As a young working professional, I’ve made a lot of silly financial mistakes over the years, living beyond my financial means and accumulated a lot of debt i.e. credit card and personal loans.
Desperate to pay off the debt, I started a number of side hustles i.e. lecturing Tourism Management on a part-time basis at the National University of Lesotho’s Institute of Extra Mural Activities (IEMS), corporate MC’ing events and most recently launching my ice business.
The goal was to generate additional sources of income to pay off my debt. At first, I struggled to start, because I suffered from the imposter syndrome and I had a lot of self-doubt. I constantly asked myself “am I good enough?”
This was then followed by another set of challenges for example, how to determine my rate card for my services and capital required to start the business i.e. MC’ing services and ice business. Eventually, I started and experienced many challenges along the way; including the impact of COVID’19.
The disruption of the nationwide lockdown and ongoing COVID’19 pandemic is a rude awakening that we cannot rely on only one source of income. Over the last 3 months (April to June 2020) many people have lost their primary source of income as a result of the lockdown and closed borders, leaving them in financial distress.
My conversations with different people over the last few weeks centred on “how can I start a side hustle?” “Where do I even start?” “What should I look out for? If there’s ever a time the message “multiple your sources of income” should be emphasized, it is definitely now.
In this article I will focus on three key factors to consider when starting your side hustle and hopefully help you take that leap of faith to launch your business.
Identify what you are good at and START!
I am of the view that the biggest challenge many people face is starting anything. People have the right intentions to start, for example, “I want to be healthier” “I want to save more” or “I want to pursue my hobby”.
However, the challenge is that many lack the will power to implement the changes that will help them to achieve their goals e.g. waking up at 5am to go to the gym or cutting down spending to increase savings. The consequence is that nothing ever gets done and a year later the conversation remains the same “How can I start a side hustle?”
The first step is to identify what you are passionate about and determine if you can monetize it. A good starting point can be your hobbies for example, baking, cooking, singing or playing sport to name a few. Instead of cooking only for yourself, find someone who cannot cook, needs to eat and who is willing to pay you.
Another example to consider is focus on your knowledge, skills and experience. As an Accountant, Lawyer or Data Analyst for example, how can you use your skills and knowledge to help a small business and/or client with their needs and charge for the service?
Perhaps you have some depth of expertise in Mathematics, Literature or Economics. Can you consider offering online tutoring lessons for students who want to pass and are willing to pay? I can mention several examples, but what’s important is to identify what you can monetize and start. Like Naval Ravikant says ‘the only way to truly learn something is by doing it. Yes listen to guidance but don’t wait.”
Create a market and grow it
Depending on whether you offer a product or service, the second step is to determine who your customers are, how you take them on a customer journey, build a community and add value. The customer experience at all touch points is extremely important.
It is paramount to ask yourself some key questions such as “how am I adding value?”, “how do I create an experience for my customers”. Often times, we design products or services that are about us and forget to design with the customer in mind.
Therefore, it is important to engage with your customers regularly, listen to them, and get insights and feedback. This will help you refine your product or service, so invest time talking to your customers because they will help you grow your side hustle.
Keep records and manage finances
One of my biggest takeaways from a recent webinar in June 2020 hosted by Pesa Savvy, a Kenya based company, is the importance of keeping business records and separating your personal income from the business income. Often times, people do not view their side hustles as businesses which is very myopic.
Keeping business records helps you determine the financial health of the business i.e. revenue, costs, profitability and cash flow. These indicators help to track if the business is growing or not.
Another important consideration many people overlook is opening an account for the side hustle. Having a separate account helps you to manage the business finances better and minimise the temptation of using the business income for personal reasons. Equally important is to consider the structure of your side hustle e.g. Sole proprietor or private company and to be to be cognisant of the potential tax implications.
As someone who has started a few side hustles – some of which have failed and succeeded, I’ve learnt valuable lessons from my journey and also achieved a few of my financial goals. Initially, I was hesitant to start because I was afraid of failing. It took courage to start and overcome the fear.
I’d like to encourage you to also start. Like Martin Luther King says “Take the first step in faith, you don’t have to see the whole staircase. Just take the first step”
So take that step and start!