Lucrative side projects are fantastic if managed and documented correctly. Often the losses generated by side projects are down to simple mismanagement, or total ignorance, of the money coming in and going out.
It doesn’t matter if you are involved in something niche or specific, you must treat these endeavors with the seriousness and attention to detail you would expect from a multinational corporation. It may seem excessive, and melodramatic, but these small money-spinners can spiral into big problems if one is not aware of what exactly is occurring involving their money. Moreover, ignorance of taxation laws and legal protection can leave you vulnerable and your savings exposed.
Ultimately, if you keep track of the enterprise and become well-versed in basic protocols, your side project is not only more likely to succeed but it is less likely to take you down with it if it doesn’t. So, to assist with the initial steps, here are three essential tips for side projects.
Get Yourself A Spreadsheet
If you are in any way dealing with money, Excel should be your best friend. Don’t worry if you cannot afford this admittedly costly program, there are fantastic free alternatives that have almost identical interfaces and features. Moreover, if you are not computer literate to the extent Excel requires, the Youtube channel MotionTraining has extensive video tutorials available. So, if you are tallying up your wins and losses on the likes of Scottish football betting or separating the profit from the revenue of your online marketplace shop, Excel is a quick and easy way to calculate and visualize these findings. Far too many people don’t properly record their finances and consequently play with money they don’t have. Excel allows you to make safe decisions and be reassured that your side project’s losses, revenue, and costs equal a consistent, feasible, and lucrative enterprise. So, before you even post your first audition or place that initial bet, set up a spreadsheet!
Documentation, Documentation, Documentation
It may seem borderline obsessive, but always keep documentation of everything involving your side project. If it is bank statements, email correspondence, invoices, betting slips, or screenshots of auctions, keeping these documents organized and categorized offers you both protection and information. Whilst it is unlikely that you will ever ‘need’ the majority of these documents, if something does go wrong you will be grateful that you kept and organized them. There is nothing more frustrating than not being able to find that proof of payment or that telling piece of correspondence, so why put yourself through unnecessary frustration for the sake of a minute’s filing each day?
The Law’s, The Law’s
Many potential side-projects, such as betting and online auditioning, are not taxed. Whilst other enterprises, such as content writing, are. Admittedly, the majority of side projects will not reach the level of profit needed to be eligible for taxation, but it is always worth checking, especially if your side project becomes so lucrative that you are considering pursuing it full-time. Official government websites in the UK – like https://www.gov.uk/business-tax/self-employed – will be able to give you detailed information regarding income thresholds, needed documentation, and eligible enterprises. As the old proverb denotes, better safe than sorry.