Starting A Side Hustle, Here are 5 Sources of Funds

Featured

Some people are multi-talented and as such cannot stick to one job-hustle-duty. Still yet, others are forced to hold multiple jobs of create additional sources of income to supplement their income and meet their living expenses. Whatever your reason may be, the side hustle has become a fixture and norm in our lives today. We live in a world today where not monetizing your passion is very detrimental. Cue in the side hustle. What makes a side hustle peculiar is the fact that it’s run alongside your day job or main hustle. Its main aim is either to supplement income or to fuel a passion. Regardless of its reason; the side hustle like every business venture needs money is to thrive.

Sourcing for capital is a pain, particularly in Nigeria where you have to go through hoops with the banks and the interest rate is KILLING! There are some other sources of funds though, and regardless of what stage your business is at: Seed stage (start-up phase) or growth stage (scale an existing business); cash is important.

In order to ensure you don’t inadvertently kill your business with a cash injection from an unwise or expensive source, here are a few pointers on sources of funds to fuel your side hustle or business.

  • Savings

A large proportion of businesses in Nigeria are funded from personal savings. However, DO NOT INVEST ALL YOUR SAVINGS in your side hustle. Being that our society doesn’t have the safety net available in developed countries by way of health insurance, etc. It is advisable that you ALWAYS have back-up funds for emergencies, so you cannot afford to invest all of your savings in a business. Particularly because there’s a risk as with all business ventures, it can go south. Savings is however an interest free, stress free means of cash inflow.

My advice though is to treat whatever funds you inject into your business as an investment. Have a payback/ dividend plan, treat it as business funds and ALWAYS ensure you keep your personal funds separate from the business funds.  

  • Family and friends

Another source of funds is your family and friends. This source of funds will most likely be low-interest or interest free. However, as with all sources of income, we need to be careful as to the terms of repayment. Do not promise and unachievable payback period as that would have ruined the relationship. Do not also take your family and friends for granted; be honorable. And if they would rather treat the funds as investment for equity- be smart and business minded. Don’t be sentimental. Don’t sign over shares in your company for less than its market value due to sentimentality. And….. My personal favorite; always include a buy-back clause with every equity transaction.

  • Customers

Your customers are your cheapest source of funds. If you have customers willing to pay upfront for goods and services; that’s a great way to fund your business. Reputation however is everything. Do not accept payment for goods and/or services which you are unable to deliver. With Social media, there is no hiding place for bad service. You can find your business in ruins due to one bad customer review.

  • Grants

They are a number of local and international organisations willing to provide grants to SMEs. Do your research and apply accordingly. Some are grants with no refund needed, while others are meant to be refunded. Whichever you get, do ensure you read the terms and conditions and abide by them strictly. You won’t want your budding business to be associated with an organisation of questionable character, will you?  

  • Loans or equity

These can be bank or VC loans or investors funding your business in exchange for equity. With these, you have to be really smart and have a professional look over the terms and conditions. Even if you are one yourself, there is the value in having an independent agent look over the terms to ensure they are fair. Your sentimentality might cloud your objectivity, your desperation and passion might also cloud your objectivity. Have a professional look over T’s & C’s. Ensure it’s not a cash injection that may end up crippling the business.

Beyond the 5 options identified above, there may be some other funding options available to you. What’s important is that regardless of your source of funds, if there are conditions; ensure it’s looked over by a lawyer, to ensure its fairness and that it will stand the highest legal scrutiny.

Also, like I said above, if for any reason cash is being exchanged for equity; always include a buy back clause lest your company ends up in another’s hands against your will.    

As the year ends, some of us are already thinking and documenting our plans for 2020 and beyond (#teamresolution), others are making plans on how to scale their business. if your 2020 plan includes starting or scaling a side hustle, this article is for you. I will probably share another article on how to merge a main and side hustle seamlessly sometime in the future.

Asides the sources identified above, are there other sources of funds open to SMEs, please share with us.

Image credit: Google.com

Accept Changes and Stop Tracking

Featured

The danger of Ineffective Communication

A colleague (madam) sent me a document which I reviewed, tracking changes. I sent the document back asking that madam review document to see changes I made, accept changes, stop tracking and send back.

