Get your side hustle on and make the most of the changing landscape of work

Put your hobbies to good use by turning them into a side gig that can capitalise on the new ways we work and live post-pandemic, writes Hamish McRae

Crafting is just one of the ways people are making money from their hobbies (iStock)

Got a side gig going? Side gigs, aka side hustles, have been booming since the lockdowns. From Wales to New Zealand, people have figured out new ways of making money from their hobbies, using their spare time to start new businesses or just doing a bit of freelance work.

A lot of the evidence is anecdotal and much of this activity is under the radar, but the US has some fascinating data which does confirm a surge in business formations. The US Census Bureau shows monthly applications for tax IDs, which were running around 300,000 before the pandemic, reached 488,000 in April. In the UK there was a similar rise in new businesses, with 781,000 registered last year at Companies House compared with 691,000 in 2019.

Again, a lot of people are finding ways to make money as sole traders, without formally registering a business to do so, so these numbers are just the tip of the iceberg.

Why is this happening? There are at least four forces driving the growth of new businesses, including those started by people in employment.

One is the impact of the furlough scheme. You cannot take another job if you are on furlough but there is nothing stopping you carrying out some other activity, and if your hobby makes money, you can continue that as and when you are back in your job.

There are also huge structural changes that have taken place at every level in the way we work, shop and live. These have destroyed many jobs but also created new opportunities. For example, the more that people get used to shopping online, the more opportunities there are for start-ups to sell stuff online. One third of UK retail sales are now online. If people stop travelling into the office there are more opportunities to sell them services at or close to their home. And so on.

The third leads on from these changes. The entry cost for starting a business from home, and the risks involved, are much lower than one that requires premises. So it is much easier to start a side gig in your spare time – perhaps using the time saved by not commuting – than it used to be in the old “normal”.

Finally, we have learnt a lot about job insecurity in the past year. Jobs that seemed solid have proved not to be so. The case for supplementing one’s main job with some other form of income becomes common sense. It has been a devastating year for many self-employed people, including those in the performing arts, but it has also taught us about the need to have more than one income stream.

The more sources of income you have, the better you are able to cope with reverses, and this is probably as good a time as any to start out on your own.

But how will employers react to the fact that many of their best people have got a side gig? I expect most of them will be less than thrilled. That is perhaps one of the reasons why many want to get their people back in the office, and this is not a new problem.

Wise companies have in the past found ways of using the entrepreneurial zeal of employees to get themselves into new lines of business. And from the point of view of the budding entrepreneur, getting backing from an employer could be the difference between success and failure. It probably means giving up ultimate control but in return you get solid backing from people who know you, rather than having to hawk your idea around the venture capital community.

There is a further twist to the story. Perhaps the strongest reason for starting a gig on the side is that it is a safe way of seeing whether you like being self-employed, or whether you would rather have the relative security of the monthly salary hitting the bank account.

The origin of the expression “freelance” comes from Sir Walter Scott’s historical novel Ivanhoe, where a medieval lord hired mercenaries to fight for whoever would pay him best: his army of “Free Lances”.

Some people like to think of themselves as mercenaries, others prefer to be regular soldiers. But you only know which you are until you try – as many people over the past year have found out.