Since the financial crisis, there has been a big trend in the US that many are trying to create so-called side hustles , that is, small side businesses. The idea is to secure more income than those who come from more typical employment, this to get a more robust economy.
This thinking has in some parts also come to Sweden. However, for many of the Swedes who start their own business, it is often the opportunity to coin a hobby that attracts. Not infrequently there is also an idea that an extra income can mean that you can more easily afford to pay, for example, the holiday trip.
What should you focus on?
You can create a side business within just about anything, as long as the business is legal. Actually, it is only the imagination that sets the boundaries. You can sell your time and / or your knowledge. You can sell goods both in the real world and online. You can rent out property and even act as a driver for a fee.
There are some areas that are more popular today than others when it comes to new page businesses. What is perhaps most important in the call is about activities with blogs or social media as a platform. Starting a blog and earning revenue for example through advertising or so-called affiliate programs is one way many choose to start building a site business for more revenue.
Many people think it is tricky to get started with a side business
The idea is that you have to arrange various registrations and permits, and that you basically have to start paying tax before you even get started. That is not really the case. There is an opportunity to get started right away by doing the side business as a hobby business.
The rules for hobby activities are considerably less extensive than they are for entrepreneurship, but there are a few things to keep in mind.
Hobby is a side business that you do in your spare time and it must not be a major supply.
- You should tax for all the profits you make.
- You have a so-called listing obligation (a simpler form of accounting).
- If the side business is considered to be of more lasting and greater scope, the rules on hobby activities do not apply – then you conduct business activities instead.
For more information on hobby activities, you can take a closer look at the Swedish Tax Agency’s rules which you can find here.
Another alternative is to perform assignments and pay through a self-employment company. The business concept for these companies, of which there are a handful larger in Sweden, is to simplify for those who do not run companies to charge customers. It does not matter if it is about individual assignments or more extensive activities. If you go through a self-employment company, it is the company that handles everything about taxes and employer contributions. You also do not need to post or prepare financial statements.
Individual company and limited company
If your side business carries on, it will sooner or later become mandatory to continue the business within the framework of an individual company or limited company. There are advantages and disadvantages to both alternatives, but for smaller businesses that run smaller businesses, individual companies should be the first choice.
One reason is that no start-up capital is required to get started (for a limited company, an investment of USD 50,000 is required). Another reason is that it is much easier to liquidate an individual company if it becomes relevant. At a later stage it is quite possible to move a business from a single company to a limited company in a fairly simple way.
If you run an individual company or limited company there are a number of rules that you are obliged to know. Above all, it is important that you keep regular accounts and pay taxes on time. You can advantageously hire an accounting consultant to make sure everything is done correctly.