Personal Finance

Legal issues for your side hustle

case_2
cathymputhia_img

Summary

  • A survey done last year on side hustles in Kenya found that the percentage of such engagements rose by about 42 percent post-Covid and that most of those forming them were persons in their 30s.
  • The main motivation was access to cash.
  • Most of the respondents in the survey wanted access to cash for emergencies while others found side hustles to be an effective way of investing extra cash.

According to dictionary definitions, a side hustle is a part time job or occupation taken in addition to one’s full time employment. Many Kenyans in employment have side hustles to supplement incomes.

A survey done last year on side hustles in Kenya found that the percentage of such engagements rose by about 42 percent post-Covid and that most of those forming them were persons in their 30s.

The main motivation was access to cash. Most of the respondents in the survey wanted access to cash for emergencies while others found side hustles to be an effective way of investing extra cash. For others, side hustles were a part of retirement plans. A vast majority of respondents reported profitability in their side hustles.

The most profitable side hustles, according to the survey were in agriculture and construction sectors. A similar survey in the US found that about 37 per cent of employed persons had side hustles and made about Sh73,230 ($686) from the side hustles on average.

Side hustles in Kenya range from small businesses to large corporations. I know of a person whose side hustle is even larger than the corporation she works for.

Due to salary cuts and layoffs, many people are resorting to side hustles as a way of supplementing income and making ends meet. When choosing a side hustle, it is advisable to consider your skillsets, talents and passion. Do not get into business just to make a profit, but get into business because you enjoy it. Therefore in choosing go for a side hustle you are skilled in and one that you have passion for. Passion is a driving force that will outlast profits and all other motivations. It is like the wings that keep the business afloat during hard times. Passion will give you a reason to hold on to your business and make it work.

To have a successful side hustle you must have sound governance practises. Here are some legal tips to consider when running your side hustle. Legal issues are not the only key determinants for your side hustle success. There are several other determinants like finances and human resources.

If you are in employment you must make sure that your side hustle’s objectives are not in competition with your employer’s, otherwise you risk being terminated. Where you are unsure you can seek clarification from your employer.

It is important to incorporate your side hustle. Don’t run an unregistered business. I advise for a company because of the attractions of incorporating a company. It is easier to attract investors to invest into a company rather than other forms of business.

It is important to get into strategic planning for your side hustle. Writing down your vision, mission and values will give your business a sense of purpose and assist you derive meaning and passion from your business. There are many workbooks available for start-ups to help them work around drafting strategy.

To minimise exposure to legal risk, have properly drafted contracts to cater for all aspects of your business. Contracts are important for dispute resolution as they form part of the evidence that would be adduced in the event of a dispute. It is important to keep proper business records.

Protect your intellectual property when undertaking your side hustle. However, it is also important to avoid breaching another entity’s intellectual property rights to minimise risk exposure.

Lastly, your side hustle should remain compliant with regulations and the law to reduce risk exposure from non-compliance.