While finding the right idea and building on your existing expertise is important, it’s essential to also focus on other questions, ones that are often overlooked.
Joe Phelan, money.co.uk business accounts expert, says:
“With digital platforms making it easier to launch and market yourself, starting a side hustle can feel simple; just pick an idea, make a few social posts, and get going. But many of the trickier (and more important) considerations only become clear once you’ve already started.
Before starting, get to grips with these six often-overlooked realities:
1. Consider how many hours a week you can comfortably set aside.
Side hustles often sound easy: do what you love, earn a bit of extra cash, and be your own boss, all in your spare time. In reality, they often require more energy and consistency than you might expect.
Before you begin, it’s worth thinking practically about how this will fit into your life. Ask yourself:
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How much time should I dedicate to my business?
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Will it eat into rest, family time, or my performance at work?
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What (if anything) will I need to sacrifice to make space?
Try tracking your time for a week or two beforehand, as you may discover you have more spare capacity than you realised, or that you need to be more intentional with how you spend it.
Create a weekly plan and block out dedicated hours to focus on your side hustle, so it becomes a manageable habit, not a last-minute scramble.
2. How can I build a long-term strategy and identity for my brand?
Even if your side hustle is small (which it inevitably will be at the start), it’ll benefit from having a consistent identity. Whether you’re offering tutoring services or making jewellery, a simple, coherent brand helps build trust, especially online.
It doesn’t have to be fancy. But it should feel deliberate. Think about:
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Securing a domain name (even if you’re not ready for a website)
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Using the same name, logo and tone across social media and online listings
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Whether your side hustle aligns with your personal reputation, especially if you’re in a public-facing role
A clear brand can help you look professional, and can also make you focus your offer and target the right customers.
3. Don’t forget about tax implications.
One of the most common mistakes new side hustlers make is forgetting that even small earnings count as taxable income.
Some key things to know:
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You need to register as a sole trader with HMRC if you earn more than £1,000 in a tax year from self-employment
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Keep records of all income and expenses from the start. Receipts, invoices, mileage, and software subscriptions can often be claimed as allowable expenses, but what counts can vary, so it’s important to check with an accountant or qualified tax adviser
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You’ll need to submit a Self Assessment tax return each year
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You may also need to set aside money to cover your tax bill, and possibly National Insurance contributions
Speaking to an accountant or using accounting software can help you stay on the right side of HMRC.
4. Easily monitor your income and expenses.
If you’re a sole trader, you’re not legally required to open a separate business bank account. But, practically speaking, it’s generally a good idea.
That’s because separating your business finances from your personal ones makes everything easier, especially at tax time.
Benefits include:
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Cleaner, simpler record-keeping
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Easier expense tracking
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A more professional impression when dealing with customers or clients
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Access to features like invoicing tools, analytics, and cashback on business spending
Many banks now offer low-fee or even free business accounts tailored to freelancers and side hustlers, so it’s worth exploring your options.
5. What’s my plan for scaling (or not)?
Not every side hustle needs to turn into a full-time business. But having clarity on what success looks like for you will help guide your decisions.
Ask yourself:
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Am I doing this for a bit of extra money, or do I want it to become my main job?
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What happens if demand suddenly increases?
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How will I decide what to say yes or no to?
Even if you’re not planning to scale right now, setting boundaries can help protect your time, avoid burnout, and keep your side hustle enjoyable rather than overwhelming.
6. Do I even need legal and insurance protection for my small business?
It’s tempting to think that if your side hustle is small, you don’t need to worry about legal or insurance issues. But that’s not always the case.
Depending on what you’re offering, you may need to consider:
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Product liability insurance: If you sell physical goods, especially food, cosmetics, or items for children
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Professional indemnity insurance: If you’re offering advice, coaching, or consultancy
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Goods in transit insurance: If you’re regularly sending products through the post or via courier, this can protect you against loss, theft or damage during delivery
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GDPR compliance: If you collect or store customer data
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Copyright and trademarks: If you’re creating or using original content, brand names, or designs
Chatting with a business insurance provider, or a legal adviser can help you understand the risks and protect your business from the start.
The bottom line
A side hustle can be exciting, empowering, and financially rewarding. But, if you’re considering starting one, you need to think beyond the idea itself. By planning ahead for the practical side of running a small business, you’ll be in a far better position to build something sustainable.”