Some estimates suggest that as many as 27% of working South Africans have some sort of side hustle, and this figure is likely to continue to grow, say Dr. Kerrin Myres and Dr. Anastacia Mamabolo, who hosted a GIBS Flash Forum on Side Hustles in April.
“A side hustle is generally defined as anything outside your main source of income that adds money to your life,” explains Nic Haralambous, entrepreneur and the author of How to Start a Side Hustle. “It is not a side hustle if you've raised funding so it can replace your job. That's a start-up. It is a side hustle if it adds to your main and existing income stream."
Another term for this is “hybrid entrepreneurship”. While this has traditionally been frowned upon by employers, emerging research suggests numerous benefits, not only for people running the side hustle but also for the companies they work for.
“I believe that anybody can be an entrepreneur – it’s not for the select few,” says Myres. “Everybody should do it, especially given the stage of development of our economy, and even more so in the context of the coronavirus pandemic. It’s almost your national duty to start a business. And how I started to get interested in the idea of side hustles was when I realised that this principle applies to people who are employees, as well as those who are not.”
It is a side hustle if it adds to your main and existing income stream.
Mamabolo says her interest in the subject was sparked by witnessing successful hybrid entrepreneurship as she researched her PhD topic, the human capital investments and skills specific to the different entrepreneurship phases. Given the uncertainty that the world is currently facing, she believes it is an ideal time for research into the positive spill-overs of hybrid entrepreneurship.
In their Flash Forum, the two women wanted to explore the theoretical and practical elements of hybrid entrepreneurship and focus on its benefits. They also invited two hybrid entrepreneurs to share their thoughts and lessons.
Tumelo Chaka is employed as head of sales: forex and investments at Nedbank Retail and Business and has two side hustles. He runs a clothing retail brand called B.Kind Always and invests in private agriculture businesses. He’s also a guest lecturer at GIBS and runs workshops and talks.
Adrian van Eeden, chief information officer at GIBS, started MindCraft Learning, a digital education organisation, with his wife, who now works for the business full-time.
Both Chaka and Van Eeden believe their side hustles have benefited them personally, from an improved sense of fulfilment to the ability to make a broader social impact, and a chance to use their full range of skills and learn new ones. They also say there are benefits to their employers, which include increased empathy for colleagues in other job functions, greater sensitivity towards stewarding resources well, and access to fresh creativity and innovation. Mamabolo suggests hybrid entrepreneurship can also contribute towards corporate entrepreneurship, which is increasingly emerging as playing a positive role in sustainable innovation
Interestingly, whereas the assumption tends to be that all hybrid entrepreneurs start businesses with the express goals of exiting their day jobs and/or earn millions in their own enterprises, many (including the two guests on the panel) have no plans to leave their employers. They feel they continue to add value in their jobs, and they are often motivated by non-financial aspects of their side hustle. Motivations might include creating jobs or contributing towards solving other societal needs, having an outlet to develop new skills or express creativity, or building a legacy.
It’s almost your national duty to start a business.
Why business needs to get behind side hustles
Myres believes that employers need to start embracing the idea of hybrid entrepreneurship. “The days of full-time employment with one employer for 50 years are over. We increasingly live in a gig economy, and we’re going to have to have multiple different careers, jobs and interests,” she says. “Taking that into account, the idea that employees should be dedicated to one employer 100% of the time starts to look very old-fashioned. We know that people live these ‘portfolio lives’, and that’s actually healthy and appropriate, but corporate policies and procedures haven’t really caught up with that thinking. Corporates are slow to change.”
Mamabolo adds that previously, not enough empirical data was available to show business that rather than dividing employees’ attention and loyalty, hybrid entrepreneurship can yield many benefits. Thankfully, this is changing, and this field of research is getting more attention. Now research needs to move to reality.
“To get companies on board, we need to start with raising awareness of the positive spill-overs,” says Mamabolo. “Corporates need to adapt to the shifting landscape. While they may be cautious about allowing side hustles, there’s room to run experimental programmes to encourage hybrid entrepreneurship.”
