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5 Expert tips to Start a Side Hustle and beat the cost of living

How To Start a Side Hustle and Beat the Cost of Living Crisis

In the UK, inflation is rising at its highest rate in 30 years, and it looks like it’s set to continue. With many people struggling to meet the rising costs of living, many are turning to side hustles (or side gigs) to make the extra money they need.

And, while no one should have to work multiple jobs just to make ends meet each month, side-gigging does present an opportunity for skilled professionals to earn extra cash — while honing their skills and building a professional network at the same time. 

The rise in freelance platforms and remote working opportunities means that it’s never been easier to make money online. With just a computer, you can create a profitable and sustainable side income to see you through lean times, and even pave the way to full-time freelancing.

In this article, we’ll explain how to start a side hustle that will help you to make money from home. We’ll talk through the practicalities of setting up as a sole trader, and share some tips to help you set yourself up for success when you get started — so you can start your side hustle with a bang, without burning out. 

First, a quick definition:

What is a side hustle?

A side hustle, (or side gig, side job, or side business) is any work that you’re getting paid for outside of your main job. This is a broad definition, which covers everything from hobbyists selling craft projects to full-time web designers using their time outside of work designing websites for their own clients. 

And side gigging is growing in popularity: in the UK alone, side gigs reportedly generate £72 billion for the UK economy each year, representing 3.6% of GDP. In the US, an MBO partners report found side-gigging is up 51% in the last 4 years.

There are side-giggers in almost every field, but some of the particularly high paying side hustles include software development, copywriting, data science, marketing, and accounting. 

If you’d like to supplement your income with a lucrative side gig, look at where your skills lie and think about how you could put them to use for clients to make money on the side. 

How to set up as a freelancer or start a side hustle

The easiest way for a new side-gigger to get started in the UK is to register as a sole trader. With this status, you can bill clients, and keep all of the profits from your business after you’ve paid tax on your income. 

Setting up as a sole trader is only required once you make £1,000 or more from self-employment in a tax year. However, the process is free and relatively simple, so it could be a good idea to register when you launch your business so you’re prepared for the future. 

To set up as a sole trader, you need to tell HMRC that you’ll pay taxes through self-assessment. You can do this by registering for self-assessment through the government’s online portal

You’ll need to:

  • Create a Government Gateway ID and password
  • Register for self-assessment online
  • Wait to receive your Unique Taxpayer Reference (UTR) by post

The government form linked above will take you through these steps automatically, allowing you to create a Government Gateway ID if you don’t already have one.

Do you need a business bank account? 

You don’t need to have a separate bank account for your business. However, separating your personal and professional finances can help avoid confusion. 

Built specifically for freelancers and side-giggers, a Mettle mobile business account gives you the tools you need to effectively manage your finances. 

With a free Mettle account, you can create invoices on the go, keep your books up to date with a host of bookkeeping features and connect to accounting software such as FreeAgent, Xero and Quickbooks.

When should you move to a limited company?

While most freelancers start out as sole traders, there may come a time when you want to set up a limited liability company (LLC). This might be when you have regular clients, or make the move to full-time freelancing. 

Although there’s no obligation to set up an LLC, the advantage is that your company will be a separate legal entity from you as an individual, so you can’t be held liable for any debts your business incurs. 

If you do decide to go down this route, you can easily set up an LLC on the gov.uk website. You’ll need to have a separate bank account for your business. Running an LLC also comes with a greater administrative burden than working as a sole trader, so it might be a good idea to start working with an accountant to make sure you have everything in line. 

You’ll also need to make sure your contracts are IR35-compliant, which means that you’re not working in a way that suggests you’re really an employee of your client. Working through a freelancer platform such as Gigged.AI can help you to make sure you’re compliant with the law. 

5 tips to get started as a successful side-gigger

The paperwork and administration of setting up as a side-gigger can seem overwhelming at first, but the process is relatively straightforward. 

What’s far more important is to develop habits, processes and techniques that set you up for success as a side-gigger — which requires commitment and hard work. 

Here are our top tips to get your side hustle started (and start making money):

  1. Manage your time and wellness

Many people who eventually transition to full-time freelancing start out as side-giggers, doing their freelance work alongside a full-time or part-time job. And since it can take a while to start making good money as a freelancer, this is a great way to keep some security while you get your business off the ground. 

Others have no desire to leave their full-time job, and simply enjoy the ability to make some extra money and take on exciting projects on the side. 

Either way, a word of warning: holding down a full-time job while taking on freelance work on the side requires a lot of time, energy, and effort. And it can easily lead to burnout if you’re not careful. When you start a side hustle, it’s even more important to make sure you get plenty of time outside and make time to do things you enjoy. 

