The Covid-19 pandemic has forced most people to change the way they handle their finances. As some companies laid off workers, others cut salaries in order to stay afloat. This among other reasons has pushed people to quickly think of other income streams in order to survive.
For many workers who have dreamt of doing business as a side hustle, the Covid-19 pandemic only accelerated their thoughts.
For several workers, these are unprecedented times. Some have started adjusting their expenditure while others have diversified into other ventures to supplement their income.
Business experts say this was long overdue. They ought to have done this before the pandemic. During an online engagement organised by the National Social Security Fund (NSSF), on alternative income options for corporate employees, Mr Everest Kayondo, the chairperson of Kampala City Traders Association (KACITA), one of the panelists justifies the need for corporates to set their priorities from the start.
Balancing between the two
Mr Kayondo gives an example of himself. Despite all the privileges that come with teaching in a government aided school at King’s College Budo, he opted to teach at Masaka Secondary School, why?
He weighed the options. At Budo, he was going to be far away from his town home, that is Masaka. Going to Budo required him to relocate. Back home in Masaka, he says it was going to be easy for him to juggle as teacher and businessman, an opportunity he would have missed had he chosen to go to Budo.
Mr Kayondo is a successful renowned business man in Kampala City and the chairperson of KACITA.
He asked for a flexible schedule that would give him time for his business, which helped him nurture his business.
Mr Kayondo warns corporates against starting businesses they cannot supervise.
“Like any business proprietor, you need to give your business time to monitor it so that you do not invest your money in a business and at the end of the day you do not get any return on investment,” Mr Kayondo says.
Follow up all records, check the stock cards, records of sales and all bank statements and bank reconciliation to avoid fraud from the people who are helping you run your side hustle.
He warns, “They are very smart people out there who will convince you to involve in all sorts of business to make quick money but when they are only targeting your money. If possible, do not risk trying to venture in pyramid schemes like many corporate people have been duped through pyramid schemes. Work your money in genuine ways by monitoring your sales of your business and the cash inflows. Before you start any business, research about it.”
Proximity is key, he says, adding, “This helps you monitor your business.”
As you think about running a side business, invest 30 per cent of your savings and start when you are ready.
“Start up something that you will nurture to grow into something bigger because if you do not push it to grow, it will die. Accept growth with systems in place that will help you monitor your line of sales and stocks,” Mr Kayondo says.
“Concentration growth is very vital. First concentrate in the same line of trade until you get your investment returns,” he adds.
According to statistics from NSSF, about 39 per cent of businesses started by corporates have failed, about 52 per cent are still struggling, 13 per cent have got their return on investment and only 11 per cent have succeeded.
This is partly attributed to some of the traits mentioned by Mr Kayondo on how one can do a side business along their jobs.
According to Ms Barbara Nkutu, an investment advisor and financial coach, says: “We have eight hours of working and eight for resting, meaning we have extra 16 hours. What do you do in them? Why don’t you use that time to pursue you side business or any activity that can fetch you money apart from your salary?”
The challenge comes in when people wait for their NSSF savings to invest.
“Why do people wait for their 5 per cent savings from NSSF and they think of starting to invest their money? What happens to the rest of their salaries before they clock retirement age?” Ms Nkutu questioned.
Not everyone is a business person.
“As a corporate person, do not commit yourself if your business is not a long-term venture. You must have the ability to go long-term. Profits and risks are correlated. The higher the risks, the higher the profits. So only those who are ready to take risks in business will manage,” Ms Nkutu says.
Business is not the only way to make money. Each one has versatile skills he or she can utilise to make money alongside a salary or look at other investment options.
“You can invest in Treasury bills and stock exchange markets. These are things that are familiar with people in the corporate world. You can invest in real estate but make sure you supervise the rent fees,” she says.