Becoming part-time self-employed
How to manage the balancing act
Would you like to become self-employed alongside your main job? There are many reasons for this: On the one hand, part-time self-employment can provide additional income and therefore more financial security. On the other hand, it offers the opportunity to live out your own ideas and talents and realise your full potential. However, before you become part-time self-employed, you should also be aware of the challenges that await you and everything that you need to do on the path to part-time self-employment.
In this segment, we present the advantages and challenges of part-time self-employment. In addition, we give you tips on what you need to do to successfully master the balancing act between your main job and self-employment. After reading our tips and tricks, you'll be ready to put your idea into practice and can become a part-time entrepreneur without the worry!
Part-time or full-time self-employed
The definition
Your self-employment is part-time if certain criteria are met. These relate in particular to the working hours and income. The deciding factor here is usually the type of employment and the focus of your work. Working hours are often based on a maximum of 18 hours per week for part-time self-employment.
In addition, the income from the part-time self-employment must not exceed the work income. If you also have employees, you are full-time self-employed.
Becoming part-time self-employed: The benefits and challenges
For some, it is the opportunity to achieve their goals and for others, full-time employment with a secure income is the more appropriate option. As a personnel service provider, we know the benefits and challenges associated with part-time self-employment. For more tips on how to conduct yourself as a self-employed person, see the Do's and Don’ts for Freelancing..
Why do some people decide to become self-employed on a part-time basis? The benefits are as follows:
- Additional income: Part-time self-employment can generate additional income that gives you financial freedom.
- More flexibility: You can decide for yourself when and what you work on, as you are your own boss.
- Creative freedom: You can live out and realise your creative ideas and talents in part-time self-employment.
- Professional training and experience: Part-time self-employment offers the opportunity to gain new skills and experience and to develop professionally.
- Lower financial risk: If you become self-employed on a part-time basis, you have a lower financial risk than with full-time self-employment. You can try out your business idea and are financially secure thanks to the money from your main job.
- Protection against unemployment:Who knows how your situation will develop in your main job? With part-time self-employment, you can avoid unemployment in the event of redundancy and have a plan B up your sleeve.
Why do some people decide to become self-employed on a part-time basis? The benefits are as follows:
- Additional income: Part-time self-employment can generate additional income that gives you financial freedom.
- More flexibility: You can decide for yourself when and what you work on, as you are your own boss.
- Creative freedom: You can live out and realise your creative ideas and talents in part-time self-employment.
- Professional training and experience: Part-time self-employment offers the opportunity to gain new skills and experience and to develop professionally.
- Lower financial risk: If you become self-employed on a part-time basis, you have a lower financial risk than with full-time self-employment. You can try out your business idea and are financially secure thanks to the money from your main job.
- Protection against unemployment:Who knows how your situation will develop in your main job? With part-time self-employment, you can avoid unemployment in the event of redundancy and have a plan B up your sleeve.
There are not only advantages to becoming self-employed on a part-time basis. The following challenges must be overcome:
- Double the workload: Part-time self-employment means that you have to cope with the double burden of your main job and your second job.
- Time management: Many part-time employees work more than 40 hours a week. Good planning and effective time management are essential for balancing your work and private life.
- Competitors: The market for self-employed sideline work can be very competitive, so it's important that you stand out from the competition and offer clear added value.
- Legal and tax-related questions: There are many legal and tax issues that you should be aware of when you become self-employed on a part-time basis and that can be time-consuming.
- Image with customers: The fact that you are part-time self-employed can be interpreted negatively by potential customers. The same applies to partners and suppliers.
There are not only advantages to becoming self-employed on a part-time basis. The following challenges must be overcome:
- Double the workload: Part-time self-employment means that you have to cope with the double burden of your main job and your second job.
- Time management: Many part-time employees work more than 40 hours a week. Good planning and effective time management are essential for balancing your work and private life.
- Competitors: The market for self-employed sideline work can be very competitive, so it's important that you stand out from the competition and offer clear added value.
