Not sure how to start your business while working full-time? Check out these steps on starting and registering your own business.
It seems like a dream to start a business with so much time in your hands, right? Quitting your job and starting a business from scratch looks like a scene straight out of a movie. It also looks so easy! While this is a pretty common picture of business startups, not everyone has the privilege to drop everything to take a risk.
The good news is, that’s not the only path to launch your very own business! In fact, there are quite a number of giant companies that started as side hustles. Steve Jobs was working the night shift with Atari and Steve Wozniak was also an engineer at HP when they were building Apple. Kevin Systrom, founder of Instagram, also used to spend his nights and weekends learning how to code while being Nextstop.com’s product manager during the day. If these businessmen can make it while taking care of their day job, so can you!
Although doing jobs on the side isn’t a new activity, the term side hustle didn’t actually come in the language until the 1950s. Today, it means doing other work to supplement your primary job’s income.
Normally, side hustles come as freelance work or a business. Many people choose to hop on a side hustle through the hundreds of freelancing sites (like Upwork, Designhill, Toptal, Fiverr, etc.) that have popped up in the past few years. Meanwhile, others take the traditional route of building their own businesses from scratch. Either way, these solutions to the current problems on financial security have become more popular recently. In fact, a survey by the Academics at Henley Business School reveals that 1 out of 4 people in the UK runs at least one business while keeping a day job. However, it’s not always the land of milk and honey for all. Despite the number of people flocking towards the world of side hustles and side businesses, only a select few succeed — nine out of ten new startups fail.
Setting up a business requires preparation. It requires a game plan. In this article, we’re sharing to you how to prepare for your side business without having to quit your day job.
- Set expectations.
Sure, your business idea is promising. However, business success is more than just having a unique idea, a plan, or a goal. There are obviously going to be bumps along the way. It’s not going to be an easy ride. Many people quit right after they encounter a small problem simply because they weren’t emotionally or mentally prepared for it.
To make sure you keep going, expect that you would run into some setbacks or a few issues. Entrepreneur and best-selling author, Tony Robbins shares, “What we really have to do is get ourselves to follow through, and the reason why most people don’t follow through is because their psychology is messed up.” He adds that “business success is 80 percent psychology and 20 percent mechanics.”
It’s mostly in the head — your attitude towards failure and success. Understand that hiccups in business are normal so it’s important to remember your why whenever you come across one. Why did you decide to start your own business in the first place? Who or what is this for?
- Set a realistic goal and achievable milestones.
Setting too ambitious goals could cause you to be discouraged the moment you find out that you can’t reach it. Meanwhile, goals that don’t challenge you enough to be better in managing your time and resources wastes your full potential.
So how do you set a realistic goal that leads you to business success? Set goals that are SMART: Specific, Measurable, Attainable, Realistic, and Timely.
Here’s an example:
Let’s say your general goal is to launch your business. That’s great! However, to achieve that goal, it’s best to break it into nuggets that are more specific and easier to evaluate. Using the SMART goal template, we create a narrowed-down goal that we can work on right away.
Specific: I want to start selling my art prints on Etsy in 2 months.
Measurable: I will measure my progress by how many art prints I sell.
Attainable: I will build my online store and post all my samples on it.
Realistic: Building and opening the online store will secure myself passive income.
Timely: I will launch my store in 2 months.
Setting a template for clearer goals doesn’t always make the load lighter, but it helps you out by identifying what specific actions to take now that the bigger goal is laid out in bite-sized pieces.
- Manage your day job well!
Starting a new business on the side can be overwhelming. If you’re not careful enough, you might get too engrossed in building your side hustle that you’d forget your main one. Don’t get fired because of your business! Just because you’re working on something new doesn’t mean it’s okay to set aside your responsibilities for your day job. Learn to establish priorities. If it helps, create a schedule to stick to. For example, you could only work on your side hustles at night (when you’re off your day job) and on the weekends. The key to success in both hustles is balance.
- Get more done in less time.
Of course all of us are busy. One of the popular issues when you’re starting out is the fear that your free time is not enough to manage a side business. Here’s the truth: you actually have a lot of time in your hands; what you might lack is proper time management. Here are a few tips on how you can manage your time better:
- Keep off social media.
According to the latest studies, people spend an average of 145 minutes a day on social media. That’s 16.92 hours a week and 72.5 hours a month! Imagine all the things you could do for your business during the hours you usually spend on your phone.
