opening a dedicated business account. Separating from your personal bank account is a step that many freelancers and entrepreneurs delay, because it feels like a hassle and an extra fee to pay, but it’s an important one to complete.
Not only does it make tax season a lot easier to manage, but it gives you a clearer view of how your business is performing and its real value. Failing to professionalise your finances can complicate client projects and create potential legal liabilities that pierce the corporate veil if you choose to set up a formal business structure.
The decision of when to hire freelancers, contractors, or a full-time employee is a critical inflection point that forces founders to think beyond their own capacity. If you’re scaling your business, you’ll reach a point where the number of clients you have and projects you’ve undertaken is too much to manage by yourself.
Many digital entrepreneurs pride themselves on being able to “do it all,” and there’s legitimate value in understanding every aspect of your business intimately. But this approach has a limit, and knowing when you’ve reached it is vital to avoid compromising on the quality of your output. If you can recognise the right time to take payroll off your own task list, you can save yourself considerable time and redirect that energy towards profit-building activities.
Outsourcing your payroll to an experienced specialist takes this complex and time-consuming task off your hands, ensuring your business is fully compliant with the latest legislation. Given that payroll rules have changed several times in recent years, this is a significant risk and burden reduction. By partnering with a professional firm, such as Wellden Turnbull, you gain this peace of mind without the cost or administrative burden of hiring a dedicated in-house employee.
Learning about the different types of funding, from bootstrapping and angel investors to venture capital, will help you appreciate that capital comes with more than a price tag. Bootstrapped businesses grow on their own revenue, maintaining complete control but accepting slower growth and higher personal financial risk, while angel investors provide the capital and often valuable guidance. However, they expect returns that could pressure you toward exits or strategies that don’t necessarily align with your original vision.
Venture capital funding provides your business with resources that can accelerate your growth dramatically, but with it comes expectations for exponential returns that fit only a narrow subset of business models. It also typically means surrendering significant control over your company’s direction, which doesn’t work for every business owner.
Investors aren’t impressed by hockey-stick projections. They’re convinced by founders who can demonstrate a rigorous understanding of their business’s financial mechanics and can articulate both the opportunities and the risks with clear-eyed realism. The process of getting investment-ready often provides just as much value as the capital itself, because it compels you to scrutinise your company and really hone in on what you want from your business moving forward.
It may seem premature to think about personal wealth management when you’re still thinking about payroll, but short-term thinking can be detrimental to your success. As your business grows, there’s likely to be an increase in your personal net worth too. Planning for succession means thinking carefully about compensation structures, dividend policies, and how you’ll build long-term wealth alongside growing your business.
With legacy planning, you’re not just thinking about your own finances but the future of your company and personal assets. Who depends on you—is it family? Employees and customers? What happens to your business if you’re incapacitated, and who has the authority and the knowledge to make critical decisions? These questions might feel morbid or pessimistic when you’re in growth mode, but they’re actually a sign of responsibility and professionalism. The time to consider succession isn’t when it becomes necessary. It’s when the consequences of not having a plan would be catastrophic.
Financial literacy is a core competency you need to build as someone who wants to take their side hustle to a full-time gig. There are implications to your financial decisions, so know when to seek out professional guidance, and how to evaluate whether that guidance serves your interests. The entrepreneurs who successfully navigate the journey from side hustle to an established business quickly realise that their financial evolution isn’t separate from their business evolution—it’s integral to it.