Never Be In A Hurry To Start A Side Hustle
Starting a business can be very empowering and its quite normal to believe that failure can never be part of the bargain. It takes discipline not to wallow in this early euphoria and somewhat misguided optimism. Hence, the need to be cautious in ensuring you start your side business the right way.
In an unusual Nigerian fashion and against the current economic crunch that necessitates having multiple income streams, one must be careful not to be fixated on what works for another. It’s common place to find many Nigerians flocking in the same direction when it comes to exploring side business options. That said, you can still dare to be different.
In this piece, based on practical experiences joggling at least two businesses off and on full-time salaried jobs, I will be sharing useful tips on the ideal path to kicking off your side hustle. Applying these principles will help you coin your best approach based on the peculiarities of your planned business – and that’s if the plan doesn’t change after reading this.
For every business path you take, you will be going up against people who work full time and depend on the business to feed their families.
It’s about the Money NOT Passion
If you are lucky you can immediately make some good bucks from an activity you are passionate about, but that’s a rarity. Earning from your passion is by far the most exhilarating money making path. However, the entire concept of side hustle means you have a main gig and most likely without the luxury of time.
The most realistic side hustle is one which you optimize time to get the best results and visible earnings. While I am not discouraging plying the passion route, I must clearly state that true passion or talent needs to be nurtured overtime for value to be drawn. Remember that money is what you get in exchange for value. Even after grooming your skills or talent, you must have sellable products/services and know how to sell to make money.
Passive or Active income?
The core difference between a passive and an active income is how much of your physical presence or effort/time is critical to the success of the business. An example of a passive income is trading in stocks or cryptocurrencies. Both hardly require one’s physical presence or maximum effort. Passive income is almost always about leveraging on the time and effort of others.
On the flipside, regardless of how most billion dollar empires started, growth became a reality when these organizations generated active income for their founders. Unlike passive income, active income requires your presence and effort. Like being a painter, a make up artist, a performer etc. Overtime, active income yields best returns at the expense of time.
In deciding to go passive or active, how much time do you have? Also ensure your side hustle doesn’t conflict with your main job or violate your contract/non-compete.
Invest Low, Learn and Grow
Regardless of the funds at your disposal, it’s best to invest low and start small. The big question is why? The answer is simply the need to understand your business and build resilience.
Businesses are built to succeed and they rightly should. However, not planning on how to address failure is one of the signs of faulty planning. With a 90% startup failure rate, the chances of failing as a new business is frankly more. It only makes sense to minimize losses (owing to failure) by starting with low capital investments and grow steady.
Have a clear ratio to Reinvest, Save and Spend
Ideally, early earnings from side hustle(s) shouldn’t be spent. Expunging spending from the above list will leave reinvesting and saving. I can’t quite give a one-size fits all ratio, but whatever ratio you decide on is subject to the peculiarities of your business. These includes, the proper investment cycles, seasonal effects on demand/supply, actul earnings and your differentiation strategy.
The 80/20 Pareto principle should rightly serve as motivation to invest back into the business. This rides on the fact that you can’t always accurately tell the 20% of all your reinvestment that will yield the favorable 80% outcome.
Pursue a Diversified Side Hustle Portfolio
Simply spread your eggs across several baskets.
The above is inherently a risk mitigation strategy. You increase the chances of making more money and learning more about business cutting across various disciplines. As a matter of fact, a diversified portfolio is a legitimate billionaire trait.
To be successful at this, the hack is leveraging on transferable skills horned from your career journey. A good example was how I kicked off a frame production business after years of building furniture.The entire essence of this is to shrink the learning curve required. This doesn’t guarantee a springboard effect, but it gives you a better standing going up against the competition and obstacles.
Bonus: Be a bamboo!
Before spending a dime, invest in having a solid foundation! Burrowing a leaf from how a typical bamboo tree’s 5-year growth isn’t visibe until it’s 6th year, grow your knowledge and skill depth before kicking off your side hustle.
For every business path you take, you will be going up against people who work full time and depend on the business to feed their families. So don’t expect a warm embrace or a cheer from the competition. The goal is to grab as much market share and grow from there. You may never have all the experience they have, so your best bet is outsmarting them. For you to stand a chance of making this happen, you must first invest in knowledge and growing relevant network.