So you have already identified a business idea to take on as your side hustle, you have also identified a market for your business, a location, you have the time, you have the skills and you have also set specific goals in mind but then you have no cash to start off. That’s like having a brand new car with fuel but with no wheels. Your car ain’t going no where just like your side hustle because money is the wheels by which your business ideas will run. To get the funds to start off may be a difficult task but not of you sit down and look at right places. You will realise you have plenty of places to get this money from. Try considering the following options;
1. Live below your means
First you need to look within for solutions then go out if you can’t find any. Solutions should start with you. That is why you need to start by minimizing your lifestyle. Live below your means. You can do this for a short period of time until you have enough cash to start your side hustle off but the best idea would be to continue with this habit even after you get the cash for your side hustle because living below your means is one of the good financial habits to develop. By minimizing your lifestyle, you will for sure have some money lying around. Set aside this cash. Save this cash until you have enough money and then use it as capital to start off.
If you don’t know how you can do this then you can start considering options like; moving to a cheaper house for the time being, using energy saving bulbs to save on energy, subscribing to a cheaper cell phone plan, using less expensive cleaning products, making your own coffee instead of buying the takeaway coffee, cycling or walking to work, sharing a ride with a friend or colleague instead of using public transport, spending less money on your grooming for a while, taking your own lunch to work instead of eating in hotels and restaurants, checking your insurance to make sure you have the best deals that you can manage, canceling some subscription like Netflix just for some time until you have enough capital. These are just a few options you can consider but there are a lot more options to put into consideration. Just write down all your expenses and review them looking for more ways in which you can reduce them further.
2. Use your savings
By now my hope is that you shall have heeded the advice of financial blogs, financial advisors and even friends that saving money is a good financial habit and that you have a savings account. If you’ve been saving and wondering when is the best time to use your savings then this is it. Wait no further. Withdraw the amount you need to start your side hustle off from your savings account then you can pay back the money with the money you realise as profit from your side gig. Tony Robins says, “save to invest,do not save to spend.” That is what we should all play by. If you have a savings account already set up in place then you are home and dry. If you don’t have one then you must be thinking, what now? Simple, start saving, it’s never too late to start. How are you going to do that fast and easily?
- Budget- know how much you have as income and also know what you are spending your money on. Write your expenses down and then try to eliminate those which are not very important from the list. The remaining ones you need to allocate each and every one of them a certain amount of money. Try to see if you can reduce the amount you are allocating each further. After doing that stick to whatever you planned.
- Set aside an emergency fund – This is to make sure that anything unexpected like unexpected travelling expenses, home and car repairs, health emergencies and stuff like that does not ruin your savings because you shall have money set aside for them.
- Live below your means – the money you realise from this put it in your savings account.
- Automate – have a particular amount of money deducted from your paycheck and deposited directly to your savings account. It is safe and eliminates any temptation of using money you ought to be saving.
These are just a few methods you can use to save some cash quickly. Once you have enough to use as capital, you can put it into business but continue with this saving habit.
3. Set aside some money you get from your primary job
A side hustle in simple terms is a job that you do on top of your primary job. That means that you keep doing whatever job you are doing and then maybe in your free time or in the evenings after coming from work or during the weekends you do an additional job. Now if you do not have capital yet you want to start a side hustle why don’t you consider taking a percentage of your paycheck and keeping it until you have enough to start you off? This must be a very difficult choice but that’s why we need people to sacrifice for the better. If you are willing and you don’t know how you can do this, why don’t you try the options below;
- Automate – You must be getting tired of reading about this in my articles, but there is a reason why it keeps on recurring. It is the best. Just like you did in saving, you can do the same here. Set a percentage of your paycheck to be deducted everytime you get a paycheck so that it is channeled directly to a specific account. So silent it is that you will not feel the pain of having to deposit the money yourself. It is safe and it does not give you any chance of using the money you ought to be saving.
- Prevent yourself from using some cash everytime you get a paycheck – if you feel insecure about automatically deducting money from your paycheck for whatever reason then you can consider not using some money from your paycheck. This is very difficult. Temptations of using this money may be so constant that you end up giving in and using the money. But if you are into this and the urge comes, please remind yourself why you are doing this.
