and the Inland Revenue that you have a second job so that both your income tax and your national insurance can be correctly calculated. There is, for example, a limit on how much national insurance anyone has to pay on their salary so with two jobs – and two employers deducting it on behalf of the government – you could find yourself paying too much and then having to claim it back by filling in your own tax return. You also need to make sure you are paying the right amount of income tax. You get a personal allowance (an amount of income you don’t have to pay tax on) every year (£5,035 in 2006/7) but if you don’t let your employers know about each other you may find that they both give you the allowance, leaving you with a large bill to pay to the Inland Revenue later. If your second job means your total income is high enough to make you a higher rate income tax payer yet both your employers are only collecting lower rate payments the same could also be true. Make sure your employers know about each other and get you the right tax codes if you want to avoid any difficulties (see the Inland Revenue’s website, www.hmrc.gov.uk, for more on this).
Finally, before you take on a second job do make sure it is both possible and really worth it. Working two jobs isn’t easy so ask yourself a few things before you commit yourself to it. Will your main employer allow it? Many companies explicitly say in their contracts that employees are not allowed to take on any outside work at all, so, while you may think you can get away with it simply by not telling your main employer, taking on a second job might put your first one at risk. Do the sums really add up? You may need childcare, which could eat up much of the extra income, and if you are on any benefits you will find that as your income rises they fall. Making your own money rather than relying on the state (and effectively the largesse of other tax payers) sounds good in theory, but in practice it can be a tad exhausting. So check what will happen to any benefits or tax credits before you head out to work a second job.
Then you might think about whether you could look at your income equation the other way around. A study from Liverpool Victoria last year showed that over 40% of those with second jobs had taken them not to pay off debts or save for something special but just to meet their living expenses. However, perhaps instead of boosting your income to meet those expenses you could simply reduce the expenses. You probably think you can’t cut down, but most of us overspend, be it on shoes or insurance. A little time spent concentrating on cutting our costs can improve life immeasurably more than spending Friday and Saturday nights stuck behind a bar – and usually a lot faster too. See the next chapter for more on this.
Start your own business
All the things we’ve discussed in this chapter so far have been about how to increase your income in a marginal sort of a way – about adding 20% rather than about multiplying it by ten. But most of us secretly hope for a great deal more than that: we dream that one day we’ll be rich. Ideally, we’d like this to happen without us having to make much in the way of effort. That’s why every week 14 million of us buy tickets for the National Lottery. Sadly, playing the lottery is an absolutely hopeless way to get rich: every week about 13,999,999 of us don’t win a penny. So what’s a better way? A more realistic answer is to start your own business. One million women in the UK are self-employed and women now own a third of our small businesses. Following their lead isn’t easy and it certainly isn’t foolproof: a large percentage of small businesses fail in the first year and another large percentage struggle on for a few more years without ever making real money. But some will hit the big time.
Remember the story of the Body Shop? Thanks to having the right idea at the right time and working relentlessly to make her dream a reality Anita Roddick is now a millionaire many times over. The same is true of Julia Pankhurst, founder of Friends Reunited, a social networking website valued at many millions of pounds. And these extreme examples of success aside, there are thousands of other women around the country making good livings from their businesses.
One is my sister Tabitha. She has always found working for other people tricky and long had dreams of running her own company. So three years ago, at the age of 28, she started doing just that and launched her own accessories firm called Tabitha. She designed a collection of handbags, got them made up at a factory in east London and then spent the next few months schlepping from trade show to trade show selling them. Selling is one of the things she does best and within months she was deluged with orders. Today her bags are on the arms of many a celebrity (Danni Minogue is a big fan!), she manufactures her products in China and Brazil and her turnover in 2005 was nearly £750,000. She’s done extremely well and done it very quickly but, as she says, it really hasn’t been easy and it still isn’t – she seems to hit a new business-related crisis of some kind every week. For the last two years she has worked every hour possible; she has barely seen her friends and family; she hasn’t had time to have a proper boyfriend; and she has had to cede custody of her cats to an old flame as she has no time to look after them. Starting and running a small business is, she says, the hardest thing she has ever done and no one who isn’t ‘truly passionate’ about their product or idea should even consider following in her footsteps.
Her words are echoed by Caroline Bennett. Twelve years ago, Caroline, now 40, raised £90,000 and opened a sushi bar called Moshi Moshi in Liverpool Street in London. Years of hard slog later she has two more restaurants. Moshi Moshi turns over nearly £3 million a year and produces profits of several hundred thousand pounds a year. Smaller scale, but getting there, is the firm launched in 2001 by Australian Ashe Peacock. Antipodium is dedicated to Australian fashion with a shop in Soho but Ashe also does PR for Australian brands in the UK and wholesales their products into other retail outlets here. She now has eight staff in London and turns over a few hundred thousand pounds a year.
So how can you have a go at following in their footsteps? I’ve asked Caroline, Tabitha and Ashe for their top tips and summarized them below.
1 Don’t start a business unless you really want to do it. If you don’t want it enough you won’t be able to cope with the long hours, the financial difficulties and the utter lack of time for anything not related to your work. It just isn’t enough to like handbags to start a handbag business and liking sushi isn’t enough to give you the drive to launch a restaurant chain.
2 Research, research, research. Your idea may sound good to you but is there really a gap in the market? Make a proper business plan showing exactly how you imagine your project will develop. How big is the market? Who are the competitors? How big can you grow? What are the potential weaknesses? What are the costs likely to be? ‘I didn’t do a proper business plan,’ says Tabitha. ‘I thought I’d just figure it out as I went along. Big mistake. Without set targets and proper pre-planning the business was a huge mess by the end of the first year.’ NatWest has a free online advice programme to teach entrepreneurs about planning and conducting market research. See www.natwest.com/newbusiness.
3 Get all the advice you can. If you go it alone you have a 40% chance of succeeding but if you join a mentoring scheme of some kind those odds improve to 50%. But never forget it’s your business. Everyone has an opinion and likes to offer advice, says Tabitha. ‘Listen but stay focused on what you want and go with your gut instinct.’ You’re the one who will end up dealing with the consequences of your actions so all the final decisions have to be yours.
4 ‘Take full responsibility for everything,’ says Ashe. If you start a fashion business ‘you don’t just get to play around with dresses’. You have to understand all the boring bits too. If you don’t do your own book-keeping you won’t make it. ‘I’ve learned the hard way that no one else will do things as carefully as you, so you have to be qualified to supervise everyone who works for you on every level.’
5 Understand that employees and friends are different things. However much you convince yourself that having friends working with you or for you will work, says
