Starting a side business

[redrabbit29]

Hi everyone,

I've flirted with this idea for a while. I work in a technical cybersecurity role. I'm lucky enough to WFH and I am paid very well for my role. I'm a consultant and very flexible in my work agenda.

My employer has no objections or interest in this, it's something a few consultants do. As a result, can we keep replies focused on the business side, logistics and general recommendations?

I am considering starting a very small Ltd business, for a two main reasons:

1) Extra income

2) To give some security just in case I lost my job or something, I'd have a small business to dive into, at at least temporarily

Aims

1-2 jobs per month totalling maybe £5k income pre-tax. Quite simple, like a side hustle really.

I have a domain name, and going to:

• Pay for Google Adwords (£50-100 a month)

• Linkedin Ads (unsure on price)

• Separate bank account - maybe with Starling bank who have no fees

• Will register company on HMRC

• Utilise social media management tool to schedule posts and share information

The work I will do can be done around my current job. I don't want to work 24/7, that's not the intention, it's just to utilise some of my downtime at work. I would also be willing to do a bit extra 1-2 evenings a week if it's for my own business.

Questions

What should I be considering?

Any tips for someone starting out like this? Any other services, things to promote myself, get noticed, etc?

Any small business owners, or people who have done side businesses like this?

I have read up on paying yourself dividends, and also paying into a director pension over a certain value to avoid higher tax bands. I'm obviously no where near that stage, but just thinking ahead.

Thanks

[Simpo Two]

£5K a month or a year?

[redrabbit29]

Simpo Two said:

Is it worth having a limited company for a £5K turnover? Is it for financial or protection reasons?

As for paying yourself dividends, it's not the game it used to be. But I guess 8.75% is less than 20%.

Internet says: 'The tax-free dividend allowance for 2024-25 has been cut from £1,000 to £500. Above this amount, any dividends you receive from your limited company will attract the following personal tax rates, based on whichever Income Tax band(s) you fall into: 8.75% (basic rate) – income from £13,070 up to £50,270.'

Up to £5k per month. From what I read most say it's best to have a separation between personal finances and the business side. So a different account, name etc.

I also don't know where it will go. It may just be a short flirtation with the idea but nothing more. Maybe it is a bit premature to be thinking of it, but if I am doing a website, and paying for advertising it may be needed upfront

[DSLiverpool]

Who’d you know
What do you know
What is your advantage?

Until you know this nothing else matters.

[StevieBee]

DSLiverpool said:

Who’d you know
What do you know
What is your advantage?

Until you know this nothing else matters.

This.

What is it that you will be doing? How will you go about winning the business or are you going to rely purely on the SEO, etc?

My advice would be that before you start spending time and money setting up a website, bank account and worrying about dividends and the like, focus all energies on determining what exactly it is that your business will do and how it will achieve sales to the level you've stated.

Once you've determined that, prepare a proper plan. Establish the cashflow. Work out the costs and implement only when you're satisfied that all ducks are properly lined up otherwise you risk working in your day job to support you business.

[Monkeylegend]

Reading the thread title and the first part of your post I thought you already knew what you were going to do, not ask us to tell you

[Panamax]

You'll need a limited company and liability insurance, if you have any sense.

Why will potential customers wish to deal with you rather than a bigger outfit?
How will customers be supported when you're on holiday?
What will be your payment mechanism and terms?

[mikef]

You don’t know what you want to do but have a domain name for it ?

[Monkeylegend]

haventaclue.com

[Shrimper]

First of all - good luck!

Next - just get on with it!

I have used Starling bank for one of my businesses for several years and find it very good - no fees, simple & easy to use. Definitely keep business finances seperate from personal, it just makes your life easier.

With regards to SEO, social media ads etc - personally I don't bother. I know there is a need for them but I feel the investment required is significant - £50 here and there won't really provide you any benefits, but could be better spent on investing in your business processes, equipment etc in the early stages.

