The Question: My name is Aidan. I am 26 years old and I am planning to start a serious relationship. I am engaged with an agricultural input firm in Mombasa that pays me Sh. 20,000 gross salary. I currently live in a single room of Sh. 5,000.
My girlfriend stays upcountry in Eldoret but I am planning to relocate her (although I am really in a dilemma since she insists that we move into a bedsitter which goes for between Sh. 8,000 to Sh. 10,000). I have an account with a money market fund where I have been depositing Sh. 1,500 monthly with the sole target of expanding my butchery business upcountry.
The butchery makes between Sh. 12,000 and Sh. 20,000 per month. This puts me between a rock and a hard place since I don’t want to disappoint my girlfriend as I look into expanding the business.
What extra errands can I engage in to be able to raise money and balance between the two considering my job is the 7am to 5pm type? I also yearn to have a side-hustle in the evenings to boost my sources of income as I am always free after days work. Please help.
The Answer: Apart from Sh. 5,000 rent and Sh. 1,500 contribution to the money market fund, you have not listed what your other expenses are and how the remainder of your net income is utilized. This implies that from a net of between Sh. 16,000 and Sh. 17,000, between Sh. 10,500 and Sh. 9,500 is unaccounted for. You need to know where this money goes to every month.
Your business also makes between Sh. 12,000 and Sh. 20,000; is the net or gross profit? Get in the habit of bookkeeping in order to streamline your finances both personal and in your business. This is especially paramount given that you are running a side hustle far from where you currently live and work. Your supervision is limited and can only be enhanced through proper bookkeeping.
If you are intending to settle down with your girlfriend, you should ensure you are financially stable enough to accommodate her. This is currently not the case. You have not mentioned whether she has a job, or if she is skilled, which gives the assumption that she isn’t. If not, you would be putting yourself in a tightening financial noose as expenses will go up.
It is important to note that relocating to another house will cause your rent to double from Sh. 5,000 to Sh. 10,000. Other expenses are additional shopping, groceries, entertainment, travel, etc. If you really must stay with your girlfriend, impress on her the need to find a job and bring some income on board.
Your present income of Sh. 20,000 will be barely enough to cover living costs. You may not even manage to save the Sh. 1,500 that you currently do monthly in a money market fund. This will affect expansion plans for your butchery and you may have to contend with flat income.
The money market fund is a good idea. Savings of Sh. 1500 monthly will amount to over Sh. 20,000 in a year. This may not be enough to scale up your business though.
You could join a SACCO and save at least Sh. 3,000 from the business monthly. This will amount to Sh. 36,000 in a year and allow you borrow up to Sh. 144,000 that could elevate your business. You could shift to a spacious premise and introduce an eatery or “choma” zone.
The festive season avails opportunities for booming business, especially for eateries. Alternatively, savings from your business can be used to stock more meat from livestock sourced cheaply. Take away meals to homes and offices is another opportunity.
One way to improve your business is by boosting its appearance. For instance, ensure that your business operates in a thoroughly clean establishment. Going into the December peak season, consider expanding to include soup and ‘mutura’, which are two of the fast-moving commodities in the butchery business, in addition to selling meat.
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As you already have some experience in business, starting a side hustle in Mombasa might also be feasible. This depends on the amount of effort it would take considering the few evening hours and how capital intensive it would be.
Your skills count a lot as you need something that you can master in a short time. Typical side hustles include selling coffee, boiled eggs, smokies, samosa, etc. You may want to study the market too.
Upgrading your core skills is also paramount for upward mobility at work. You have the advantage of age on your side. At age 26, you may take some courses to position yourself for possible promotion and salary increment. This will also improve your employability. For instance, there are online courses that you can pursue towards this end.
The answer to this financial question was provided by Benjamin Cheruiyot who is the Engagement Lead at Abojani Investments, a personal finance and investments advisory firm. A version of this query was previously published in the Saturday Magazine.
