I was recently at the office of my friend Layla who is a bank manager. After talking official business, she mentioned that she is thinking of purchasing three motorbikes and starting a courier-service business.
In 2009, Phil Dumontet, a 22-year-old American had a similar idea. But unlike Layla, he wanted to deliver food using bicycles, not motorbikes. So, he started with his own trek mountain bike. With that single bike, he started making deliveries for an Italian restaurant known as Maurizio’s. That single-bike delivery has since given birth to a mammoth company that now provides rapid delivery for over 800 restaurants and is making millions of dollars every year. The company is known as Dashed, since its competitive advantage is speed.
It is possible for my friend Layla to follow in the footsteps of Phil. Her well-thought side hustle can eventually develop into her main occupation. It is a long, partly torturous but mostly fulfilling journey. Every enterprising Kenyan can go on this journey successfully by following these signposts. Capital. This is the first signpost that you will find. Capital is the foundation upon which a business is built. Most micro and small medium enterprises are never able to proceed beyond this signpost.
According to the Central Bank of Kenya, SMEs contribute nearly 30 per cent of Kenya’s GDP. Unfortunately, about 46 per cent of Kenyan SMEs close within a year of establishment while another 15 per cent collapse the second year. Many fall because of insufficient capital to continue building their businesses.
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During formative stages of a business, most people rely on their savings, family and friends to fund their businesses. While capital drawn from such personal sources, will kick-start business, you must make plans for additional capital for growth.
To spare your business from being weighed down by debt, avoid expensive credit. Your source of credit should be as cheap as possible. Unknown to many, the Government offers a low-interest credit through the Micro and Small Enterprise Authority. In addition, you can also access affordable loans through Stawi, a government-led, mobile-based credit scheme that is set to improve access to credit for SMEs.
Further, you can recapitalise your business through funding from these public sources: The Youth Enterprise Development Fund, Uwezo Fund, Women Enterprise Fund, the Industrial and Commercial Development Corporation, Kenya Industrial Estates and Industrial Development Bank. Market. This is a critical signpost on the road of transforming side hustles into main occupation. Dwindling markets are toxic for side hustles. I have learned from my three decades of business at the highest level that an entrepreneur must always take steps that define and expand their market reach. Know your market, then keep expanding it, inch by inch.
If you don’t do that, your market will start dwindling and automatically roast your business. Great products. This is another highly critical signpost. Great products solve problems. If your product is not really solving a pressing problem, then it may not be a great product and it will be difficult to expand its market. For instance, if your side hustle is to sell vegetables from the boot of your car, then you are providing vegetable solutions to passers-by.
If you however start selling those vegetables both from the boot of your car and the mobile phones of people, then you are solving both their vegetable problem and time problem. They don’t have to come to your car for the vegetables because they can select online then you will deliver to their doorsteps. Great products provide great solutions for several problems. Turn your product from a good or mediocre product into a great product and you will see your market reach expanding.
Consistency. For a side hustle to turn into a main occupation, you must be like Eliud Kipchoge and just keep running. Do so during the great days of running a marathon below two hours and also during the bad days when you come in eighth in a marathon everyone expected you to win. Keep running. Keep selling that product. Keep planning and learning from your mistakes. Keep expanding your market. Keep searching for new capital and build a great team.
Keep meticulous records of the expenditures and revenue. In the case of Layla, if such focus starts affecting your productivity at your current job, quit while at your best! If you do so, your side hustle will eventually storm into the centre and become your main occupation. Think green, act green!
-The writer is founder of Green Africa Foundation. www.isaackalua.co.ke