Starting a Side-hustle

The current state of South Africa’s economy has led many South Africans to start a side-hustle to deal with financial pressures. Side-hustles offer an opportunity for many people to make ends meet, but it is important to consider factors such as tax obligations, bookkeeping, and legal compliance to ensure the success and sustainability of your business venture.

Know your Tax Obligations

As a side-hustler, you need to understand your tax responsibilities. You will need to register your business with the South African Revenue Service (SARS) and get a tax reference number. You will need to keep accurate records of your income and expenses to ensure that your tax filing is correct. You may need to consult a tax professional to ensure that you are tax compliant. It’s important to set aside a percentage of your earnings for tax payments to avoid any tax surprises.

Bookkeeping

Ensuring that you maintain organised and accurate records is critical for your side-hustle to be successful. You need to implement a bookkeeping system that will suit your needs – whether that be spreadsheets or accounting software. It will depend on your budget and needs. You will need to be meticulous when it comes to tracking your income, expenses, and invoices to get a clear understanding of the financial health of your business.

Separate Bank Accounts

To maintain financial clarity and ensure that your bookkeeping is accurate, it's vital that you separate your personal and business finances. Open a bank account that is dedicated to your side-hustle and use it exclusively for business transactions. This will simplify record-keeping and enable you to track income and expenses. This will also demonstrate the legitimacy of your business to clients and financial institutions.

Appropriate Pricing

For your side-hustle to be profitable, it’s crucial for you to determine the right pricing for your products or services. Conducting market research and ensuring that you understand your target audience is vital. You also need to do competitor analysis, understand your costs, time and profit margin when determining a price.

Seek Professional Advice

If you need legal or financial advice, it is important that you consult a professional advisor. If you require an accountant or bookkeeper, then you may want to find somebody who is experienced and specialises in small businesses or freelancers. They would be able to provide guidance on tax obligations, bookkeeping practices and more. Professional advice is an investment to ensure the longevity and financial success.

Starting a side-hustle in South Africa requires more than an entrepreneurial spirit. There are many factors to consider, and you will need to make sure that this is something that you want to pursue. You will need to ensure that you run your side-hustle as professionally as you can – this will help your business succeed during the challenging economic landscape.

De Lange Financial Services can help you on your journey of starting a side-hustle, whether it be a business plan, registering your business or bookkeeping. Get in touch today, we’d love to partner with you.