New data suggests that a side gig could bring in more than a worker earning the UK Living Wage, highlighting the opportunity available for enterprising employees.
While many people view side hustles as a way to generate cash without leaving their full-time job, research from ecommerce website builder GoDaddy shows that the average moonlighter earns a whopping £22,900 a year in supplemental income.
That is around £1,600 more than someone working 37.5 hours a week on the UK Living Wage of £10.90. It demonstrates the huge return on investment that savvy entrepreneurs can get for relatively minute startup costs.
The analysis includes data from 2.3 million UK microbusinesses, and is complemented by an annual survey of 2,683 UK microbusinesses owners (those with a unique domain and an active website) from January 2023.
Side hustle era continues for enterprising Brits
Leading independent job board CV-Library recently revealed that 58.2% of UK workers are planning to take on a side hustle in 2023, driven by the twin priorities of job security (62%) and earning more money (38%).
Side hustle culture has grown in tandem with the popularity of remote working. As many company employees work from home to cut down on commuting time, a large proportion of us have started putting that time into generating a second income.
Both of these motivations are likely driven by the cost of living crisis, which has led to a fall in real wages amongst UK workers.
Younger people, the age group that tends to be the least financially secure, are most likely to start a side gig. Of the microbusiness owners that GoDaddy surveyed, 81% were aged between 18 and 34 years old.
Research has found that younger entrepreneurs are also the most likely group to turn their side gig into their main source of income. 92% of startups founded by Gen Z entrepreneurs start off as a side hustle.
Side gigs cheap and quick to start
One of the most appealing aspects of starting a side hustle is that it requires very little upfront costs. According to GoDaddy, 58% of side hustlers funded their new venture with less than £500.
The GoDaddy research also revealed that starting an online side hustle is time-effective. Easy small business website builders mean that almost half of owners had their site built and up and running in a couple of days. 13% said it took them just one day.
Katie Anderson is the owner of vintage and slow fashion business Pine & Treasure. Anderson says she set up her website with GoDaddy to make a bit of extra money whilst travelling.
“I started selling second-hand items through Instagram. When I returned to the UK, I wanted to continue the business and expand online. Setting up a website was incredibly simple and stress-free, costing me just £230.”
More than a third of side hustlers using AI tools to build their business
Increasing numbers of entrepreneurs are also using artificial intelligence (AI) to help build and grow their businesses.
The superfast rollout of the technology has been a cause for concern for some business owners. IBM CEO Arvind Krishna recently made headlines when he announced the tech giant would stop hiring for roles that AI could replace.
Nonetheless, as AI tools become cheaper and more accessible, they are proving to be a helpful accelerator for startups to scale-up without needing to spend money on hiring expensive talent.
More than a third of the side hustlers that GoDaddy surveyed reported using AI tools to contribute to their business in some way. The most popular uses are generating social media copy (47%), conducting market research (41%), and devising social media strategy (39%).
Andrew Gradon, head of GoDaddy UK & Ireland, comments: “It has never been easier, or quicker to set up an online side hustle, and GoDaddy’s data shows the financial rewards can be significant.
“Technology has dramatically reduced the barriers to entry, giving entrepreneurs the tools to start and grow their businesses in no time at all.”
From kitchen table to business empire
The ease and speed of setting up a side hustle, combined with the potential financial reward, mean 70% of the entrepreneurs surveyed by GoDaddy reported that they now hope to turn it into their primary business.
Many entrepreneurs choose to launch their business careers through this corporate ‘side door’. The side hustle route has fewer obstacles to jump through, as owners can avoid paying for expensive overheads like office space or business rates.
Investment is also side-stepped. Because of the low startup costs associated with starting a side hustle, the more challenging areas of starting a business, such as raising capital, can be prolonged.
Starting small can also ensure that scale-up remains achievable, by setting a more gradual growth trajectory. In fact, despite the current business challenges around record-high energy rates, almost two thirds (60%) expect their venture to grow by the end of 2023. Just 3% think they will decline.
Anderson is in the former group. “Since going online, Pine & Treasure has grown significantly,” she shares. “The business is generating enough profit for me to manage it full-time, matching my previous salary as a marketing director for a creative agency.”
Feeling inspired? Check out our guide to the top cheap small business ideas for a full breakdown of the best, low-cost startups with a big return on investment.
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