What you need to know about starting a business while employed at your day job

Against the backdrop of the cost of living crisis, online searches in the UK for ‘side hustle’ have grown by 58% in the past year. In fact, as reported in CityAM, a recent study found that 10 million Brits are considering taking on a second or even a third job to make ends meet (while 5 million have done it already).

Darren Fell, CEO and Founder at online tax and accountancy platform, Crunch, said: “We’ve all seen those case studies in the news where someone has thrown in their day job to pursue their side hustles full time, and while it’s certainly possible for some, leaping from permanent employment to focus purely on your own business ventures isn’t always viable. The reliable income from a 9-5 is something that only a few can spare to ditch, especially amid the cost of living crisis, but the extra income and sense of fulfilment that can come from pursuing a side hustle or small business idea are nonetheless attractive. With this in mind, we have put together our tips for setting up a small business while remaining employed at your day job for anyone seeking the best of both worlds.”

Check your employment contract – thoroughlyBe sure to read through your current employment contract with a fine-tooth comb before you make any moves towards starting your own business at the same time. This is because there may be contractually binding clauses that set out whether or not you can pursue your own business during your tenure as an employee – even if you’re doing so outside of your normal working hours.
There may also be clauses or policies in there that state what amounts to a conflict of interest. The last thing you want is to risk termination by inadvertently (or even deliberately) breaching your contract – so give it a thorough read-through, and raise any questions or grey areas with your HR department.
Be aware of your employment rights and benefits – they could transform your ability to take on a side hustle or start a business of your own.Working two jobs can be very challenging and, unless you set boundaries, it can cause a whole host of problematic consequences.
If you overwork, both endeavours will suffer. If you devote too much time and energy to one, the other will be stunted. It’s challenging to juggle both, but thankfully there are a few options to help you strike the balance.

Firstly, you have the right to request flexible working from your employer – in fact, since 2014, this right was extended to all employees, rather than only those with family commitments. That said, remember you only have the right to request it; your employer is within their rights to deny your request if they have a legitimate reason.

Secondly, you could propose working part-time, a reduction in your contracted hours, or even suggest working on a job share basis, especially if there’s someone else in the business who has the same intentions as you. Neither of these things hurt to ask if you feel that you’re working yourself too hard in your pursuit of a second self-employed job.

The third, and probably most common, option, is to manage your time very carefully, while staying aware of the impact on your wellbeing and productivity. The trick is to find a balance that works for you. Maybe you can devote one weekend a month to your new business, or maybe weekday evenings. Make sure you have downtime to spend with family and rest.
Get organised

If the third option above is your most likely route to starting a side hustle or business of your own, you’ll want to structure your to enhance your productivity. Set realistic goals and stick to them; a good example would be to look at what you want to achieve over a 30-, 60-, or 90-day period, and construct a week-by-week checklist of what you need to do to get to those milestones. There are many Apps that can help you with this, like Todoist, Trello, Scrivener, Goals on Track, Toodledo and ATracker to name just a few.
Be respectful

While your side venture may be new and exciting (possibly more so than your day job), remember that you’re still employed and need to be respectful. Don’t waste company time working on your business idea – this could harm your reputation and burn bridges you might regret later on. If you do decide to focus on your own thing full time, try to leave your day job on good terms – you’ll thank yourself for doing this if you ever need to call on your former boss or colleagues for support.
Don’t shy away from networking

There are many resources to help support you whilst you consider or plan to start your own business – these range from funding and grants to crowdfunding, or if you’ve got a few flush friends, peer-to-peer lending. Networking is your best friend, no matter what stage your business is at, so don’t shy away from local events. Your city’s Chamber of Commerce is a good place to start for this, as well as conferences, Slack and Discord communities specific to your industry.
Tell HMRC

If you’re starting your own business, as either a sole trader or limited company, you’ll need to let HMRC know. This is so you can file your Self Assessment on time and pay the correct tax on your income. It is a legal requirement to inform HMRC once you start earning from your business. Don’t create any additional worry or concern for yourself by not having your taxes organised. Crunch has a useful article on the tax implications of being self-employed and freelancing on the side that can help you get started.