Why acting CEOs are seldom confirmed
By Samson Osero
In recent decades, more working people are engaging in side hustles for a number of reasons.
The most cited one is depressing economic times in which monthly salaries do not balance with living expenses. Retrenchment sprees continue to ring wake-up calls for alternative sources of income.
Despite the reasons, employees are apprehensive of venturing into the growing small enterprise sector.
Yet this sector can become not only one’s soft landing but also a launching pad for enterprise development.
Here are some of the factors to be considered while mulling over starting a viable side hustle to meet one’s aspirations.
A side hustle should be grounded on a business idea with potential to generate revenue, meet operational expenses and earn profit for the owner. The world of business is flooded with many business ideas that are waiting to be converted into lucrative side hustles.
As a beginner on business matter, choose a side hustle that is based on your technical skills and expertise. Hobbies can be converted into money spinners. Ideas may originate from local information on highly demanded goods or service which current competitors cannot meet. Others are products or services which the competition is ill-prepared to offer the high-end market segment.
The internet is another rich source of ideas for income streams one could undertake during free time using a smart phone. Relying on other people’s recommended ideas without subjecting them to a viability litmus test would cause future regrets. Scout for as many ideas as possible out of which you can select one for business viability evaluation.
The essence of a side hustle is to exchange goods or services to receive money for business and personal purposes. Products or services with a ready and growing market would sustain business operations. Conduct a market survey to confirm whether your business idea shall command and retain enough customers.
People are easily attracted to businesses which others front as profitable without checking out the size of the existing market. Business closures in a particular industry may be a signal of a diminishing market with no room for new entrants.
Understand the nature of the market for your proposed products or services. A seasonal or once-a-year demand for specific products does not justify a full-scale business enterprise unless they are offered among other items. Business ideas focused on single events will not support a side hustle to grow.
A business idea that has passed the market availability test should be subjected to the financial resources required to take it off the ground. Besides start up costs, there is need to estimate the cost of running the side hustle on its business delivery cycles.
For the required plant, machinery and equipment, consider the cost of leasing or purchase of second hand ones that are in good working conditions. The cost of outright purchase of new machinery can consume lots of money leaving little or none for business operations.
Prepare detailed worksheets on total start-up and running costs and compare them with money available for investment in the side hustle. In case the money is inadequate and financing the deficit from other sources is not possible, drop the business idea at this stage. An under-capitalised side hustle is a recipe for early business failure.
The success of a side hustle will depend on one’s business capability, among other factors. Knowledge and skills applied in full-time employment may not be sufficient for small business success. A side hustle owner wears many hats during the entry, development and growth phases of the enterprise.
Expose yourself to the kind of side hustle you intends to start to obtain hand-on experience. This opportunity would enable you to decide whether or not to pursue your business idea.
Those who intend to hire staff to run the side hustle whose operations they do not understand will be on the losing end. Understanding the dos and don’ts of the firms in your side hustle’s industry can equip you to effectively oversee your employees.
People have different values, beliefs and attitudes that would influence their choice of a side hustle. For example, staunch Christians would not open and run liquor businesses. Neither would professing Muslims operate pork-butcheries. Others may not want to be associated with integrity issues of people working in the supply chain of a particular industry.
Conflict of interest
Running a side hustle is susceptible to a wide array of conflicts of interest. Some employees have been accused of using the employers’ time for errands of their side hustles. Others have bid for pre-qualification as suppliers of goods and services for their employing organisations.
Venture into a side hustle that would not be in conflict with your ongoing employment. People who have ignored this advice have found themselves without employment when most needed.
The writer is HRD Consultant and Author of Transition into Retirement, [email protected]