In any crisis there is opportunity.
Lockdown created new market opportunities as customers became open to trying new brands through e-commerce.
Research has already identified that post lockdown, people are less likely to return to major shopping centres, preferring to stick to their smaller local shops and online suppliers.
This creates opportunities for small online businesses which can flourish without the overheads of rental space and large stock holding. Now could be a great time to launch that business idea.
However, before you start a business, you need to do your homework, make sure you know whether this is going to provide you with a real income.
Understand your costs including your time, petrol and data costs for example. Far too often people realise too late that the business is actually costing them money.
Make sure you have a bank account for the business to keep it separate from your personal finances. If you keep treating your business as an emergency fund to pay for ad-hoc personal bills, it will be difficult to get a handle on your profitability.
You can run the business as a sole proprietor without forming a Pty(Ltd) so you do not necessarily have to open a business bank account. A low-cost bank account will suffice if the business turnover is less than R1 million.
Also consider hiring a bookkeeper if the business can afford it, or investigate a proper accounting system. There are some good free accounting options that can simplify your admin, giving you more time to focus on selling.
Be aware of tax implications. If your business is structured as a Pty(Ltd) it would have its own tax number and tax liability. However, if you run it as a sole proprietor – or just as a side gig – then any profit would be added to your taxable income.
It is important to keep proper accounting records as you can deduct all business expenses from your income as well. This includes travel for deliveries, data, and input costs.
Decide what platform you want to use for your orders. Social media sites like FaceBook and Instagram offer great marketplace applications and many small businesses are using the WhatsApp business function to communicate with their clients.
Once your business is profitable, the most important thing to do with that extra cash it to have a goal for the profits you make, otherwise it just ends up in your household spending and you never feel the real benefit.
Whether you use it to pay down debt, start an investment or just use it towards your holiday fund, make that side hustle work for you.