- Legal and tax-related questions: There are many legal and tax issues that you should be aware of when you become self-employed on a part-time basis and that can be time-consuming.
- Image with customers: The fact that you are part-time self-employed can be interpreted negatively by potential customers. The same applies to partners and suppliers.
You can find out even more about life as a self-employed person with our guide on the challenges and problems faced by freelancers.
The path to part-time self-employment: What you need to do
Being self-employed can bring many benefits. It not only offers the opportunity to improve your income, it also allows you to gain valuable entrepreneurial experience, which can later be invaluable when starting a full-time business. However, you should not just start your self-employment unprepared. A part-time occupation also requires some preparation. That is why we have summarised the steps required for a successful business start-up as a side hustle for you.
If you want to be a part-time entrepreneur, you first have to find a brilliant business idea. As with a full-time business start-up, you should look specifically for a business idea that requires the lowest possible running costs and investments. It is also important to check whether the business idea can be operated with the limited time you have. An online shop is a good option while a retail store takes a lot of time. When searching for a suitable business idea, you should consider whether it offers development opportunities. A breakfast service for office workers may turn into your own café.
How do you find the right project for you? Find out in our Freelance Guide. Alternatively, you can also search for opportunities directly in our project portal.
If you want to be a part-time entrepreneur, you first have to find a brilliant business idea. As with a full-time business start-up, you should look specifically for a business idea that requires the lowest possible running costs and investments. It is also important to check whether the business idea can be operated with the limited time you have. An online shop is a good option while a retail store takes a lot of time. When searching for a suitable business idea, you should consider whether it offers development opportunities. A breakfast service for office workers may turn into your own café.
How do you find the right project for you? Find out in our Freelance Guide. Alternatively, you can also search for opportunities directly in our project portal.
Before you become part-time self-employed, you should obtain the consent of your employer. Many employment contracts contain provisions that require the company to be informed about secondary employment. This applies in particular to employees working for public authorities and administrative bodies. Failure to inform your employer can lead to immediate dismissal in the worst case scenario. In the case of competitive activities, employees bear the onus and must prove that the consent for part-time self-employment has been obtained. Get your consent in writing as an oral agreement can no longer be proven at a later date.
Before you become part-time self-employed, you should obtain the consent of your employer. Many employment contracts contain provisions that require the company to be informed about secondary employment. This applies in particular to employees working for public authorities and administrative bodies. Failure to inform your employer can lead to immediate dismissal in the worst case scenario. In the case of competitive activities, employees bear the onus and must prove that the consent for part-time self-employment has been obtained. Get your consent in writing as an oral agreement can no longer be proven at a later date.
After approval, you can take up your part-time work. This raises the question as to the appropriate business form. Should you act alone as a sole trader, or as a private company in which several entrepreneurs operate together? Both variants carry the risk of personal liability. However, a corporation such as a limited partnership is too expensive for a part-time business start-up. It is therefore advisable to start as an individual, for example, with a sole proprietorship, a private company or a general partnership.
After approval, you can take up your part-time work. This raises the question as to the appropriate business form. Should you act alone as a sole trader, or as a private company in which several entrepreneurs operate together? Both variants carry the risk of personal liability. However, a corporation such as a limited partnership is too expensive for a part-time business start-up. It is therefore advisable to start as an individual, for example, with a sole proprietorship, a private company or a general partnership.
Before registering for part-time self-employed work, you should check whether permits are required or whether certain specialist knowledge is a prerequisite. In Germany, there are professions that are regulated and that you are only allowed to pursue with certain qualifications. This applies, for example, to legal professions, healthcare professions and engineering professions. Some master craftspeople who run a business are also subject to regulation. You should therefore obtain sufficient information in advance and obtain the necessary certificates to avoid legal problems at a later stage.
