So, like an estimated third or more of other people living in the UK, you decided to start your own side hustle to earn a few extra quid and things have worked out rather well. Well done.

You’re making good sales, some welcome additional cash and you’re quite enjoying it. Now you want to ramp things up and grow your side hustle into a larger, more successful business. The problem is, you’re not sure how to do it or what new challenges could come your way. Here are seven key areas you should think about.

Marketing

Before you do anything, carry out basic market research to find out how feasible it is to make significantly more sales. Having sound current knowledge of your customers and competitors is essential to better understanding whether you’ll be able to make enough new sales to grow your business. If research leaves you confident that it’s possible, you should devise a marketing plan, setting out your new sales objectives, while identifying your target customers and explaining how you’ll attract and sell to them. Do you need to develop new products or services? Do you need to start selling via different channels (e.g. online if you’re not already doing so)? Should you target different types of customers, possibly those living in other places?

Funding

Some businesses achieve organic growth off the back of their own sales. However, your current profits may not provide all of the investment you need to grow your side hustle as quickly or as much as you want, it depends on how ambitious your plans are. If your business profits aren’t enough to fund that growth, you’ll either have to invest more of your own savings or seek external funding. Carefully assess the pros and cons of possible sources of external funding and make sure you realise the full implications before you make any firm decisions. Also know that funding business growth brings additional cash flow pressures.

Skills

If you haven’t successfully grown a business before, inevitably, you’ll lack know-how. But just because you’ve no experience to draw upon, doesn’t mean you cannot increase your knowledge, either by reading reliable books or websites or by speaking to others, whether professional advisers or people who have run and grown their own successful small business. Online and offline networking can be a great way to grow your knowledge and contacts. And (budget permitting) you can pay others for the skill and knowledge required to grow a business, you don’t have to do it all yourself.

• Websites such as Fiverr, Upwork, and Freelancer.com might help you find cost-effective freelance support, for example, if you want to develop your brand or website.

People

You may need to find employees if you are to truly take your side-hustle business to the next level. Recruiting and managing staff can be a huge challenge if you lack knowledge and experience. Employers must also comply with a wide range of employment legislation and there can be serious consequences if they don’t. You may also need to provide training, to ensure that your employees represent your business in the right way and their performance is in line with your expectations. Making good recruitment decisions is vital to your success.

• Government website GOV.UK provides guidance to employment rights and legislation.

Suppliers

If you are to grow your business, you must ensure that your current suppliers can continue to meet your requirements as you move forward. If you need to order in greater stock or material volumes and they cannot deliver, you’ll need to explore other options. Finding new reliable suppliers can take time, plus, you may not get the credit terms you currently enjoy, so there could well be cost and cash flow challenges to negotiate.

Premises

To take your business from a side hustle to a more successful full-time business, premises may be a key consideration. If you don’t currently have them because your business is home-based, you may need to find premises. If you currently have premises, would they help or hinder your growth ambitions? If they’re likely to hold you back rather than propel you forward, you’re going to need to find new premises. This can take time, but you don’t want to rush, because it could have costly consequences.

Tax and Software

If your sales have been below the trading allowance threshold (£1,000), you don’t need to register your business. However, if growing your business means you’ll go over this threshold, you must register as a sole trader via GOV.UK (sole traders make up more than half of UK businesses) or register a limited company. GOV.UK explains more about being a sole trader. Make sure you fully understand your tax responsibilities as a sole trader and the implications if you earn other income. Also invest in good accounting and tax return-filing software. It could save you much effort, time and money. Be sure to claim all of your tax allowances and expenses.

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