- Schedule personal errands.
Before you start your week, plot your errands such that it doesn’t get in the way of your business operations. You can get your groceries in bulk or you can go on an errand day once a month so that you won’t get distracted on the days you need to work on your business.
- Make the most out of your downtime.
If you commute to work, you can use the extra time to work on your business plans instead of doing nothing. You can also pack a lunch and save your time you usually spend to get something to eat. You’d be surprised how much an extra 20 or 30 minutes a day makes a difference for your business.
- Start now — don’t wait for the perfect time!
Surely you’ve heard that there is no perfect time but now. It’s a popular saying because it’s true — especially for your business. So many people with great ideas fail to start simply because they were anxious that it wasn’t the right time yet. The truth is that waiting for the perfect timing only delays your success.
TeleSign co-founder and CEO, Ryan Disraeli shares, “The reality is that the longer you wait, the more time you will have for excuses to pile up until starting your own business feels like an insurmountable feat.”
We often wait until our ideas are validated or until it sounds perfect in our heads, but the longer we delay, the lesser the chances of succeeding. The best time to start a business is today.
- Wait before you quit.
You might feel excited now, but restrain the desire to quit your job early into the business. You’ll never know when you’d need the security of having a regular paycheck. Keeping your day job could also help you build the necessary traits and skills required for your business. Research studies have shown that people who decided to keep their day jobs while running their businesses were 33% more likely to succeed than those who risked leaving their jobs to work on their businesses full-time.
If you intend on leaving your job soon to work on your business, prepare at least 6 months’ worth of your living expenses as a safety net.
Registering your business (for business-owners in the UK)
Once you’re set on finally working on your business idea, it’s time to make things official! If you’ve already checked your employment contract and see no conflict of interest, you can start choosing a legal structure for your business. We outlined the main differences between a sole trader and a limited company below. However, for a more detailed guide about which one suits your business best, check out our other article, “Should I be a Sole Trader or Limited Company?”
- Sole Trader
Registering as a sole trader is the easiest and most popular way to start a business in the UK. In fact, about 76% of businesses in the UK are registered as sole traders. Sole traders are basically self-employed. If you’re still starting out or if you’re just testing the waters, registering as a sole trader will be the best route for you.
Although it says self-employed, you may work on your own or hire employees as well. You don’t have to work alone. There are no registration fees and your accounts and records are quite straightforward. However, you do need to send your self-assessment tax return every year, and pay income tax on your profits and Class 2 and 4 National Insurance.
Sole traders need to register with HM Revenue and Customs (HMRC) as self-employed and prepare the following:
- a National Insurance (NI) number
- a business name if you’re not trading under your own name
Since you’re not registering your business as a company, the only proof you’d have that you have successfully registered as a sole trader is your own Unique Tax Reference (UTR) number. You should get this around 10 days after you’ve completed your registration.
Here’s a step-by-step registration process if you’re a sole trader. To know more about taxation as a sole trader in the UK, we’ve also written an article about it here.
- Limited Company (LLC)
A limited company is a company “limited by shares” or “limited by guarantee.” Limited by shares means that the company is owned by shareholders who hold specific rights. If you own the entire company, you are its single shareholder. There is no minimum or maximum shareholders required. It is legally separate from the people who run it, and your personal finances are separate from the company’s. Its profits are kept after the payment of taxes as well.
To be registered as a limited company, you need to have the following:
- Complete registration at the Companies House
- A business name and address
- At least one (1) director
- At least one (1) shareholder
- A memorandum of association or articles of association — agreement to form and rules about the company agreed by the shareholder, directors, and the company secretary
Here’s a step-by-step registration process for your limited company.
To know more about the two, we’ve written an article on the differences between being a sole trader and a limited company. The government information website (gov.uk) also explains everything you need to know about the process of registering your business. To learn more about taxation as a sole trader we’ve broken down the process of filing your tax in this article What Sole Traders Should Know When Thinking About Compensation and Taxation.
Starting your own business while keeping your day job may be overwhelming, but it’s a perfect means to dip your toes into entrepreneurial waters without the risk of losing everything. It not only serves as a great way to be productive during your extra time, it also provides you with extra income. If you’re up to the challenge of juggling work and business, you’re on your way to success!