Many people have suffered as a result of the world health pandemic. Some have grappled with wage cuts while others have even been laid off. This has all occurred at a time that Kenya has been experiencing a slow economic growth. Looking to increase their revenue, many have looked to side businesses.
According to State of Side Hustle in Kenya 2020 by Viffaconsult, there has been an increase in entrepreneurs engaging in side businesses, with those between 21 and 25 years increasing by 12% while those between the age bracket of 41 and 50 years by 19%. Many of those who were surveyed, about 80%, indicated that increasing their income was main reason as they couldn’t meet their basic needs while others stated investment as their main aim.
Many are left to rely on the side businesses to survive in these tough economic times. To ensure success, it all boils to planning. It is important, for starter, to identify one’s goals for business, whether it will remain a side hustle or it will one day turn into a business venture you may want to solely and fully run? Regardless of the decision, it is important to ensure that one manages their business well by ensuring taxes are filed, books are in order and most of all that the customer is king.
To ensure that your side hustle flourishes, one may want to improve their management through;
Keep your books up to date
In order to ensure that your side hustle is able to grow it is important to have a firm handle on your records. Keeping your books up to date ensures that even in term of taxes, filing them becomes easy and accurate. It is important to ensure that operating costs, such as material costs, salaries, benefits, expenses including rent, advertising, and non-operating costs such taxes and interest, as well as stock, bank charges, commissions and training costs are always recorded.
With this understanding, one is also in a position to better price their products and services to ensure that they acquire their targeted projections or surpass them.
Separate personal from business affairs
When it comes to side businesses, many people avoid some aspects of business and thus end up in dilemma. For instance, a majority in the informal sector mostly mixes personal and business accounts. It is crucial that you do your side business with the utmost professionalism. One may want to ensure that they separate their personal affairs from the business. The two should be treated as separate entities to ensure growth.
Invest in accounting
Before the introduction of accounting software, a lot of human errors would lead to wrong statements and thus not reflect the real position of the company. However, with the accounting programs this has been reduced as they help one take charge. Ensuring that your books are up to date and accurate becomes easier. Also, it is crucial to help in terms of stock change. Analysis of one’s business is made easy and through this, one can be able to see their weaknesses thus having the chance to turn them to strengths.
Pay your taxes
It is not a surprise that many in Kenya do not keep track of taxes or file them, as many feel that once collected by the authorities, their taxes are not redirected to the economy so that they benefit. With rising debts, the government has increased its efforts towards tax collection as well as the taxes.
Kenya, for example, recently introduced the digital service tax this year that will see income from services provided through the digital marketplace in Kenya subject to tax. Also, many tend to have the mindset that when you file taxes, you are the one to pay the government always. However, in the case of V.A.T, for example, one is able to get a credit if purchases exceed the sales.
Before, many informal traders, freelancers, side hustlers and others would avoid filing and paying their taxes, although now may be the time to make a change before the law catches up with you.
Management of your side hustle is important; ensuring that the above are covered will give one better chances of success. Think about where you are spending your money, buy the right equipment as and when you need it, and use your accounting software so you can stay on track. If you are disciplined, then your side business will prosper and expand in no time.