Finance, which is popularly referred to as capital, is an important factor in business start-up. It will consist of the money that you require to meet initial costs such as:
- Rent for the business premises.
- Goodwill (if any) to the landlord.
- Cost of renovations to business space.
- Installation of electricity and water
- County licenses and permits.
- Purchase of machinery and equipment… if required
- Cost of initial stock if you are buying goods for resale
A reasonable estimate of the above items when added together will provide information on the total initial cost of the side hustle.
The next consideration is the source of money to meet the initial costs. People can fund the side hustle from personal savings. If the savings are not enough, borrowing options would be considered from family members, Chama or SACCOs. Bank or micro finance institutions shy away from giving business start up loans for fear of its recovery in case of default. They are also warily over the business experience of newcomers into business.
If one is unable to raise the required money, then it is advisable to drop the business idea and return to pick another one. Then, begin the process again with evaluation of the market.
Alternatively, if the required side hustle finance is available, the next factor to consider is one’s capability to run the business. Information on this factor will be posted tomorrow at 10 AM.