Madam reported to our Line Manager, complaining on how nothing she does is ever good enough. On further probing, she cited the last mail I sent and said she had researched the meaning of ‘accept changes and stop tracking’ and it means she isn’t good enough.

After moving past the horror of what search terms could produce such results, our Line Manager had a serious conversation with madam; firstly, she sent out an unformatted document filled with errors, and is now crying foul after some review has been done for her and all she needs do is accept changes and stop tracking. It was clear there were some performance deficiencies such that madam’s feedback couldn’t even be clearly interpreted. Madam was advised to work on self-development which will aid career progression.

The teachable moment for me was that clearly I hadn’t communicated. Yes, there’s the skill deficiency issue, however, I also fell afoul of the biggest communication problem- which is the assumption that communication has taken place – George Bernard Shaw. I assumed I had passed a message, but I had not. In discussing this, I realized this is a very common communication problem.

Often, we find ourselves either speaking over the top of people’s heads with them trying to catch-up or on the flip side having to over-explain. It apparently doesn’t come natural to be able to explain in the right language and right terms such that there’s no question as to the meaning of the message. People and organisations that excel skill have had to hone the skill. However, it is an important skill nonetheless, as a lot rises and falls on communication- or a lack of it.

Due to my own recent mishap, I had to refresh my communication skills and here are a few pointers to aid official communication:

  1. Always be courteous but concise

Always be your best self; be polite and politically correct. Even with colleagues whom you are familiar with, be polite and with colleagues whom there might be some friction between you- be even more polite.

Eliminate endearments, keep familiarity to the minimum. Eliminate anything that can be misconstrued. Go straight to the point, don’t dither. Always assume the receiver is receiving the message- regardless of the means- in the midst of a very busy work day. Therefore, be brief and concise.

Even when emotions are running high and/or you don’t feel like it, be polite. Learn the art of politely telling people off courteously.

  • Plan

As with everything, planning is important. With official communication, you will need to plan what you want to say; to ensure it’s communicating the right message and it answers most questions that could arise. Planning official communication will ensure you do not have avoidable mistakes, faux pas, or that you aren’t caught unawares. We all have heard the saying ‘whatever you say will be used against you’, we are also familiar with the caveat when we call helpdesk lines that the call is being monitored for ‘training’ purposes. Always have these two statements at the back of your mind when communicating officially.  Don’t wing it. No matter how good an orator you might be, Do NoT Wing IT! Think before you speak.

  • Review for content, context, errors and language

Probably the most important and tiring job we do is revision, its common place to see a document having different editions until the final edition (well, final for the time being). This happens in order to ensure that we get the content right such that it’s relevant to the targeted audience at and that time. Imagine sending out a beautifully crafted holiday email after the holiday!

Content and context are important because therein lies the meat of the message. Language of delivery is also important- this has to do with both language and lingo. If the message is in English but the audience only speaks Swahili, you will need to translate. If you are speaking legalese terms to a room of Pharmacists; you will need to break down certain terms. Same way a sentence might suffice for a PhD holder, but you may need a paragraph of more sentences to explain to O’level holders.

Ensure your message has the right content and situate it within the right context.

  • Put yourself in the audience’s shoes

Sometimes, a lot of times, you need to put yourself in your audience’s shoes and pull off yours. Reason is- you the originator of the message probably have some background such that with just a few choice words you would understand the message, majority of your audience might not be at the same level of comprehension. So, you need to tailor the message such that the audience will understand and it conveys the intended message. 

  • Always ask for feedback

Feedback is the food of champions. For every official communication, where its most likely that not all of the recipients will understand the message, you need to always provide room for questions, feedback, or in a one-on-one scenario you could always ask the other party to explain what has been communicated in his/her own words. What is important is that with each mode of communication ALWAYS ask for feedback. Never assume the message has been lucid enough; never assume communication has taken place. Always confirm.

With official communication- verbal or written, always assume Big Brother is watching, always assume someone is listening, blind-copied or the email will be forwarded or someone is recording the conversation and if you will need to explain it; Do NoT Say IT! Do Not Write IT!