10 Things You Should Consider Before Starting Your Own Side Business

Starting your own business is an attractive venture for many people, and is becoming increasingly popular as shown by a study completed by the Henley Business School. They found that 1 in 4 adults in the UK now has their own “side hustle”. Whether you’re considering starting your own side business either because of necessity from wanting to increase your income and earnings or from a passionate hobby that you think you could take further, you should give these 10 factors careful thought before diving straight in:

1. Do you have the time?

This is perhaps the very first question anyone should ask themselves before starting a side business. Running a business (no matter how small) will take considerable time and can be demanding. Not only that, but, when taking into account that a significant part of your day will be spent at your main employment, it will not leave much spare time for most people. You should not only think about whether you have the time to carry out your side business but whether you will have time to do all the necessary administrative tasks that go alongside it – such as setting up the side business, answering queries and complaints, and marketing.

2. Do you have the financial means?

10 things you need to consider before starting your own side business

Another serious point to bear in mind is whether you have the spare funds to run a side business. There are always ways to save on costs when you’re just starting out, but it will nevertheless still require investment. This can range from buying a website domain and hosting it, buying supplies you need if you are selling products, shipping costs if you are sending out products, or even possibly higher utility bills. You should also consider any financial impact it may have on you if a customer would like a refund or a client doesn’t pay their invoice.

3. Does your employment contract allow for you to take on a second job?

This is a point that most people often forget to check. You should review your employment contract for any clauses which may restrict you from taking on a second job. Often this type of clause will arise as an employer would not want you to also work for a competitor or set up your own business in which you could take their clients. However, there is also the Working Time Directive in which employers are responsible for ensuring employees work no more than 48 hours a week. This limit applies to all employments. If you exceed this, you will need to sign an opt-out agreement.

4. Do you know what’s involved in running your own business?

There are various legal obligations that you will need to comply with when running your own business. The first and foremost being paying your taxes! Make sure you understand how to take on your bookkeeping so that you’ll be able to complete your self-assessment tax return. Not only that, but did you know that you need to register as self-employed with HMRC also? If you decide to set up your own business as a limited company, there will also be obligations to fulfil with Companies House. Take time or expert advice to decide how best to structure your business, and then be sure to keep in mind what your legal obligations are as well as their deadlines.

5. Are there other things you need to prioritise first?

Once you’ve started your own business, it becomes an ongoing responsibility. It’s not something that can be easily paused and restarted at a whim. An important consideration before launching a business is therefore to assess whether it’s compatible with your current lifestyle, any existing commitments you may have, and immediate goals you are aiming for. Significant transitional events in your life such as starting a family, moving home, or completing adult/professional study may therefore be more important to focus on first.

6. How successful do you want to be?

You’ll be able to get the most sense of fulfilment from running your own side business if you have in mind how far you want to be able to take it. You may be satisfied with selling a few homemade pieces to customers who appreciate your skill or talent, or you may be looking to start a serious enterprise which you can eventually turn to full-time.  Whichever it may be, setting up a business without having a goal in mind is almost certain to fail and so think about how you would like to see your business go in the first year at least.

7. Are you able to accept failure?

Conversely, it would be prudent to acknowledge the real potential of business failure. 20% of businesses fail in their first year and this likelihood increases to 60% of businesses in their first 3 years. It is therefore wise to mentally prepare for this possibility, as well as assess what you may be putting at risk if you are determined to go ahead. Perhaps you plan to use some savings you’ve put aside to start this side business. If that’s the case, then you may want to ensure you keep a reserve so that, if the business does not work out, you’ll not fall into financial hardship.

8. Will you need help?

If you’re starting your own business for the first time, then it’s not unusual that you may need help. Be prepared to pay for professional services such as legal fees or accountancy fees (these are not the areas to be too thrifty on as it could end up costing you in the future). If you plan to enlist friends and family, will you be able to consistently rely on them. If not, then it may mean hiring people to help – in which case you’ll need to set up a payroll system.

9. Will enough people want your product or service? ` 

To have a business, you’ll need to find people who will want your products or services. This is where market research comes in, and we recommend doing this before starting your side venture. It’s crucial to understand whether you’ll be entering a saturated market where you’ll have to work hard to stand out from the crowd. Or maybe you’ve created an entirely new and innovative product/service which you’ll have to educate customers about so that they can see the value. Either way, you’ll want to establish whether there is demand for your business in order to be successful.

10. Will a side business bring you joy?

Starting your own business can be incredibly challenging. It can be difficult to switch off and stressful when you’re solely responsible for its success. However, running a side business can also be an incredibly rewarding and satisfying experience. It can be an outlet for your entrepreneurial aspirations and empower you to do something you love for a living. So the last point you should think about before deciding whether or not to start a side business is whether you’ll gain more from doing it or whether it’ll simply take away from your time, energy and other priorities.