When the hustle pays off
There was more to be said of the strange habit of creating more work yourself just because you like it, and yes that is the conclusion.
In the last edition we looked at the side hustle as a practise that should be considered for anyone looking to make ends meet. There was more to be said of the strange habit of creating more work yourself just because you like it, and yes that is the conclusion. It is completely proven with a study done by the Henley Business School right here in South Africa. The study was done in 2019 and released as a white paper on the future of work in South Africa by studying the Side Hustle Economy.
Now, before we continue, we would like to have a conclusion of what to do when the hustle pays off, when you have made it. But the real question is, how do you know that you have in fact, made it. There is no goal post or finish line and no one person’s experience will be the same. When looking at the government’s definition of micro, small and medium enterprises, one can certainly use that as a measuring stick. They removed the definitions that needed to clarify assets in the business as part of its size, the only remaining factors are turnover and number of employees that works full time. If you are a catering, accommodation, community, social or personal service with a turnover of R5 Million, then you are a micro business. Retail, agriculture, transport, and finance is at R7 Million and Mining, Construction and Wholesale is R10 -20 Million.
Having reached this milestone and being able to accurately describe yourself as a Micro Enterprise, this must surely mean you have made it. What are the options now? Looking at the study from Henley, when we all started out as side hustlers we had more than one hustle, in fact majority of responders in the study claimed to have more than 1 hustle after the 5th year of doing so and 45% of people hustling for 10 years or more have a second hustle. Obvious choice would be to diversify and start another hustle to one day turn into a micro enterprise.
What about the other part of the declaration by government about Micro Enterprises, Employees? One would think that having more hands-on deck makes the ship sail easier, faster with less CCMA cases. I am not convinced that it is and seems that this study confirms my suspicion to be true. Responders were asked about their working hours both being employed and after hour worked.
Turns out, side hustlers and side jobbers put in an average of 52 hours a week at their primal employer and an additional 17 and 25 hours respectively a week on the side job. That is a staggering 11 hours a day including weekends where normal full-time employees works a lazy 43 hours a week, 8.6 hours Monday to Friday. The question begs will employing someone to take this workload off me help the turnover. No. From the study, by employing someone will increase your side hustle revenue by only around 3% but somehow you will work +-8 hours more a week on your side hustle.
So, the only logic conclusion is to find another business and side hustle that one or find yourself in a partnership with like-minded people to take the business forward. Employing the 43 hours a week person is not in your best interest. If one person hustling on the side can make R5 Million turnover, surely two people can make it double.
Progress in your side business will be on you. Options to extend would be diversification into other markets or targeting a geographically new area.
Diversification:
Along the road of self-employment, on the corner of the next street, you will see a legion of opportunities for business and it will mostly be from your interaction during side hustles. Keep an open mind and options to venture in a different or additional market will be revealed. Most entrepreneurs are problems solvers and chance takers as it is.
Expansion:
Your unique products or skills is needed in other areas of the country or world. Look for partners in different but similar in size or demographically equal. If it is possible to supply products in those areas without a partner by means of a small logistics setup and ecommerce options, then try it first. It will not cost you as much time and money as commuting or employing someone in the area. If that area takes off start thinking of franchising and claiming royalties.
[flipbook pdf=”http://www.thelife.digital/tl/wp-content/uploads/2020/11/Side-Hustle-White-Paper-TG190719-min.pdf”]