I can’t think of any other ways you can do this but go for automation but if you have any other ways, you tell me I’ll add it.
4. Temporary side gigs
This sounds crazy, you must be asking yourself how and why should I take on a side gig to get capital for a side gig. You see there are several ways of making quick money even though the amount may be little. Hustling for your hustle may just be a way of raising capital. Some of the options you can consider to raise capital are;
- Online surveying – There are sites out here that do pay you for your opinions. Swagbucks, Survey Junkie, survey club, inbox dollars Vindale Research, Survey Club, Prize Rebel, PineCone Research, Branded Surveys are just a few sites willing to pay you for whatever answers you have in your mind. All you need to do is to create account and answer surveys so that you can earn. It is something you cannot get rich out of but you will earn something out of it. It requires a lot of time too but if you find yourself with a lot of free time in your hands you can consider this as an option. The money you get, keep it as capital.
- Sell used items online – like answering survey questions, there are a lot of sites that you can sell your used items but which are still in a good condition. All you need is a phone with good camera, the item you want to sell and an account. That dress that you bought but found out later it does not fit you well, those shoes that you overgrown without enjoying them, that outdated camera you have may just be what someone is looking for, that furniture you no longer find classy, that book you have read since you were in grade four might just be important to a grade four child as it was to you then. Anything you ain’t using but still has the new look can be sold on sites like; Amazon, Listia, iOffer, eBid, eBay, PigiaMe, Oodle, Bonanza. The list is endless. Sell them and use the money got as your capital.
- Driving for Uber or Lyft
- Tutoring Online
- Creating YouTube Tutorials
- Teaching a language
- Starting a blog
- Writing ebooks
- Become a virtual assistant
The list is endless, but the bottom line is; find a light and temporary job to do to raise capital for your main side hustle.
If you can’t minimize your lifestyle, you can’t set aside some money from your primary job, you don’t have any savings and you don’t want to take part in a temporary side gig to raise your capital, why don’t you ask for help? Put a hand out so that people may help. That friend of yours who always has some money on him, that uncle of yours who has heavily invested in real estates, that grandfather who has a lot of land, that aunt who works for a governmental organization, your nephew who always promised to support you, your sister, your elder brother, your father and mother, this may just be the time to ring their phones. Remind them of their promises if they made any, if they didn’t tell them you are in need of some help. If they want to know what help just be honest and tell them you want to start a business yet you don’t have the money to start. If they are people who understand they will give you some money. Those who don’t want to give you money for whatever reasons they have you should leave them alone, don’t force issues. Move to the next person. Once you have had enough you can start off.
So the people you have as friends and families cannot help you raise the money you require to start you off through donations for whatever reasons they have in mind so you need to think of other ways. Why not borrow the money so that you can pay them back once your business is up and running and also realising profit. You can sweeten the deal by offering to pay back with a little more than what they are giving you. There are several people or sources you can borrow money from without the bank acting as a middle man. Just you and them sitting down and agreeing like the gentlemen you are. Some options which you can consider include ;
- Your boss – Yes you heard me right. Your boss can be your saviour. So you are doing a primary job and you have some generous boss who is sweet to everyone who works under him or her. Why don’t you approach him and tell him or her you have this and that in mind but you cannot realise it because you do not have the cash. If he or she is an understanding fellow you will have the cash. You can agree with him or her to deduct a certain amount on your paycheck as payback to the money he or she gave you. If they don’t take it well then move on, there are a more options.
- Your friends and family- Your aunt, uncle, father, mother, sister, brother, anything family who is always loaded or that friend whose father is wealthy and always has cash or that friend who has a successful business and is making good money can come to your rescue. All you need to do is to pick up your phone, call them and tell them you want to start a business on the side but money is becoming an issue. Tell them the amount of money you need and see if they can bail you out. Offer to pay them even more the amount they are giving you. Sweeten the deal to even offering to pay back the money as first as possible. I would advice you to this face to face and not through the phone because that way you have a higher chance of convincing them. I’ve tried it, it works but you need to have a sugar coated tongue with ultra high convincing powers. People out here insecure on matters, money. Good luck with this!
- Chama– A chama is a swahili word for a group of people with a common course or goal who are bound together with something they have in common, say they are all teachers, church members, farmer, schoolmates, doctors, drivers who come together and start a union through which they can support each other financially, spiritually or even morally. Though they are mostly financial. They can set a required amount of money each member is supposed to contribute in a certain amount of time. This is agreed on by the members of the chama and can be daily, weekly, monthly or even annually. It’s basically a union. If you have such kind of groups, whatever you call them, you can borrow money from the chama and pay back later once your business is up and running.
- Colleague at work- You can also have your colleagues at work lending you some money which you will pay back.
There are a lot more options to consider as lenders but the above are just a few. Many people would not really be willing to lend their money for one reason or another, do understand them. Sometimes, like me, they have lended money to people who they trusted will pay them back only to wait but see nothing in return. Be good, once you get someone who lends you money please pay back because the person sacrificed a lot to give it to you plus it also shows you are an honest fellow.
7. Sell personal assets
If you have some assets say land, cars, houses blah blah blah, you can consider selling them to raise capital for your new business. This might be a very hard decision to make particularly if your asset is gaining value but you can make the hard decision for a better future.
If you have heard of crowdfunding then you know you can use it to raise some funds especially capital but if this is the first time you are hearing of it, crowdfunding is where a large number of people come together and raise small amounts of money to fund a particular project, company or business mainly through the internet. Many people come together via the internet and raise the capital needed to lift a business off the ground. These are called investors.
Several types of crowdfunding do exist like investment crowdfunding, debt crowdfunding, donation based crowdfunding, securities based crowdfunding, human capital crowdfunding just to mention a few.
Before people help you out you need to tell them what is your business idea, what are your goals, what is your business plan to reach those goals, how much do you want to raise, how much have you raised so far, what money will be used in starting off, how many people have invested so far in your idea, what will they get in return because it is their money they are risking for you among other things. Crowdfunding may be a fun way of getting started but it also has some of its benefits and shortcomings.
- It is more efficient compared to the traditional way of fundraising.
- It is a fast way to raise finance as several people come together to contribute to a business plan.
- You have access to guidance and you can also get feedback
- Some of your investors may become your loyal customers once your business is up and running.
- Crowdfunding offers you with options if you fail to get bank loan.
- You will know what people really think about your business idea even before putting it into use.
Crowdfunding is not perfect like everything else so it also has its shortcomings ;
- Since it is a requirement that you tell people your business idea before they can start contributing, somebody can steal your business idea and take it as his or her own if you do not patent it.
- Not all projects are accepted since it is people’s money on the line.
- So you have a target that you want to reach as your capital for your business to take off, people start fundraising but for one reason or another you do not reach the target you set, any finance pledged by the investors to kick start your business will be returned to them and you remain with nothing.
- If you fail your investors for one reason or another, you risk damaging your reputation and they can’t contribute again to whatever super business idea you will have in future.
If you are still interested in using crowdfunding to raise capital for your business, you can consider using the following sites; Kickstarter, Ulule, Indiegogo, Causes, Patreon, GoFundMe, RocketHub, GoGetFunding, WeMakeIt, CircleUp and many more.
9. Get a loan
Getting a loan should be your last option. If the first eight do not work for one reason of the other, you can go for the loan option. But I would firmly discourage this because it will mean you getting into more debts and also you risk losing a lot suppose your business do not go as planned. But if there is nothing left consider this. You can get loans from different sources; Banks like Kenya Commercial Bank, Equity Bank, Standered Chartered, Family Bank are just a few banks which you can acquire loans from. You can also get loans from mobile apps like Taka, Branch. Loans are also available through credit unions which are organizations, groups or even cooperatives whose sole purpose is to offer financial assistance to members through loans, you can also use you credit card to fund your capital if your credit score is high enough. These are just a few options where yoi can get loans from but sources are so many. Just make sure you are taking a loan you can repay with ease even if your side hustle fails.
Getting funds for your side hustle is a difficult task but there are always options. The above nine options are just a fraction of the options you can consider and they are also the simplest. If you have any other options that you feel I left out, feel free to tell me I’ll add.