CREATE EXTRA INCOME WITH A SIDE GIG

Follow six ordinary South Africans as they take up the Absa/City Press Money Makeover Challenge and undergo a money makeover boot camp for six months. Personal finance expert Maya Fisher-French speaks to TV producer Nono and personal assistant Catherien who have side businesses to generate extra income to pay the bills and buy a few luxuries

NONO started her own range of body-care products called Salt and Light two years ago. “I used my savings in 2018 to start this business. It cost me around R20 000 to start. I mainly use social media and word of mouth to promote products.”

Catherien sells aromatic oils and recently got a licence to sell NeoLife health and cleaning products. HAVE A PLAN & A BANK ACCOUNT Far too often people realise too late that their business is actually costing them money, says Maya Fisher-French. Before you start a business, you need to do your homework – understand the costs involved, including your time, petrol, data costs and so forth.

Have a separate bank account for the business to keep it apart from your personal finances. If you treat your business as an emergency fund to pay ad hoc personal bills, it will be difficult to get a handle on your profitability. You can run the business as a sole proprietor so you don’t necessarily have to open a business bank account. A low-cost account will suffice if the business turnover is less than R1 million.

Consider hiring a bookkeeper

if the business can afford it, or use a proper accounting system.

Catherien found she was spending hours trying to keep up with her admin. A simple solution was to sign up for accounting program Wave (wave.com), which is free unless you want to add an employee payroll. The program is sufficient for most small businesses and issues invoices and reconciles payments.

Nono hired a bookkeeping company which manages her books and tax returns. “It was getting too stressful for me as I work full time as well. This has proven to be a great relief to me because I can easily create invoices on my app and all records of payments are on the app as well.”

Be aware of tax implications. If your business is structured as a Pty (Ltd) it would have its own tax number and tax liability. However, if you run it as a sole proprietorship – or just as a side gig – then any profit is added to your taxable income. It’s important to keep proper accounting records as you can deduct all business expenses from your income as well. This includes travel costs for deliveries and data as well as the cost of any inputs.

Decide what platform you want to use for your orders. Social media sites such as Facebook and Instagram offer great marketplace applications. But both Catherien and Nono found WhatsApp works well.

Catherien recognises she needs to be more active getting her product onto social media, but for now word of mouth and selling her product at a local community market is providing sufficient turnover. S