From initial growth to maintaining long-term prosperity, the side hustle journey can certainly be a rollercoaster ride. Whether you're developing your business idea, setting up as a sole trader, or looking to optimise your current enterprise, there's always opportunity for improvement. In this week's article, we delve into four key areas of running a small business: planning, implementation, productivity, and housekeeping. Read on for our top 10 tips to optimise your side hustle!
Planning
1. Identify a target market
When you have a business idea, the first essential step is to single out your target market: the specific group of customers you want to attract. Once you have identified your potential target (typically based on factors such as lifestyle, income, or age), this should inform your ongoing business planning. Make sure that the product or service, and the way that you brand and advertise it, will appeal to the market you’re aiming for.
2. Seek feedback
Sometimes, it takes another point of view to identify areas for improvement in your business venture. Family and friends can be a great place to start – however, if you can, try to find people who represent your target market. Present your ideas to them or even allow them to try a free sample of your product or service.
Although perhaps a little daunting, the early feedback you receive during market research could be worth its weight in gold. Adapting to the comments and suggestions received might just save you a lot of time (and headache!) further down the road. After all, if you want to sell a successful product or service, it needs to appeal to your customers.
3. Research your competitors
If you think you have identified a gap in the market: perfect! A product vacuum is often the ideal environment in which to insert your new business idea. However, being unique is hard and, sometimes, it can be just as lucrative to take an old idea and do it better than anyone else. This is the essence of competitive branding: check out your competitors and see how you can make your business stand out in its field.
Implementation
4. Establish clear goals
An essential part of running a smooth business is to know where you’re heading. Establishing definitive goals from the outset will provide you with clearer direction, as well as helping to inform your daily decisions. Remember: one of the keys to success is consistency. Identify your goals and work towards them!
5. Set up a schedule
Once you have clear goals, you need to work out how to reach them. Breaking goals down into steps will help you to identify your target timeline. Once you have this sorted, setting up a weekly or even daily schedule is an ideal way to achieve your aims. Furthermore, in order to run a successful side business, you need to make sure that you spend your time and effort wisely. Remember to schedule in enough down-time as well as work: maintaining a healthy work–life balance with sufficient rest can be much more efficient in the long run.
Productivity
6. Keep learning
Once you have a healthy or even thriving business, it’s important not to sit back and get too complacent. Try to keep up to date with changes in the market, keep track of any competitors, and watch out for fluctuations in demand. Don’t be scared to reach out to customers for fresh feedback – you might be only one small step from a brand-new business goldmine.
Furthermore, certain types of study (for example, updating industry-specific technological knowledge, or developing your administrative skills) can be eligible for tax relief. Why not make use of this opportunity to step your business up a notch?
7. Embrace failure
An essential aspect to learning and improving is failure. As much as we all wish to avoid it, some setbacks in business are inevitable. However, these challenges don’t have to hold us back in the long term. Any seasoned and successful entrepreneur would tell you the same: failure is simply the opportunity to improve your strategy.
If you don't try, you can’t fail… but if you haven’t ever failed, you probably haven’t ever tried! Look out for any weaknesses and deliberately work on them to be your strengths.
8. Prioritise and delegate tasks
Even with a detailed schedule, you simply cannot do everything at once. That’s why it’s important to assess your tasks and prioritise the essentials (e.g. keeping on top of finances and important deadlines such as tax returns). This can be as simple as writing an organised list on paper, or making use of handy online organisational tools such as Trello.
Furthermore, it’s impossible to be adept at every skill – even if you are an avid learner. Sometimes in business, it makes more sense to delegate jobs to others who have more time or resources available to help with certain tasks (such as accountants or specialised finance software like AbraTax).
Housekeeping
9. Maintain comprehensive records
When running your business, don’t forget to keep detailed and tidy records relating to your trade. At the very least, tracking your finances can be a useful way to study your business’s cashflow, identify areas for more efficiency, and improve your profits.
Furthermore, although it is true that some financial information is sent to HMRC automatically (such as your financial data from online platforms), it is still your duty to store and maintain your own records. This is because, as a sole trader, your business income is your responsibility: your trade is a part of your personal income.
10. Keep on top of tax
As part of running a responsible and smooth business, it’s essential to prepare for (and pay!) tax. For sole traders, the most important such tax is the annual Income Tax Self Assessment (ITSA). As outlined in our Self Assessment overview, ITSA is the way in which sole traders (essentially, individuals running businesses as an individual) must declare their income. Unlike employment in a more traditional job, it is down to sole traders to submit details about their income to HMRC and pay the appropriate tax by the deadline.
If things are going particularly well, you might also find that you need to register for VAT. At present (2024), this applies to any business turning over more than £85,000. Although paying VAT on products and services we buy is something we do every day, submitting a VAT Return is another story. Luckily, it is now normal to submit your VAT Return online, and there are HMRC-registered services such as AbraTax who are here to help make the process as smooth as possible.
Conclusion
On the whole, running a small business can be an exhilarating ride. There's no doubt that there can be challenges along the way, but the ultimate outcome can be astonishing. Be it initial planning or ongoing business maintenance, it seems the essential thread running through it all is consistency: start as you mean to go on. If you follow a neat strategy and make use of the available resources, then there's a good change of unlocking hidden potential and reaping the reward.