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From Side Hustle to Legit Business: Is It Time to Level Up?

05/05/2025

By: Envista

From Side Hustle to Legit Business: Is It Time to Level Up?

Side hustles are more than a trend—they're how many people explore passions, build skills, and generate extra income. Whether you're making jewelry, selling baked goods, consulting online, or flipping furniture, you may reach a point where the line between “hobby” and “business” begins to blur.

But how do you know when it’s time to go legit—and what does that process even look like?

Signs You’re Ready to Take the Next Step

  1. Consistent Revenue
    You’re making money on a regular basis—not just during the holidays or in bursts. Even $500–$1,000/month can signal a business in the making.

  2. Recurring Customers or Contracts
    You have repeat clients, service subscriptions, or steady demand. If customers are treating you like a business, it’s time you did too.

  3. Bigger Opportunities Are Coming Your Way
    A local shop wants to sell your products. Someone asks you to speak or teach. You’re invited to collaborate. These often require formal business documentation.

  4. You’re Making Financial Investments
    You’ve purchased tools, built a website, started tracking expenses, or accepted digital payments. If your side hustle already runs like a business, it’s time to protect and legitimize it.

Why Go Legit?

  • Legal Protection – Registering your business can help protect your personal assets.

  • Financial Clarity – Separating business and personal finances simplifies taxes, budgeting, and growth planning.

  • Professional Credibility – Clients and partners are more likely to take you seriously when your business is structured and branded.

  • Tax Benefits – Registered businesses can write off equipment, mileage, advertising, and even part of your home office.

  • Access to Funding – A formal business with good records can qualify for loans, lines of credit, and grants.

Step-by-Step: How to Make It Official

1. Choose Your Business Structure

Start by deciding how you’ll organize your business legally.

  • Sole Proprietorship – Easiest to set up. No separation between personal and business liability.

  • LLC (Limited Liability Company) – Protects personal assets, adds legitimacy. Ideal for most small or side businesses.

Helpful Resource:
Compare business structures – SBA.gov

2. Register Your Business

Check your state’s requirements. In Kansas, for example, you can register your business name and structure through the Secretary of State’s office.

Start Here:
Kansas Business Filing Center – sos.ks.gov

3. Get an EIN (Employer Identification Number)

This is like a Social Security Number for your business and is free through the IRS. You’ll need it for taxes, opening accounts, and hiring employees (even contractors in some cases).

Apply Here:
IRS EIN Application

4. Open a Business Bank Account

This is one of the most important (and often skipped) steps. Keeping business income and expenses separate simplifies taxes and strengthens your credibility.

What you’ll need:

  • Business registration docs

  • EIN

  • Personal ID

  • Business license (if applicable)

Find out about Envista Business Accounts:
Envista Commercial Services

5. Consider Business Insurance and Licensing

Depending on your services or product type, you may need:

  • A business license from your city or county

  • Liability insurance

  • Professional certifications or permits (especially for food or personal services)

Check with your local city or county government website for licensing requirements. In Topeka, for example:
City of Topeka Business Licensing

What About Taxes?

If you're earning more than $400/year in net profit from your side hustle, you're required to report it. With a business structure in place, you can track expenses and deduct qualified costs.

You may also need to file:

  • Self-employment taxes (Schedule C with your 1040)

  • Sales tax (if selling physical goods or services)

  • Estimated quarterly taxes

Helpful Resource:
Self-Employed Tax Center – IRS.gov

Let’s Get Started—Together

At Envista, we support small businesses from idea to expansion. Whether you need a flexible business account, tools to manage income, or just someone to help you plan your next step, we’re here.

Here is where we can help you right now: