Becoming an entrepreneur is not an easy feat, even though having alternative sources of income is very important, especially in light of the harsh economic realities of Nigeria. Relying on paid employment alone just won’t cut it. In other words, we all should be encouraged to have a side hustle.
The question then becomes what kind of hustle should one be engaged in?
There are many things you could do, but for me, a side hustle does not necessarily have to mean actively running or operating a business. Side hustle could mean investing in someone else’s small or medium sized business, otherwise known as SMEs.
There are lots of persons out there that have the passion, zeal, skills and innovation to run a business, but not everyone is cut out to be an entrepreneur.
For me, I would rather invest in, than operate a business, more especially if you a part of the working class. Not many persons have the knack to be an entrepreneur and that is fine, but there is nothing stopping you from investing in that friend or family member’s business.
With the high rate of unemployment in the country, youths are resorting to operating or starting up their own thing.
I hope you know that you don’t have to be a millionaire before starting to invest in small businesses. If you pick wisely, some of these small businesses might eventually grow into bigger businesses, and you’ll soon be reaping the benefits.
So, if you have some funds sitting idly in your bank account, you can invest in that your friend, colleague, family member’s business. Mutual funds, T- bills are not the only instruments available to invest in.
Of course, for every investment undertaken, there are underlying risks.
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This is why you need to conduct your due diligence before investing. A person could just wake up one morning with a business idea and declare that he needs investors, a few months down the line, the business does not scale, monumental losses are suffered, and all the capital invested goes down the drain.
So, before you invest in that your friend/family’s business, make sure you have done the following:
- Request for a business plan, study it and ask questions.
- Do your own research and finding on the business profitability or viability.
- Enter into a formal contract, ensure it is all written (You may need to consult a lawyer).
- Don’t invest money that you can’t afford to lose.
- Verify that the entrepreneurs are credible.
- If need be, consult a financial advisor/consultant.
By Seun Adebisi