As the cost of living crisis escalates, lots of us are finding that our monthly wages aren’t going quite as far as they used to, eaten up by huge gas bills, eye-watering grocery costs and let’s not even think about how much you have to pay at the petrol pumps these days. So there’s never been a better time to work on your side hustle.
But what is a side hustle?
Put simply, it’s a piece of work or a job that you get paid for in addition to doing your main job and there’s increasing numbers of us who are topping up our salaries with a side gig and wondering just how to turn it into a business and live the dream of being our own boss.
According to a study by website hosting platform GoDaddy and the University of Kent, a third of all businesses with fewer than ten employees are run as a side hustle, compared to just 20% in March 2020, showing just what an impact the pandemic and remote/hybrid working have had.
With more time on our hands because we’ve not been commuting as much, it’s given us the chance to take on these side jobs, and the statistics show that small business owners are getting younger as a result. The number of entrepreneurs under 35 has gone up from 26.4% to 34% while the number of under-24s has gone from 1.7% to 8.6%.
There’s plenty of reasons why you should start a side hustle, whether it’s to cover the soaring costs of living or to help put money aside for a car, a house or a holiday. And those are just the economic reasons. A side hustle can often start off as a passion project or a way to do the kind of work you’re not able to do in your main job, giving you the fulfilment you were lacking before.
You may be wondering: ‘What side hustle can I do?’ The great thing is that there’s something for everyone, from being a dog walker to hosting an Airbnb, but if you have experience in digital marketing or content writing, you can find clients from around the world online and fit the extra work in around your day job.
But what happens when you decide that your future actually lies in that kind of work rather than what you’re currently doing? How do you turn a side hustle into a business of your own? Of course, it’s a big step with lots to consider.
Sole trader or limited company?
One of the biggest questions is whether you want to be a sole trader or limited company. Taking a side hustle into the business world means having to make decisions like this, but what do these terms even mean?
A sole trader means that it’s just you, which is fine when you’re working from your kitchen table or filling in surveys online while watching Love Island. But if you’re looking to grow a business from your side hustle, you may need to consider creating a limited company where the ownership is split into equal shares, taking the sole financial liability away from you.
What are the other benefits of a limited company/sole trader? Setting up a limited company means that you’ll be able to pay yourself in a combination of salary and dividends, meaning you’ll be likely to be paying lower taxes, but the flipside of this is there may be more difficult and time-consuming admin and financial requirements to deal with if you go down this route. Plus, being a sole trader means all of the profits are yours and don’t need to be shared.
There’s clearly advantages and disadvantages to each route, so your personal circumstances and aspirations for your side hustle might decide which you go with. You may also want to check out exactly how to set up a limited company, which includes choosing directors, a company secretary, deciding who will be the shareholders or guarantors and preparing a lot of documentation.
Network, network, network
When you’ve made your decision, there’s plenty of work still needed to take your side hustle mainstream. Networking is absolutely key, even if the thought of it brings you out in hives. You need clients and the best way to find them is to go to where they are meeting and talk to them, so network, network, network! Find out where your potential clients might be hanging out online and integrate yourself into those online communities on Facebook, Twitter and LinkedIn. Get some business cards printed so you never miss a networking opportunity.
You also need to help your clients to find you, so other top things to consider about turning your side hustle into a business include creating a website to showcase your services and skills and use social media to spread the word about what you can do. Ideally, you need to be combining them by writing a blog, or creating vlogs, that you can use as social content to entice clients in to find out more about you. Create a presence on Instagram, Twitter and Linkedin and join any relevant Facebook groups or communities.
If you hadn’t already realised it, there’s a lot of work involved in turning your side hustle into your business, both in terms of the admin side and the self promotion. We can help take some of that work off your hands if you join us as a freelancer, working on diverse projects with our clients, so why not get in touch today?