For many reasons – including rapid technological advancements and the rising cost of living – having a ‘side hustle’ has become a mainstream reality for a lot of South Africans. In fact, for people who want to steer clear of the 9-to-5 slog and work part-time or on a project basis, side hustles can be less of a source of supplementary income and more of a primary means of revenue. This trend has seen the emergence of the ‘gig economy.’ However, while being a gig worker certainly comes with its perks, it’s also important to understand and mitigate the risks and challenges involved with these kinds of job opportunities.
Becoming a part of the gig economy
In line with the global trend, the gig economy, which is made up of freelance, short-term, and on-demand work, has grown substantially in South Africa. According to a BrandMapp consumer insight survey[1], as many as 30% of middle-class South Africans have side hustles. Confirming this, Stats SA also found that the period between 2018 and 2023 saw an increase of almost 28% in part-time employment[2].
Having a side hustle can have many advantages – it could be a means to monetise a passion or a hobby. It could also provide a creative outlet or a break from your everyday job. In light of the current volatility of the economic climate, having a side hustle can bring in much-needed additional income.
There are, however, a few factors that gig workers and freelancers need to consider. Providing insight on this is Jason Mellow, Head of Broker Distribution at MiWay Insurance, who says that “having a side hustle can prove very lucrative. In fact, your side hustle could be a fully-fledged small business in the making.
If you’re interested in seeing where your dream or passion can take you, it’s time to think about the long-term implications of being self-employed, even if that’s just part-time. Once you’ve found a way to make that extra money, the next step is to take measures to protect your financial wellbeing against the specific risks that pertain to your business and working environment.”
Financial protection for part-time pursuits
One of the most effective ways to safeguard your side hustle against unexpected incidents is to take out the right kind of business insurance. It’s important for workers to remember that not every business insurance policy is created equally. Insurance will be tailored to the unique risks that involve the sector, the nature of the work, any valuable equipment needed and risks that come with selling to- or servicing members of the public.
A good example would be a jewellery-making side hustle that involves working with and refining special metals. The nature of the work would typically mean that the person would need expensive, specialised equipment. In the event of a fire and if that equipment is destroyed, the replacement costs could result in a potentially devastating financial loss.
In this example, you would benefit from taking out an insurance policy that covers the full replacement value of equipment, as well as any valuable inventory or tools. For MiWay clients, these kinds of items would be covered by a Business Property policy, that extends to the business premises, but also any contents, cash, electronics, and special equipment.
A few more boxes to tick
Another factor to consider when protecting your side hustle is how to manage it effectively to maintain a healthy cashflow, while keeping IT systems up-to-date and tax matters in check.
Gig workers may also need to consider the implications of hiring temporary or permanent staff to assist them in growing their venture. In this case, they could benefit immensely from expert labour advice on issues relating to compliance, conditions of employment, health and safety regulations and employee related risks.
By proactively addressing these considerations, side hustlers can strengthen the foundation of their ventures, minimise risks, and position themselves for sustainable growth. Seeking professional advice and leveraging resources to manage various aspects of the business effectively can go a long way towards setting the stage for long-term success and commercial viability.
“When you think about the potential of your side hustle becoming a small business, juggling all the related responsibilities can be daunting. However, high level operational support should come with the territory.
To help our business owners and freelancers, we offer MiBusinessAssist – business support services that are designed to reduce unnecessary operational costs and save precious time. Our experience has shown us that having access to these value-added services can help free up the time, money, and headspace for entrepreneurs to truly focus on what they love doing,” Mellow concludes.
PERSONAL FINANCE