Before registering for part-time self-employed work, you should check whether permits are required or whether certain specialist knowledge is a prerequisite. In Germany, there are professions that are regulated and that you are only allowed to pursue with certain qualifications. This applies, for example, to legal professions, healthcare professions and engineering professions. Some master craftspeople who run a business are also subject to regulation. You should therefore obtain sufficient information in advance and obtain the necessary certificates to avoid legal problems at a later stage.
If you work as a part-time self-employed person, you do not have to pay any additional social security contributions. However, you should definitely contact your health insurance provider as your income from your secondary job is also used to calculate your contribution. Otherwise, additional charges may be incurred. If you want to become part-time self-employed as a student, you should also contact your health insurance provider.
As soon as your part-time self-employment becomes full-time (in terms of income and/or working hours), you can apply for self-employment. This exempts you from compulsory insurance and eliminates the need to pay contributions to pension and unemployment insurance. In addition, you then have the choice between statutory and private health insurance.
Many part-time self-employed people wrongly assume that their private liability insurance will cover any damage. However, this is not the case. Therefore, in certain cases it may be advisable to take out additional company insurance, such as company liability insurance. This insurance covers damage caused to third parties as a result of property damage, financial loss or personal injury. For certain jobs, for example, in the security industry, you are required by law to take out professional indemnity insurance.
If you work as a part-time self-employed person, you do not have to pay any additional social security contributions. However, you should definitely contact your health insurance provider as your income from your secondary job is also used to calculate your contribution. Otherwise, additional charges may be incurred. If you want to become part-time self-employed as a student, you should also contact your health insurance provider.
As soon as your part-time self-employment becomes full-time (in terms of income and/or working hours), you can apply for self-employment. This exempts you from compulsory insurance and eliminates the need to pay contributions to pension and unemployment insurance. In addition, you then have the choice between statutory and private health insurance.
Many part-time self-employed people wrongly assume that their private liability insurance will cover any damage. However, this is not the case. Therefore, in certain cases it may be advisable to take out additional company insurance, such as company liability insurance. This insurance covers damage caused to third parties as a result of property damage, financial loss or personal injury. For certain jobs, for example, in the security industry, you are required by law to take out professional indemnity insurance.
Almost done! Before you can get started with your part-time self-employment, you need to address the topic of taxes. It should be noted that part-time entrepreneurs as well as full-time entrepreneurs must state their income on their tax return. The type of taxation depends on the legal form of the side hustle business. Sole traders or partnerships have to pay income, turnover and trade tax, while corporations pay corporate income tax instead of income tax. Freelancers must calculate their profit by means of an income and expenditure statement and submit an income tax return.
Almost done! Before you can get started with your part-time self-employment, you need to address the topic of taxes. It should be noted that part-time entrepreneurs as well as full-time entrepreneurs must state their income on their tax return. The type of taxation depends on the legal form of the side hustle business. Sole traders or partnerships have to pay income, turnover and trade tax, while corporations pay corporate income tax instead of income tax. Freelancers must calculate their profit by means of an income and expenditure statement and submit an income tax return.
Finally, it is advisable to pay close attention to the issue of financing because if you forget important points in financial planning, costs can explode quickly. Fortunately, there are numerous funding programmes that provide financing in the case of a side hustle business. The "ERP-Gründerkredit – StartGeld" is an example of a start-up loan that offers business start-ups good opportunities to cover the costs that they incur.
In addition, in many federal states there are grants for the preparation of a business plan. Up to 70 percent of the costs can be reimbursed here. It is therefore worthwhile paying close attention to the various funding options in order to receive financial support for your own project.
Finally, it is advisable to pay close attention to the issue of financing because if you forget important points in financial planning, costs can explode quickly. Fortunately, there are numerous funding programmes that provide financing in the case of a side hustle business. The "ERP-Gründerkredit – StartGeld" is an example of a start-up loan that offers business start-ups good opportunities to cover the costs that they incur.
In addition, in many federal states there are grants for the preparation of a business plan. Up to 70 percent of the costs can be reimbursed here. It is therefore worthwhile paying close attention to the various funding options in order to receive financial support for your own project.
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