In 2017, Courtney Lynn Ottrix started blogging about things to do in Cleveland. She'd done some freelancing in the past, and the blog offered occasional opportunities for income.

But two years later, when her full-time position was eliminated, Ottrix suddenly found herself self-employed.

"I had started to see what could be of my business if I gave it my all," Ottrix said. "And literally overnight, Courtney Covers Cleveland went from a blog to next level."

Whether you're pushed into it like Ottrix or have time to make a plan, following these steps can help you transition your business from a side hustle to self-employment.

1. Separate your business and personal finances

Ottrix started her self-employment by working as an independent contractor. But as she began working with larger brands and bringing in more revenue, she chose a business structure, filed for an employer identification number and opened a business bank account.

Separating your business and personal finances is a key step on the way to formalizing your business, said Keith Hall, president and CEO of the National Association for the Self-Employed.

"Start to visualize and treat the business like a business. It's separate from your personal stuff," Hall said, adding you need to make an "unwritten commitment to never mix the two."

Creating a business entity and filing for an EIN is necessary before you can apply for grants and loans or make wholesale purchases, added Lewis Weil, founder of Austin, Texas-based financial planning company Money Positive.

2. Start bookkeeping

At a minimum, keep a spreadsheet listing your revenue and expenses so you can see whether you're making money, Weil said.

Business owners "grow to enjoy looking at their numbers," Weil said. "It's really nice to be able to just push a button and be like, 'Ah, I made money this quarter.'"

As your business gets more complex, Weil recommends starting relationships with a bookkeeper and certified public accountant.

Ottrix recently began working with an accountant who uses accounting software, which has helped her develop a better understanding of her different income streams.

"Everyone thinks they have to do everything by themselves," Ottrix said. "No, you hire help. The most successful people build really, really good teams."

3. Formalize your business plan

If you're already freelancing, you probably have a good sense of how much you can earn per item or per client, Hall said. But you may not have a formal business plan that translates those numbers into enough money to make a living.

"If your family needs you to make $100,000 — How many clients is that? How many engagements is that? How many rocking chairs is that?" Hall said. "That business plan is your map."

Weil recommends new business owners aim to pay themselves twice as much as they need for monthly obligations such as rent or mortgage payments, food and utilities. On top of that, you'll need enough revenue to cover business expenses and taxes. About 30% of your revenue after expenses should be set aside for quarterly tax payments, Weil said.

4. Prepare your personal finances

Some entrepreneurs, such as Ottrix, become self-employed out of necessity. But if you have time to plan for a transition, prepare your personal finances by building up your personal emergency fund and paying down high-interest debt, such as credit cards. If you get health insurance from your employer, research the cost of COBRA or a health insurance marketplace plan.

If you're earning money from a side business, Weil recommends letting it pile up in your business bank account. He encourages saving enough to pay yourself for three to six months before relying solely on your business for your income.

"Take care of the basics in a very conservative way so you can take the big risks," Weil said.

5. Jump in

The final step, Hall said, is to "let go of the side of the pool" — whether you climbed in by choice or were pushed in by circumstances — and start swimming.

It's easy to feel like you're in the deep end, especially when what once fit into evenings and weekends is now a necessity to generate income.

"The reality is that every day as an entrepreneur is not glitter and gold," Ottrix said. "Like, yes, I work for myself, but I do a lot of work."

In those instances, remember the "self" in "self-employment." Measure success against your business plan — not your peers' — and embrace the fact you're in charge of your own destiny.

"I didn't wake up and say, 'I wanted to always start my own business,' but here we are," Ottrix said. "And I could never see myself going back to anything else."

This article was provided to The Associated Press by the personal finance website NerdWallet. Rosalie Murphy is a writer at NerdWallet. Email: rmurphy@nerdwallet.com.

RELATED LINKS:

NerdWallet: Business Structure: How to Choose the Right One https://bit.ly/nerdwallet-business-structure

The National Association for the Self-Employed https://www.nase.org