Working hard (and earning extra income) is important, but side-giggers need to look after their mental health too. Life shouldn’t just be about work, and the best freelancers and side-giggers learn to work smarter instead of just working more.

  1. Set meaningful goals you can control 

As a side-gigger, setting and tracking goals is a great way to assess your business’ performance. However, many of the goals freelancers traditionally set are actually not very useful, because they focus on outcomes that are out of the freelancer’s control. 

For example, if you set a goal of earning £10,000 or gaining three new clients by a certain date, you’re likely to be disappointed if you don’t reach your targets. But realistically, these are not things you have control over. 

Instead, think about concrete goals that are within your control. For example:

  • Complete a course by a certain date
  • Send 100 outreach emails to potential clients
  • Send 50 LinkedIn connection requests to build your network

While it’s fine to have broader, more high-level goals related to things like income and the number of clients on your roster, it’s important to break these down into the steps you can take to achieve them.  

  1. Define your target clients (and how you’ll land them)

When you’re getting started as a side-gigger, it’s tempting to work with anyone and everyone who’ll pay you. After all, you need to get some testimonials and work samples under your belt — and create an extra source of income too. 

However, the most successful freelancers take time to nail down what their ideal client looks like, so they only do the work that’s best for them and their business. This is even more important when you’re a side-gigger, as you just don’t have the time to waste on unproductive professional relationships or projects that don’t pay enough. 

The best way to do this is to think about the industry your ideal client operates in, the number of employees they have, their level of revenue, and any other factors that make them perfect for you. Then, only reach out to clients who meet your criteria. 

Once you’ve determined who you’d like to work for, consider how you’ll approach them. For example, you could contact prospective clients by email or through LinkedIn, or even at in-person or online networking events. 

Whatever method you choose, be sure to make your initial reach-out personal, friendly, and professional. Most importantly, focus on how you can help them to achieve their goals, instead of how working for them can help you. 

  1. Determine your niche and USP

Whatever type of work you plan to do as a side-gigger, it’s a good idea to ‘niche down’. This could mean focusing on a particular type of work, or clients in a specific industry. By zoning in on this, you can more quickly become familiar with the common problems your clients face — and position yourself as an expert in your field. 

It’s also important to give some thought to your Unique Selling Proposition, or USP. This is a short statement that defines what makes you different from other freelancers in your field. If you’re struggling to come up with a USP, think about what you can offer to your clients that other freelancers can’t. Your USP might be based on:

  • Results from previous clients, e.g. 60% increase in sales
  • Unique features or skill combinations, e.g. freelance writer who’s also a graphic designer
  • Industry knowledge, e.g. freelance designer for health tech firms who’s worked in the industry for 15 years
  • Extreme specialisation: e.g. freelance accountant for fintech startups
  1. Be transparent

If you’re starting a side hustle alongside a full-time job, it’s important to be fully transparent with your company. Check your contract to make sure there’s nothing that will stop you taking on clients on the side. Depending on your relationship with your manager, you might also want to have a conversation with them about your new venture, and reassure them that it won’t take the focus off your day job. You never know — they may even be able to help you get started. 

That said, as long as there’s no obvious conflict of interest (such as working for your company’s direct competitors) and you don’t complete your freelance work on company time, there are rarely any problems to worry about. 

Another thing you might want to consider is whether you’ll disclose to your freelance clients that you also have a full-time job. Many new side-giggers worry that this will make them seem unprofessional or untrustworthy, but most clients prefer you to be honest. It could also help them to understand that you won’t be able to work on their projects during your workday and give you a bit of flexibility on deadlines. 

Starting out as a side-gigger? Don’t do it alone

If you’re just starting out as a side-gigger, there’s a lot to get your head around. You need to figure out your legal and fiscal responsibilities as a business owner. But you also need to develop processes for finding clients, staying productive and earning the extra cash you need. 

Thankfully, you don’t have to do it alone. Gigged.AI is a platform for talented freelancers to find work with innovative companies. You can get started straight away by creating a profile that showcases your skills. Then you can either search for projects, or let our smart AI do the work for you — you’ll be notified when a gig matching your skillset is posted. 

Gigged.AI can help you save time spent searching for clients, and use it to hone your skills instead — and our integrated payment system means you’ll always be paid on time. It’s also totally free to sign-up — we just take a 5% fee when you get work through the platform. 

Plus, if you need extra help and support on becoming a freelancer, you can join the Gigged.AI freelancer community, where side-giggers, newbies and seasoned freelancers alike get together to talk all things freelancing — sign up today to get your side-gigging journey started.

Aimee Mcpherson

Author Since: January 31, 2022