• Dealing with taxation and the contacts you gain will be useful later
It's easy to look at successful entrepreneurs and believe they have always been rich. Many started from humble origins. The lessons they gained in those early years gave them the experience to launch into the lives they enjoy today.
Of course, there's always a little bit of luck and high-level connections along the way, but opportunity generally favours those well prepared for it. Many Kenyan tycoons started with small businesses: retail shops, vegetable stands, chicken hawking, selling insurance and public transport, among other occupations. Despite being billionaires, some of these individuals still run their old businesses.
If you come across a large amount of money and then start a business without any experience, you will most likely fail. It is better to learn the ropes of business at a small scale, where mistakes will not destroy your finances. That is why people in employment are encouraged to at least start a side hustle. It may not make you lots of money right away, but it will give you the experience you need for the future.
What does running a small-scale business teach entrepreneurs?
1. Marketing, sales and customer service: Whatever business you venture into, there are bound to be other people already doing it. You must work hard to attract customers for your business to thrive. Customer service theory suggests the customer is always right, but this isn't always the case. Beware of fraudsters and nagging customers.
2. Patience: You will not make a profit immediately you get into business. Persistence and constant learning will eventually produce results. Along the way, be ready to try out new ways of doing things if your initial approach did not work. You should set a limit to how many losses you can sustain. If the business isn't generating money after a reasonable time, try something else.
3. People management: You will have to learn how to manage employees. Each individual comes with different skills, levels of confidence and temperament. Some employees may appear incompetent but, with appropriate mentoring, they can become star performers. You will also have to learn how to handle conflict with employees and how to let go of unproductive individuals. In short, leadership skills are key.
4. Time management: The biggest advantage of running a business is that you work at your convenience. On the other hand, business success comes from showing up early each day regardless of the weather. You'll have to learn when to delegate some tasks to employees so you concentrate on activities that grow your business, such as looking for new customers.
5. Government relations: You cannot avoid dealing with government organisations on matters such as taxation, licences, professional certificates, building inspections, garbage collection, advertising and motor vehicle inspection. Even a small roadside kiosk must comply with relevant laws. That experience, and the contacts you gain in government bodies, will be useful when your business eventually grows.
All big things have humble beginnings. Don't dismiss the invaluable experience a side hustle gives you. It's an experience no amount of money can buy.