The term side hustle is very popular amongst Millennials and Gen Z, who are all too aware that their “day job” can end at any given moment. If you weren’t already on the side hustle train, 2020, the year of furlough, redundancy, and insecurity, might have you purchasing a ticket. (There has to be a pun about hindsight being 2020 here, right?)
A side hustle is an additional job, over and above your primary role. It could be anything. Some people sell things online, some walk dogs, and some flip furniture they find on the side of the road. A side hustle is another way to make some extra money. Some people use the income to reduce debt or for savings to reach short- and long-term goals. Other people may use their side hustle to fund their designer shoe obsession or a yearly holiday. The sky is the limit for side hustles.
A Henley Business School Study in 2018 showed that 25% of the UK population had a side hustle. It is safe to say that number has probably risen during 2020 and 2021. Who didn’t have friends who were becoming TikTok influencers or starting luxury soap businesses?
Not that anyone needs a reason to want to earn a little bit of extra money, but a side hustle is a great way to fund your goals. You can use them to support “wants” like holidays or family day outs or to cover “needs” like bills when money is tight. They are also fantastic for helping to pay down debts quicker and reach that lofty goal of buying your own home a little bit faster.
An additional benefit of a side hustle is that it can diversify your skillset and open new avenues of opportunity. People with side hustles can pivot a lot quicker when faced with adversity. They have additional transferable skills and may even have experience in another industry. Depending on the type of side hustle, they may even have the means to turn their side hustle into a full-time business.
In addition, if someone with a side hustle loses their job, they have a financial cushion as a contingency. Even someone earning an extra £100 from their side hustle will not eat into their savings as fast as someone who relies solely on their job.
So you’re keen to earn extra money? Well, skip the “10 Side Hustles to Start in the New Year” articles and videos. We all know they’re pushing surveys where you will be lucky to earn £5 for hours of your time. There will always be well-known side hustles like dog walking, childminding, or housesitting available, but if you want to take things further, you need to work out what you can do well.
When deciding what type of side hustle you want to start, you need to consider several things:
Do you notice we said, what can you do better than 70% of the population, not skills and expertise? A common mistake is thinking that skills and expertise mean you have to be educated in top universities and have worked in the field for 20 years. But knowing more than the average person makes you an expert.
Write down things you are good at, it might be excel spreadsheets, or you might make killer presentations with great graphics and cool transitions. You might be good at writing love letters. Jot down anything that comes to mind that you think you could do better than the average Joe.
Now that you have a list of things you can do consider what you might be able to monetise. Cross off any that you think you are unlikely to deliver sufficient income.
Now it’s time to consider your resources and market. Let’s say, for example, you are a qualified mechanic and want to purchase cars, fix them up, and flip them for a profit. This is a fantastic idea, not many people have the knowledge or skill set to do that, and you can make a nice profit. But it would help if you considered the upfront costs involved. You will likely have to fund the first car from your bank account directly. You will need to buy the car and the parts first before you see any profit. Therefore, you need to consider if you have the resources to pay upfront costs before starting.
It is also essential to consider the market you have access to. If you want to buy classic cars to fix up and sell to collectors, but you live in a town full of students, then you may need help finding the right market for what you are selling.
To begin with, we recommend picking a side hustle where you already have potential customers. Let’s say you are a whizz at excel spreadsheets, and everyone at work always asks you to fix their spreadsheets or make them prettier. You are also in a social media group or online forum about personal finances. Why don’t you start a side hustle making budget spreadsheets? You could offer a cost-effective spreadsheet template and a higher price for a bespoke creation. Your online community is a perfect audience, and you will likely have a few people who would take you up on your offer right out the gate.
Once you have picked your side hustle, it is time to get the wheels in motion. The first thing you need to do is make your side hustle official. You need to register for taxes. At first, it is best to register as a sole trader, but it is worth considering the different types of business entities and weighing up what works for you. A sole trader may be best if you plan to earn a little extra money, as you are only taxed once. It also removes some paperwork for registering with Customs House, for instance.
Depending on your business, there may be extra tasks, like reserving a domain, building a website, setting up an account with a payment processing service, or starting social media pages.
An easy trap to fall into when starting a side hustle is incorrectly calculating costs. The idea is to make money, not break even or lose money. Your time is money too, so if you are doing 3 hours of work and only making £10 from a sale, you are only making £3.33 per hour. Is your time worth that little? Generally, it is better to start off higher and adjust down than start off too low and raise your prices.
It is also crucial to consider how much time you want to dedicate to your side hustle. If you are starting a side hustle on top of a full-time job, you need to give yourself downtime and time to socialise with friends. Without that, you will burn out very quickly. Look at your schedule and work out a realistic calculation of how much time you can dedicate to your side hustle. Pick a side hustle that works for that time and stick to that timeframe. You may be able to work a couple of extra hours one week, but do not make overworking yourself a habit.
n a legal manner.
Keep up with our news, articles and latest developments!