Dosh dilemma: Natalie’s side hustle gamble

For the past three years, Natalie has spent her evenings and weekends building a cake business.

What started as a hobby has turned into something much bigger. She has a growing list of regular customers, glowing reviews and weekends booked up with birthday cakes, weddings and celebrations.

Natalie wants to leave her secure full-time job and focus on her business full-time. She has six months' worth of savings to fall back on, but there's one problem.

She has no guarantee the orders will keep coming.

Her family thinks she's brave for chasing her dream. Some friends think she'd be mad to give up a steady salary, especially with the cost of living still high.

Natalie wants to know, should she take the leap, or play it safe?

Well Natalie, starting your own business can be incredibly rewarding, but it's not without financial risks. Before handing in your notice, it's worth taking a step back and looking at the bigger picture.

Ask yourself a few honest questions.

Is your business already making enough money?

It's easy to focus on sales, but what really matters is profit. Once you've paid for ingredients, packaging, equipment, fuel, insurance and tax, how much are you actually left with?

And, could your business cope if things slowed down?

Many small businesses have busy and quiet periods. Think about whether you could still cover your bills if orders dropped for a couple of months.

You’ve got six months' worth of savings, but it is enough?

Having money set aside is a great start, but what would happen if your business took longer than expected to grow. Would you have a backup plan if your savings started running out?

Don't just think about household bills. You'll also need to budget for things like business insurance, equipment, marketing and putting money aside for your tax bill.

But remember, you don't have to choose all or nothing.

Many people think they have to either stay in their job or quit completely, but there could be another option.

Could you reduce your hours at work while building the business? Or would taking unpaid leave or asking for flexible working be viable? Such scenarios would give you more time to grow your customer base while still bringing in a regular income.

It might not be as exciting as handing in your notice tomorrow, but it could make the transition much less stressful.

Think about more than the money

Running your own business often means more freedom, but it can also mean longer days and less certainty.

Ask yourself whether you're comfortable with that.

If you enjoy the challenge, don't mind wearing lots of different hats and can cope with income going up and down, being your own boss could be a fantastic fit.

If the uncertainty would keep you awake at night, there's nothing wrong with waiting until you feel more financially secure.

Following your dream doesn't have to mean throwing caution to the wind.

If your business is growing steadily, you've built up a healthy emergency fund and you've thought through the risks, taking the leap could be the right move.

But if you're relying on hope rather than a solid plan, it may be worth giving yourself a little more time to build your business before walking away from a guaranteed pay cheque.

Sometimes the smartest leap is the one you've prepared for.