A few things I've learnt and try to pass on to others:

1) excellent customer service is key and will often lead to recommendations and repeat orders/work.

2) make lists - when you feel overwhelmed, write a list, prioritise things and allocate other things to other days

3) work out what makes you different and concentrate on doing that well and selling

4) don't be afraid to upsell - it always amazes me what customers will say yes to that they didn't realise they wanted or needed!


Good luck, keep us posted, and keep asking questions!

[Regbuser]

If it's niche consultancy, then even with a list of existing contacts, it'll be word of mouth and recommendations while you get established, up to 5 years.
Then Google SEO is kind of meaningless, as if you get swamped with enquiries, unless you have succession planning, with up and coming employees, you'll stall..

[trickywoo]

Panamax said:

You'll need a limited company and liability insurance, if you have any sense.

If you aren't employing anyone or having clients visit your premises the issue of insurance is much less clear cut. Arguably the Ltd company umbrella is all you need.

[zedx19]

5k a month for a side hustle seems very lucrative to me, are you positive you can do this around your normal job and still have a life?

I have a side hustle, have had it for 12 ish years now, it takes up around an hour a day and profit is 1k ish per month. I hold a Director role in a 40 mil turnover business as my day job, have 4 kids + 1 wife and would love to bring my 1k side hustle to 5k a month, but I'd absolutely have no time for anything other than day job + side hustle.

My point is, make sure your side hustle doesn't impact your ability to have a life.

[StevieBee]

zedx19 said:

5k a month for a side hustle seems very lucrative to me

The OP refers to a side 'business' not a side 'hustle'. There is a difference and my interpretation of the OP is that he understands this and is looking to set up a proper business (though your points still apply).

[MustangGT]

redrabbit29 said:

The work I will do can be done around my current job. I don't want to work 24/7, that's not the intention, it's just to utilise some of my downtime at work. I would also be willing to do a bit extra 1-2 evenings a week if it's for my own business.

You sure about this?

Any contract of employment worth anything includes a statement that any work done during working hours belongs to the company and not the individual. Therefore anything you do during their hours does not belong to you.

[DSLiverpool]

trickywoo said:

Panamax said:

You'll need a limited company and liability insurance, if you have any sense.

If you aren't employing anyone or having clients visit your premises the issue of insurance is much less clear cut. Arguably the Ltd company umbrella is all you need.

I can’t agree with that advice, regardless of LTD or not I’d have legal expenses and liability.

[redrabbit29]

Hi All,

Thank you for all the helpful replies (and the unhelpful ones too). Some amazing advice in here.

I appreciate the encouragement too, and also the experiences some of you have had when doing something similar.

Someone asked about why I have a domain name and no idea what I want to do. That's not quite true. The domain name is a place for blog posts, for recording useful things I have found, technical solutions, etc. As much a record of work, but it's also a platform to launch either my own side business or for use in contracting work if I ever go that direction.

I have a few ideas and options, which in my head are clear. There are some great points, such as who I know, what do I know, my unique advantage etc. I know most of this, but I am going to write some things down on paper and brainstorm. I've done a fair amount of research and a lot of people say it's worth brainstorming and really diving into each part to see what your angle will be.

Thanks again everyone, including Shrimper for the encouragement and tips. I have heard mixed things about adwords and SEO so your post makes a lot of sense.

I'll update when I have made my first £100k.

[trickywoo]

DSLiverpool said:

trickywoo said:

Panamax said:

You'll need a limited company and liability insurance, if you have any sense.

If you aren't employing anyone or having clients visit your premises the issue of insurance is much less clear cut. Arguably the Ltd company umbrella is all you need.

I can’t agree with that advice, regardless of LTD or not I’d have legal expenses and liability.

If you have insurance be very clear in your mind how you plan to use it. For example if a big company takes you on for giving bad advice (we aren't taking about selling a physically dangerous product) are you going to put your time into fighting it or are you going to empty the company and move on?