...the idea that employees should be dedicated to one employer 100% of the time starts to look very old-fashioned.
In fact, this approach is timelier than ever as many companies are asking people to take salary cuts or are reducing their working hours in the face of post-pandemic economic realities. Hybrid entrepreneurship programmes, from formal business incubation efforts to competitions or incentives, allow employees and employers one avenue to address these challenges.
For example, a company asking its people to take a 20% salary reduction might allow employees one day off per week in which to develop their own businesses. Myres suggests this could also be an opportunity to address supply chain and enterprise development goals. Side hustles don’t have to compete with the corporate employer’s goals – they could complement and support them.
Most companies already have non-compete policies and non-disclosure clauses in place to protect them, but as yet there are few actively encouraging employees to start a side hustle or supporting their employees in setting up their own personal projects. Yet those that do – such as Google – are acknowledged for their innovation and flexibility.
Myres and Mamabolo believe that as the world of work continues to change, this sort of active support of hybrid entrepreneurship could help organisations to position themselves as employers of choice while stimulating economic and social development.
Side hustles and savings
Dr. Adrian Saville, Professor of Economics, Finance and Strategy at GIBS and co-author of the Investec GIBS Savings Index, believes that side hustles have a role to play in improving South Africa’s savings rates and overall economic standings.
“Without the savings to fund growth or small business creation, we now sit with an unemployment rate of 30,1%, likely to rise to 40% as the impacts of Covid-19 are felt on businesses and jobs,” he says. “To add to this gloomy data, youth unemployment sits at a harrowing 59%, and per capita income is likely to fall by at least 10% this year. We also have payroll data coming through – the mood and circumstance are dark. In addition, liquidations data have been released – it’s behind the curve, but we have a sense of what’s on the way. It is seriously time for constructive thought into planning for a more sound and stable financial future. Businesses themselves may be forced to consider their own version of a side hustle.”
Saville notes that the first report of the Investec GIBS Index in 2015 demonstrated that country miracles don’t “just happen” but are created and crafted through carefully considered and designed policy, with saving and financial inclusion a cornerstone across countries and through time.
“In financial stress, there exists an opportunity to do something constructive that drives individuals to pursue a side hustle and build additional revenue streams that could potentially mitigate risk in the future. Resilience is best described as our bounce-back factor, but people need help with the ‘how’ at the moment,” adds René Grobler, head of Investec Cash Investments.
Starting a side hustle
Myres and Mamabolo suggest that employees considering a side hustle must consider the following:
· Look for opportunities aligned with your values (love what you do).
· Put your existing skills to good use, but in a way that doesn’t compete with your employer.
· Be prepared to experiment, especially given that you are more agile than your employers and a side hustle is a lower risk environment than a start-up.
· Be honest and transparent with your employers about your side hustle.
Additional practical tips for hybrid entrepreneurs from Saville and Haralambous include:
Moving beyond the idea
If you have an idea, that's fantastic. It is time to get over your fear of failure and start. If you do not have an idea, start by listing your skills. Write down absolutely anything that you think you are great at. Are you organised? Are you good at networking? Can you teach something to an audience? Write it down and start thinking of these skills as a product you can sell.
Success versus failure
It’s important to define success and failure for this side hustle. Do you want to make R5,000 a month extra income to add to your savings? Employ 20 people? Make 100 sales a year? Write that down and use it as your North Star. It's important to define failure, too, because you're going to have bumps in the road, and you must know if they are just speed bumps or mountains you aren't willing to climb.
Integration and honesty
Communication is a key part of starting a side hustle. Talk to your partner, friends and family and let them know that you may have slightly less time to allocate to activities because you want to build this new and fun thing on the side. Get them on board, or you'll have a rough time building this side hustle into your extra income stream.
Patience
There is no quick fix for a side hustle. Like anything else, it takes time, effort and consistency, and it needs to add to your life, not subtract from it. “But it is absolutely worth working towards as a positive outcome for your future, right now,” says Haralambous. This is definitely the most poignant time for people to start thinking about extra income streams, but the landscape is littered with false promises, so don’t expect immediate results.
Gallery
