We are well and truly in the age of the great side hustle. It seems like every man and his dog has an Etsy store on the side, or dabbles in a bit of freelancing. It’s a great way to boost your income and make a bit of extra cash before payday.
But what about when your side hustle grows, or your priorities change in favour of it? Some people are happy to keep them as side hustles, but others may decide to turn them into fully-fledged businesses. If you’re in the latter category, this post is for you.
Build an emergency fund
If this is a case of quitting your job, you need a financial safety blanket because it’s a high-risk move. An emergency fund can cover you if work is slow and your income isn’t consistent – this is common when starting out.
We wouldn’t recommend quitting your job as soon as you start making some cash on the side. Wait until you have a financial safety blanket first. Being prepared with careful planning is key to success.
Get the legal stuff covered
If you haven’t yet started to think about tax, it’s never too early and it’s vital you prepare for it. Currently, there is a Trading Allowance that allows you to earn up to £1,000 before you need to pay any tax. This is handy for those starting out or for those with side ventures.
However, when your business grows, so does your income. This is when you need to start thinking about tax, bookkeeping and Self Assessment. The sooner you get your legal obligations and tax sorted, the better.
If you’re unsure about how to do any of this, then don’t be afraid to get help from an accountant who can guide you through it.
Don’t burn bridges, keep contacts
When you make your way from work to self-employment, don’t underestimate the value of keeping in contact with old colleagues and bosses.
You never know when they could require your services, or you theirs. They might have contacts themselves who can help you build your client list.
Set a routine
Whether you decide to work from home, a co-working space or coffee shops, it’s important to keep some sort of routine. You may have been very productive in building your business alongside your job, but things are very different when you go full-time self-employed.
When you first go self-employed full-time, there’s a novelty period where you enjoy the ability to do what you want, when you want. However, this isn’t great for productivity and it isn’t sustainable. The sooner you get systems and routines in place and good habits formed, the better.
Don’t be afraid to invest
The good thing about side hustles is that many of them are fairly cheap to set up and run. However, if you want this to become your sole income and a solid business, you might have to bite the bullet and start investing.
This could include investing in an accountant, getting some marketing help, website costs, advertising or even some educational courses to further develop your skills.
It might feel difficult to part with your cash at first, especially when you’re used to cheap running costs. However, if these investments end up growing your business or freeing up your time – allowing yourself to grow more effectively – they’ll be well worth the investment.
Have you recently made the leap to full-time self-employment? What has been your biggest challenge so far? Leave us a comment below.