Jessica O'ConnorNew research from money.co.uk has highlighted the practical challenges faced by people starting side hustles, with issues ranging from time management to tax obligations often catching entrepreneurs off guard.
According to business accounts expert Joe Phelan, digital platforms have made it easier to launch a small business, but the operational realities are frequently overlooked.
He said: “With digital platforms making it easier to launch and market yourself, starting a side hustle can feel simple; just pick an idea, make a few social posts, and get going.
“But many of the trickier (and more important) considerations only become clear once you’ve already started.”
According to Phelan, time commitment is one of the first hurdles.
While side hustles are often presented as flexible, they typically demand more consistency and energy than expected.
Prospective entrepreneurs are advised to calculate how many hours they can realistically set aside each week without affecting their main job, rest, or family commitments.
Branding also plays a role in business sustainability.
Even at a small scale, having a coherent name, logo and online identity can help to build trust with customers and ensure that the business is presented professionally.
Phelan also points to tax compliance is another key issue.
Earnings over £1,000 in a tax year from self-employment must be reported to HMRC, with individuals required to register as a sole trader and complete a Self Assessment return.
Accurate record-keeping is essential, and many side hustlers are advised to set aside money in advance to cover tax and National Insurance contributions.
Managing finances effectively can also make a difference. While sole traders are not legally required to open a separate business bank account, doing so makes record-keeping clearer, improves expense tracking, and can provide additional services such as invoicing tools or cashback offers.
Finally, Phelan notes that legal and insurance protections are frequently underestimated. Depending on the type of business, product liability insurance, professional indemnity cover, goods in transit protection, GDPR compliance, and copyright or trademark considerations may all be necessary.
Phelan concluded: “A side hustle can be exciting, empowering, and financially rewarding.
“But, if you’re considering starting one, you need to think beyond the idea itself. By planning ahead for the practical side of running a small business, you’ll be in a far better position to build something sustainable.”
