Over the past few years, ‘side hustles’ have become increasingly popular in the UK. With advances in technology and social changes in the wake of the COVID-19 pandemic, it’s never been easier or more socially acceptable to generate a second source of income and flex your creative muscles while you’re at it.
However, how do you go about starting your own side hustle?
In this guide, we take a deep dive into side hustles. We explain exactly what these small businesses look like, before outlining a number of basic initial steps you will have to take in order to succeed.
Put simply, a side hustle is a business or job that an individual carries out to make additional money on top of their primary source of income. Although second jobs with third party employers or freelance work could be classed as side hustles, more often than not, this term refers directly to a self-owned small business an individual is running on ‘the side’ of their regular job. For example, you may sell handmade greetings cards on Etsy or make and sell homemade baked goods outside of your primary 9-5 office job
Of course, as well as providing a way of earning a little extra cash, side hustles also allow you to indulge a creative passion. Whether you’re turning a long-standing hobby into a small business or trying your hand at something new to supplement your income, there are a whole range of benefits to side hustles apart from financial gain. And remember – if your side hustle becomes successful enough, it could become profitable enough to become a full-time business, generating your entire income.
As long as you have an idea and are prepared to put in the hard work, anyone can start a side hustle. However, getting your enterprise off the ground and turning it into a success can be tricky. To help you get your side hustle off on the right foot, follow the framework we outline below. This will ensure, whatever your idea is, you have the best work/life balance, legal status, and insurance policies in place to operate legitimately and successfully.
In order to make a side hustle work, you need to first identify a business idea that you will enjoy working on. This is crucial. After all, if you are not passionate about your idea, what’s going to keep you motivated? With this in mind, the best way to identify a side hustle opportunity is to start by thinking about your own hobbies and interests.
Once you’ve come up with an area of interest, you simply need to think about how this can be applied to a profitable business concept. For example, if you enjoy baking, think about how this can be scaled up into your own small business, or if you are a talented writer, think about how you can join the gig economy by starting a side hustle as a freelance copywriter.
Working on two different fronts can be really tricky, especially if you also have a busy personal/family life to contend with. For this reason, before taking the plunge and starting a side hustle, it’s crucial to review your current circumstances.
Start by thinking about how much time you spend at your primary work each week. Next, think about the additional time you need to ringfence for family time, housekeeping, and socialising. If, once all of this time has been accounted for, you are not left with enough to give your side hustle the time it needs to thrive, now might not be the best time to give it a go. Remember – if the effort of launching and running a side hustle is going to negatively impact other aspects of your life, it may not be suitable for you. However if your goal is to eventually make your side hustle your main source of income, the short term sacrifice can be worthwhile in the long run.
If you decide you do have the time to make your side project a success, it’s still important to set strict personal boundaries. Establishing personal rules that help to evenly split the time available to you makes maintaining a healthy work-life balance more possible. This means you can set goals and stay motivated without other important aspects of your life suffering as a result of your new venture.
As your side hustle will (ideally) be generating a second income, it’s a legal requirement for this business to be officially registered. This ensures your side business remains fully compliant when it comes to taxes and liability. However, it’s important to really think about what type of business you want to start before making a final decision.
While it’s common for most side hustles to start as a sole trader/partnership, before becoming a limited company as the business starts to grow, there is nothing stopping you registering as a limited company from the get go. The key difference between the two comes down to liability. If you’re a sole trader, you run your business on your own and are 100% financially liable for the business. On the other hand, the personal finances of owners are better protected when a business is registered as a limited company. However, this comes at the expense of privacy when it comes to business accounts, as well as a more complex and expensive set up procedure.
As a rule, you are not legally obliged to hold any insurance policies to run a side hustle (as long as you do not have any employees). Despite this, it is sensible to purchase small business insurance. This is because, regardless of what products you sell or services you provide through your side hustle, if a claim is made against you, public and product liability insurance and professional indemnity insurance policies could safeguard your business from financial ruin.
Here at Caunce O’Hara, we offer a range of bespoke insurance policies designed for freelancers and side hustlers. No matter what your speciality – from photography to tutoring – we provide tailor made business insurance packages for all side hustles.
Protects against claims of alleged negligence in your professional services, advice and designs.
Protects against claims of injury to third-parties or damage to a third-party's property.