A Bit On The Side

A Bit on the Side

No, not what you’re thinking, I’m talking about the Side Gig, Side Hustle, Moonlighting, Homers, whatever you want to call it, it can be a very good idea.

Initially I built up my accounts practice on the side of my day job before leaving that job to grow my business full time.

More and more people are moonlighting on the side of their day job – so why is this such a good idea?

Test the waters

If you eventually want your side job to become your full time job, growing it on the side gives you time to test the waters, experiment and learn.  It lets you try out different strategies to see what works and allows you to fail, all whilst keeping the financial security of your day job.

Not having to rely on your side gig for income allows you to focus on the long term success rather than short term income.

Extra Income

You’ll no doubt make some money from your side gig to compliment your full time income.  Whether you use this extra income to grow the business, save or dig yourself out of debt is up to you but the extra cash will always be nice.

Cash lets you fund your own start up or take a pay cut when you eventually want/need to ditch the full time job and make your side job the full timer.

Money can make you feel that you have options, that you have some backup, that you can afford to fail.  In other words it makes you feel safe, and if you feel safe you are more likely to take the small risks necessary to start up.

What to do

You need to establish what your side gig is going to be – what are you good at, what do you know how to do, what would you like to do, what would others pay you to do.

Getting started

Once you’ve decided what you are going to do you need to work out how you are going to get clients/customers.  How are you going to get the word out about what you are doing and what platforms are you going to use to do this.

Keeping it going

Office management – even if your side job is something low tech such as dog walking, don’t think you don’t need to get involved in office management.

A side gig doesn’t have to be about money.  It can be for fun, to gain experience or self education.   However, if money is the main objective you need to take it seriously.  Dealing with administrative tasks, paperwork, income, expenses, taxes and marketing all need to be done.  If you are making money you have a legal obligation to declare this for tax which requires some record keeping.

Stay Organised

If you’re working 9–5 and then moonlighting on the side, you are going to be busy.  You must stay on top of the admin and if you are making money you need to stay on top of the finances.  Keep track of all income, expenses, bank and paypal accounts.  You may need to develop systems for tracking this, customer/client relationship management and other items relevant to your line of work.  These systems can be anything from notebook scribbles or spreadsheets to specialised software.  The more you have going on, the more you need to attend to these back office tasks.

Word of warning

If your side gig is something that could tread on the toes of your full time employers business, you should get their permission first as there may be clauses in your employment contract to stop employees setting up in competition against them or stealing their clients.

Photo Credit: Splitshire.com

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HMRCs Home Office Policies

How much can you claim, for using a room in your home for business purposes?

HMRCs guidance uses typically vague words such as ‘fair & reasonable’ and ‘modest or excessive’. The trouble is someone earning mega money will think one figure is fair and reasonable but to most of us the same figure would seem excessive.

HMRC believes just £4 per week is all that should be claimed for the use of a home office. This measly amount is deemed as a ‘significant’ expenses and any claim over this amount must be justified by providing records or demonstrating your calculations.

How to can claim over the £4 per week

One way to prove your claim is reasonable is to calculate your monthly outgoings for gas, electric, rent, water etc then divide this by the number of rooms in the property (excluding kitchens & bathrooms).  For example if you have 5 rooms (Lounge, Dining Room, 3 Bedrooms) and one is used as an office take 1/5^th of these bills.

If this amount seems too substantial for your business use you could divide it down further by the number of hours you spend in it working each day eg, 8/24 hrs or by the number of days per week that you work or by square meterage if known.

Beware

Be careful if claiming for more than one room as you will need more justification but it is possible ie a photographer could have an office and a darkroom (days before digital).

You should never claim the room is ‘solely’ for business purposes as this could lead to a business rates claim by the local council for part of your home or even Capital Gains Tax when you sell your property. Most people’s home office also doubles as a spare bedroom or is home to the unused exercise bike or the kids use it for doing their homework.

If you run your business through a Limited Company you can draw up a lease agreement so your company is reimbursing you for the costs of the room thus reducing your Corporation Tax but again, to be exempt from Capital Gains Tax when you sell the property make sure the agreement doesn’t state that it is solely and exclusively for business purposes.

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My Office

Following on from my previous blogs ‘Working from home’ and ‘What your desk says about you’, it occurred to me that none of my 170 clients have ever seen my office so here is a guided tour.

Firstly my office takes over 2 rooms; one has filing cabinets and storage of work to be done and work to be collected.

The other is where the many, many hours of work are done.

There are 2 workstations, 2 laptops, a Mac, 2 printers, shelving, stationery cupboard, filing trays, white board, pin board, Bose speaker doc, telephone, shredder, binder and all the necessary stationery. All very usual and boring.

However, I have some more interesting objects in the office to make it more personal to me.

A canvas of Moto GP Champion Jorge Lorenzo – I’m a big fan.

On the shelf you may have spotted there is an Ice Hockey goalie mask – a present from my husband. This one is from NHL team Florida Panthers (not my team but they are hard to come by) and it actually has blood inside it. I also have 2 ice hockey pucks – they make great paper weights.

Look see I really am qualified and licenced to practice!

My stapler is the best stapler ever, I had it for years at my last place of work and loved it so much that they let me keep it when I left 6 years ago and it’s still going strong. I don’t know what I’d do if it broke.

My paperclips are held in a little cake box from The Bulldog – one of those ‘special’ cafes in Amsterdam and yes the cake was ‘special’ too. My husband and I thought we would be brave and try one. So sitting on the edge of a canal in the red light district, whilst watching the numerous stag parties go by, we split the tiny cake in half and ate half each, then waited ….. and waited ……and, nothing!! It was probably just an overpriced sponge cake.

My husband and son stick stickers on everything – I hate stickers, the side of my printer is the only place I allow them on my stuff and they have to meet the criteria of being pretty/cute/girly bike related stickers.

Finally, my all important calculator. I’ve had it from when I was studying accountancy so I estimate it to be at least 15 years old. Pretty much all of the numbers have disappeared from the keys and I never even realised until my son tried to use it to do his maths homework and he would ask “Where’s the 3”, “where’s the plus”, and I would tell him “where they’ve always been” – no wonder he done so badly in maths.

 

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Desks – Which One Is Yours

‘If a cluttered desk is a sign of a cluttered mind, then what are we to think of an empty desk?’
Albert Einstein

In my last blog about Working from Home, I stated the importance of having a dedicated work space but whether it’s at home or not, what does this space say about you.

1. Messy as a Pigsty
If your desk is just pleasantly messy you are probably the creative type as it’s believed a messy environment encourages creativity. However, if it resembles a toxic waste zone you will just be hated by all who have to work near you.

2. Inspirational Message Overload
Personally I hate these things especially the team building ones you see in company offices, I’m far too cynical for these. People who need to be surrounded by these messages and quotes are thought to be slightly neurotic. ‘Inspirational statements are a psychological form of trying to keep people together emotionally and it calms anxiety.’

3. The Office Meeting Place
Is your desk the place everyone wants to be at? Maybe because you always have a bowl of sweets on your desk or have cool pictures or stationery that everyone wants to borrow. You are thought to be extrovert and you love the attention. You probably always had the best pencil case at school.

4. Clean on Monday, Messy by Tuesday
You try to start the week organised and promise to stay on top of things but then life takes over. You are a person who finds it hard to break habits but you get things done ….. eventually.

5. Always Neat & Tidy
Being perfectly organised is part of your daily routine. You are super organised, always on time and prompt to reply to emails. You wouldn’t dream of eating at your desk.

So, which one am I? I like to think I’m a 5 but sometimes (most times) I’m probably a 4.

Photo Credit:  SplitShire