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The opinions expressed by the entrepreneur's contributors are their own.
Figures from the Office of National Statistics, released in December, said that "the number of people employed in payroll has decreased by 819,000 since February 2020". While these numbers have been loaded a priori, the Prime Minister and expert commentators expect the overall COVID-19 situation to get worse before it gets better. It will take some time before the vaccination program is sufficiently covered for the restrictions to be lifted. If the virus does not mutate, it will make the vaccines less effective.
The above figures do not capture the picture of retailers and SMEs without payroll. With schools closed for the time being, maintaining 9 to 5 hours of work at home is proving to be problematic, especially for parents who are expected to oversee their children's learning. As a result, traditional working models are increasingly under pressure and we cannot expect a return to “normal” even after widespread vaccination. What does this mean for future sources of income?
Financial "survival of the fittest"
"It's not the strongest of the species that survives. It's the one most adaptable to change."
This quote is often attributed to Charles Darwin. It is actually a paraphrase of Darwin's "Origin of Species" by Leon Megginson (Professor of Management and Marketing, Louisiana State). That the sentence comes from a management context is not surprising, as it perfectly captures the entrepreneurial spirit with which we should face these uncertain times.
Many people dream of a day amid the drudgery of an everyday 9-5 job, starting a business, or applying creative skills to a profitable sideline. Perhaps people are watching your retirement situation and realizing that the state pension is really insufficient and you need another source of income. Most envisioned a passive income stream. Now is the time, especially if you are one of the 819,000 people recently unemployed, or if you want to financially benefit from the extra time you lost leisure time or be laid off from work.
If your income streams are successfully adapted to change or diversified enough to reduce the risk of change, you will not only survive economically in this pandemic, but potentially thrive too.
It is often written that one of the defining characteristics of millionaires is that they have multiple streams of income. This is of course largely correct. In the popular culture of this statement, however, this means that you too can be a millionaire as long as you have a second stream of income. Sorry, but it's not that simple. What it means is that a millionaire's mindset is not, "What do I have to do to get the money?" Is, but "How can I use money innovatively to work for myself" can benefit from favorable tax regimes instead of facing an ever-increasing income tax burden, and that financial risk is reduced.
Streams of income can be generated in a number of ways. Many can work with others, and some are easier to automate than others to provide a passive stream of income.
Diversification is the key
As an investor and multiple business owner, I can't push diversification enough. Make sure that not all eggs are in the same basket. This applies to investing in the stock market, becoming an entrepreneur, or even selling basic-scale products. If your financial risk is spread across multiple streams, increasing your financial stability and longevity, then one of those streams should turn out to be failing. Take your time and research ETFs, tracker funds, blue chip stocks and property crowd funding projects.
Related: Risky Business: Should You Diversify?
Start an extra income
During this time, an online business can be easily built and many ideas can be implemented with limited or no startup costs or ongoing overheads. Services provided online are the most obvious and COVID safe options. These side businesses can deviate from dropshipping or start even smaller with small job freelance websites like Fiverr.
Related: 50 Ideas For A Lucrative Side Job
Use your network
Building business relationships takes time and trust. Start with people you know on your network. These people are more likely to try because they know you personally. Social media is booming these days. It is now easier than ever to reach people on social media, especially Instagram. Networking on social media is key to increasing your brand awareness and attracting customers.
Related: 6 Ways Networking Helps Entrepreneurs
Manage your debt
It can be a bit stressful at times having a 9-5 job not only to keep your side business running and spend time branding and networking on social media while also preserving your available money and expenses. Reducing your debt is key to growing as an entrepreneur. The points above will definitely help with this. However, for extra help and a slightly hassle-free approach, I like to use tools like Moneybox, which is a clever app that allows you to round up the purchases made on your card to the nearest whole number. Those pennies can then be added to my first point on financial investing through the app in a simple, straightforward approach. Another great tool that can save you money on reducing this debt is by using Monzo Bank, which allows you to save a certain amount of money each month while smartly monitoring your expenses and incoming payments. Everything is automated so that I can focus all my attention on my core business.
Entrepreneurs who have mastered the above methods of diversifying their income are well on their way to becoming a successful entrepreneur.