Side business, side hustle, side gig, call them what you want, they’re a growing part of many workers’ lives. Henley Business School estimates that 1 in 4 UK employees are running some form of side business from flower arranging to freelance web design, and over half of these small enterprises have been formed in the last two years. This approach to work is most common among those aged 25-34 so it’s often seen as a millennial approach, but working multiple jobs is nothing new it’s just the style of work that’s changed. In the past taking on another part-time job was the answer to boosting income (and still is for many, see this recent article from the BBC) but, as shown by the rising level of self-employment in general, many modern workers don’t want to have a boss breathing down their neck, let alone two or more! It’s, for this reason, starting a small business alongside working a typical 9-5 works for these ambitious entrepreneurs.
Those running side businesses bring in an average of 20% of their overall income from these projects, not an insignificant amount but also not enough to pack in the day job just yet. KPMG estimates that 1 in every 5 workers aged 25-34 spends 60% of their wage the day it’s received! That’s more than double those aged over 55 so it would be a reasonable presumption that these poor millennials are spending so much on rent and avocado lattes (remember them?) that they’re forced into finding additional income. But that doesn’t explain the prevalence of workers happily running unprofitable side businesses, so there must be other driving forces.
Purpose is a major draw for millennial workers when looking for a job and if this isn’t being achieved in their ‘main’ job they will look elsewhere to satisfy their needs. Just look at the 6,250 police volunteers offering 500,000 hours of unpaid service last year to UK police forces. Many small businesses start from a cause and work to give something back to communities whether local, national or globally. Often these businesses aren’t focused on profit-maximising so won’t generate the income to support living in 2019.
Even if the project isn’t going to feed the world, it might just be an interest that you would like to pursue. Some interests can be difficult to turn into a full-time job and some you might not want to (fishing on a weekend is very different from working on a trawler ship) so a side business can be a great opportunity to pursue these interests without the pressure of generating enough money to live on.
If you do hope to turn a passion into a viable business, testing out a new idea is another great reason to launch a side business. By keeping up the day job you’re minimising the risk (and may be able to afford losses in the short term), giving you the space to experiment, review and rework practices before taking the leap into full-time self-employment.
There are however associated dangers with running a side business whilst also being in full-time employment. Research by CIPHR suggests 62% of those with a side business will work on it during office hours and, from a time-management perspective, the lines can often become blurred between your many responsibilities. Finding work-life balance can be difficult enough with one job so it’s vital to schedule your days, giving yourself time for all your responsibilities (especially if you want to keep hold of your main job!). Having too many responsibilities, no matter how much you enjoy your side business, can impact your work, strain relationships and cause you stress.
Another major drawback for many is the accounting side of the business. The accounting that comes with running a business of any size can be daunting, especially to those used to the reliable world of permanent employment. Worryingly, the poll by CIPHR also found that 46% of those running side businesses weren’t declaring their additional income to HMRC! Some might be purposefully avoiding taxes but we fear many will simply not know what or how to pay. It’s therefore vital that you get professional advice on running your side business to ensure you’re operating compliantly.
Don’t forget, ICS offer an all-inclusive limited company service for a fixed monthly cost, saving you stress and leaving you time to run your business. Call us today on 0800 195 3750 or email firstname.lastname@example.org to see how we can help you grow your next venture!