What Do You Need To Consider When Starting A Side Hustle?

Side hustles are a common route for 1/3 of UK workers to earn extra income on top of their full-time jobs. The rising cots of living are proving to many that one job and salary may not be enough to sustain households, and so side hustles are the second option for these workers.

The TikTok hashtag #SideHustle has about 2.6 million posts so far and the number will grow, as side hustles are becoming normalised. On socials, people share ideas and advice on how side hustles can be both profitable and fun.

This being said, side hustles are not all just straightforward. There are quite a few things to think of before getting into a side hustle.
 

Hidden Costs And Insurance Needs

 
As much as side hustles are a good and viable idea, there may also be some extra costs to think about. With Airbnb for example, you might need public liability insurance to protect against accidents on your property. Other types of side hustles, like selling products online, may require business property insurance to cover your inventory and equipment against theft, fire, or vandalism.

As the insurance team at Bionic points out, “Public liability insurance will protect you against a third-party having an accident whilst at your property and deciding to claim. If you’re reliant on having guests for your income, coverage for loss of income could enable you to claim back some of the money you lose if a fire or a burst pipe means you can’t host guests.”
 

Popular Side Hustles And Their Requirements

 
Different side hustles have different needs and costs:

Renting Out a Space: TikToker @leenaxahmed shared her Airbnb journey, saying that she and her business partner saved £4-5k to start and were surprised by how many landlords agreed to sublet.

Selling and Reselling: Selling on eBay or Etsy for eg. can make you money. Business property insurance can protect your stock. Then there’s product liability insurance, and that is for when the products sold are capable of causing accidental harm due to it being hazardous to customers.

Pet Services: pet sitting or walking business are also good ones, and there was an 80% rise in searches for “how to start a pet sitting business” last year. Liability insurance can cover accidents or injuries that happen while you are responsible for the pet.

Freelancing: Popular freelance jobs are in marketing, design, and consulting. Professional liability insurance protects you in the case where a client claims that your work caused them financial loss.
 

Identifying Your Side Hustle Plan & Goals

 
Another important step before starting any venture is to identify your objectives. Ask yourself this:

• How much time do I have on my hands?
• What am I skilled and knowledgeable at?
• How many resources do I have currently, in relation to how many more I need to run the business operations?

 
The answers to these questions will help you decide if this is the way for you, and it’ll help you figure out exactly you will pursue. Once you have answered these and determined that this is the right move, you can start drafting a business plan.

A business plan usually has these:

• Brief description of the practice, service, and target market
• Business objectives
• Business structure (the type of business you want to own)
• Resources plan
• Financial plan
• Strategic plan (with your short-term and long-term goals as well as a SWOT analysis)
• Operational plan
• Client care plan (this is similar to your CRM strategy)
• Marketing plan

 

 

Create Your Business Model Canvas

 
Many modern businesses tend to move away from business plans and work with a business model canvas, especially in the early stages of business. This includes:

• Key Partners: Who are your key partners and suppliers? What key activities do partners perform?
• Key Activities: What uniquely strategic things does the business do to deliver its proposition?
• Value Proposition: What core problem or need are you solving for the customer?
• Customer Relationships: What type of relationship does each of your customer segments expect you to establish and maintain with them?
• Customer Segments: Who are your main customers? What are the different groups of customers you cater to?
• Key Resources: What assets are essential to offer and deliver the value proposition?
• Channels: Through which channels do your customers want to be reached? Which ones work best?
• Cost Structure: What are the main costs in your business model? Which key activities and resources are most expensive?
• Revenue Streams: How does the company make money? Which revenue streams contribute most to the overall revenues?

 

Work Policies At Full-Time Job

 
If you are working a full-time job, it’s important to have a look at your employment contract so that you understand what the terms are when it comes to working another job. Though many workers prefer not to disclose the information, it might be important to be on the safe side, as there will be times you may need to take time off of work. Maintaining transparency is important, to avoid any penalties at your full-time job.
 

New UK Tax Laws For Side Hustles

 
As of 1 January this year, the UK introduced new tax laws affecting those with side hustles, selling through online platforms like Etsy, Vinted, and eBay. These digital marketplaces must report sellers’ earnings to HMRC if their transactions exceed a certain amount.

Specifically, sellers with fewer than 30 sales and earnings under £1,000 annually won’t be reported, benefiting from a £1,000 trading allowance. This change aims to enhance HMRC’s monitoring of side incomes and clamp down on undeclared earnings, aligning with a global agreement for data sharing among tax officials.

Those who earn over this amount from their side hustles must register as self-employed and file a self-assessment tax return. This way, while attracting media attention, mainly moves the reporting responsibility to online platforms without changing existing tax rates or payment deadlines.
 

Research, Research, Research!

 
Finally, research is an important aspect at any given point of your business development process. In the beginning stages especially, understanding your industry as well as its consumer needs and behaviours is key, so that you know where you stand. It’s also a good way to test how viable your idea is.