By Claire West
As wages fail to keep up with household bills Aviva’s bi-annual small & medium enterprise (SME) Pulse found nearly half (44%) of part time business owners say they run their businesses to supplement existing incomes.
The research* found that 7 out 10 people are juggling their part time businesses with a full time job, but nearly half of those surveyed (48%) plan to make their businesses full time with more than one in ten (15%) aiming to be a fully-fledged business within the next two years.
Of the part time business owners surveyed, 42% had turned hobbies such as photography, arts and crafts and cake-baking into part time businesses with the others surveyed providing website design, consultancy, retail and trade skills like decorating.
Inspired perhaps by the ‘Kirstie Allsopp effect', more women are likely to have creative part time businesses than men (49% of women compared to 33% of men). Aviva’s research* also reveals that women are far more ambitious with more than a third (35%) of women planning to eventually make their hobby full time compared to a quarter of men (25%). Indeed, the research shows that within the next two years, women are twice as likely (20%) to plan to go full time than men (10%).
Aviva’s bi-annual Pulse* also reveals that the part time entrepreneur has an average turnover of £3,800 per year. Those in the East Midlands have the highest turnover out of any region in the UK at £6,400 per year. The lowest turnover figures were in Northern Ireland and the South West, where part time business owners see an average annual turnover of £1,680 and £2,780, respectively.
For those planning to go full time, more than a quarter (27%) say they will only do so once demand exceeds their expectations, with the second most important consideration was gaining funding (16%).
Robert Ledger, head of small business at Aviva, comments: “Nearly a third of part time ventures began as a chance to turn a hobby into a business, but it is understandable in the current climate that for most the need to supplement their income was the key driver.
“If you are thinking of setting up a business it is really important to carry out research before you start to make sure there is a market for your idea or product. Setting up on a part time basis can be a good way to test the water to see if those business ideas can work on a bigger scale.
“It seems that from photography to cupcakes many entrepreneurs are taking their first steps to becoming businesses of the future which is exciting news for the economy, especially in light of recent reports on a growth in business confidence in the UK.”
Business know how
Aviva also found that the top three concerns part time entrepreneurs had when they first set up was not having the expertise or knowledge to make their business successful. More than a quarter (27%) were concerned about not knowing how to promote their business, for 26% it was not generating enough sales and 22% say it was not knowing how to manage their accounts*.
Insurance was also an area of concern with two in five (41%) part time business owners admitting they were unsure they have the right insurance in place. More than one in ten (14%) admitted to not having any business insurance. The lack of insurance was most prevalent across 18 — 24 year olds — with nearly a quarter of this age group (23%) admitting they didn’t have any.
In contrast, the age band most confident they had the right insurance were 25-44 year olds, with nearly half (49%) of female part-time entrepreneurs saying they are confident they have the right policies in place compared with 39% of men.
Ledger continues: “Juggling a full time job with a part time business is likely to take up a lot of your time, but arranging insurance need not be an onerous task. Having spent the time building up your business it makes sense to protect it.”
“If you are in any doubt about what you need you should give your local insurance broker a call. They are best placed to provide advice and check you have at least the minimum amount of cover that’s right to protect your business.”
Part time entrepreneur, Hannah Chaudhry, 30 from London runs a cake-making business, ‘The Girl Loves Cake’, alongside side her full time job as an estate agent. Hannah started her project after years of baking as a hobby. She began selling bespoke cakes on an ad-hoc basis for friend’s birthdays, weddings and other celebrations. In 2013, Hannah finally made the jump and registered her company and is running her business part time while still keeping her day job.
Hannah said: “Setting up a venture while working hasn’t always been easy but I’m slowly beginning to master the business side of things. Getting to grips with these new challenges has been a real learning curve, but I’ve found it extremely rewarding. One day I’d love to take the business full time, but for the moment my day job gives me an extra sense of security which I wouldn’t otherwise have.”