Written by Emiley Phillips
Image by @Chloebbbb
46% of people in Britain have more than one source of income, aka a side hustle. Whether that be a small business, investing in stocks and shares, rental properties or just another part-time job to boost your overall income. Having more than one stream of income in today’s society is becoming the norm.
In theory, running aside hustle may seem straightforward. But in reality, it is the complete opposite. But, do not stress! If you follow these tips, you have much more chance of a successful, long-lasting, rewarding side hustle – one that can be extra income or even have the potential to transform into your primary income.
At IALH, we love to think big and watch you make it happen.
Cringey, I know. Everyone says that to run a successful business, you have to be passionate about it. But girl, take it from me. You do. I have invested thousands into starting businesses that I was not passionate about because I saw someone else doing it or calculating the money I could generate. I have invested in silk pillowcase businesses (I still have the stock in my Dad’s shed), clothing boutiques, and interior design studios, becoming a lash tech. You name it, I have thought about doing it. Nothing ever stuck because I wasn’t passionate about it.
But, how do you find your passion? Now, I will not claim to be a life coach or a careers advisor, I can only speak from my experience. I found my passion through a problem that boiled my blood. Women that are financially abused by men. Men that use finances as a weapon to control or manipulate women. I believe that if women were empowered and educated on their finances, that would lessen the ability to be used against them. This resonated through to my business model. What gives you that fire in your belly?
At IALH, we love to think big and watch you make it happen.
2. Passive Income
A business can sell two types of things—a product or service or, in some cases, both. Typically speaking, if you are offering a service, your business can not generate money without you. In contrast, a product is the opposite. Be realistic; how much spare time do you have to offer to this hustle?
Allow your side hustle to stay remote. Have the equipment you need, i.e., phone, laptop, headphones, to take it with you anywhere you go. You can never have an excuse or be held back by running your business remotely. For example, if your commute to work is 2 hours per day, then that’s 2 hours you can spend working on your side hustle. Remember, productivity is an ally in your journey here.
3. Time and Balance
Know yourself. What kind of person are you? Are you a morning person? A night owl? When are you most productive outside of work? It has taken me years of many slept through alarms for me to learn that I am most productive in the evening. If I set out to complete a task in the evening, I can blitz it. Whereas in the morning, it would take me double the time. We are all productive at different times.
Balance needs to be consistently worked at. The attention you need to pay to your personal and work life is forever changing. With me, my business needs more of my time when approaching the end of the tax year (now, the beginning of April!); therefore, I have to create a balance to suit that accordingly. Whereas my personal life will need more of my time when approaching festive seasons like Easter, Christmas or Birthdays. Be aware of what is coming up. Do not miss out on crucial personal life milestones because you are working on a task that isn’t due for another month. Or vice versa, if your business requires more time and you have to miss your 4th running brunch with the girls on Sunday, you do that. Prioritise your responsibilities and commitments.
4. Resilience and managing your expectations
It is very easy to set rigid goals, deadlines and expectations before starting your side hustle. Manage your expectations. Try not to put too much pressure on yourself. It can be hard to stay motivated if you are not reaching your goals, you can feel like you are putting everything in and getting nothing out. Review your expectations and ensure they are realistic and align with the current business environment. Of course, work towards the bigger picture. But have fun getting there.
Do not give up on something you’re genuinely passionate about. If you get knocked down, learn from it, then get back up and back to work. Rome was not built in a day – the same goes for your business. Be patient and make it happen. Whatever you put in will come out as a gain – monetary and otherwise in lessons, personal development, and life skills learnt.
Remember…perseverance = success (eventually).
Now I couldn’t possibly write an article about how to run a successful side hustle without addressing taxes. I promise to make this short and sweet, so here goes:
Turnover: The money that the business generates. If you were to sell 6 perfumes for £10.00 each, your turnover would be £60.00
Allowable Expenses: These are costs you need to purchase to keep your business running. These costs are tax-deductible. Let’s say you’re a lash technician. To lash your clients, you need to have your lashes, tape, and tweezers. These three costs are allowable expenses.
Profit: Turnover – Allowable Expenses = PROFIT!
If you own a clothing boutique and you sell a tracksuit for £30.00, but you brought it from your supplier for £12.00 and paid £4.00 to post it, your profit is £14.00 (£30.00- 16.00= £14.00). This £14.00 profit is the amount you would get taxed on.
Suppose your business’s turnover exceeds £1,000. In that case, you have to register as self-employed, and you must complete a self-assessment tax return. This self-assessment tells the taxman how much your business has made and what tax you owe as a result.
You have to do a self-assessment at the end of each tax year. The tax year differs from the standard year that runs from 01 January 22 to 31 December 22. Instead, HMRC likes to be awkward and run the tax year from 06 April 22 – to 05 April 23. Once the tax year is up, you can do your self-assessment stating your business’s turnover and allowable expenses for that particular period. You have until 31 January 24 to complete this self-assessment and pay any taxes due. Yes, you heard that right. The year ends 05 April, and you have 9 months and 26 days until the self-assessment is due. Think of it as pregnancy. If women can grow a whole baby within 9 months, then you can most definitely get on top of your finances during this time too.
If you’re employed via PAYE, you must enter your income and tax deducted from this job on this self-assessment tax return. These figures will be on your P45/P60 that your employer will give to you. Your side hustle income will get added to this and then taxed accordingly, depending on your tax bracket.
I hope you enjoyed reading this article. Put these tips to the test and watch your side hustle grow. Success is waiting for you!