Pros and Cons of Side Hustle for Young Generations – In a family business, it is common to find the younger generation working on personal projects or businesses that are not related to the family business or side hustles. Why do they do it? Presumably, the main factor is the digital revolution, which makes things easier. This includes obtaining resources, knowledge and market access. This is thanks to the support of social media, marketplaces and the gig economy. In addition, many young people are becoming bolder and more entrepreneurial.
Thisside hustle is also a manifestation of the desire for free expression, without interfering with their duties in the family business. Through this side hustle, their creative energy is more channeled.
Pros and Cons of Side Hustle for Young Generations in Family Businesses
Benefits and Risks
Through side hustles, younger generations increase their experience. They learn to manage finances, find and serve customers, and work more effectively and efficiently. Family businesses can benefit from the experience and skills gained from side hustling.
Young people are usually more creative and enjoy trying new things. Through side hustles, young people try new technologies, strategies and business models. If successful, this new thing becomes an inspiration to make the family business more modern.
It is not uncommon for the younger generation to have interests and talents that are not the same as their parents. However, they feel obligated to continue the family business so they can’t just abandon it. Having a side hustle is an attempt to bridge this gap. In this one, the younger generation will get satisfaction. This satisfaction motivates them to do more for the family business.
Side hustles sometimes also serve as a financial buffer. That is, if the financial condition of the family business is not good, the income from the side hustle can cover it. This also diversifies the risks of the family business.
However, side hustles have the potential to cause problems. As expected, it will split the younger generation’s concentration. Things can get worse if the younger generation’s role in the family business becomes more strategic. If so, disputes may arise between family members. This often arises from the older generation thinking that their children are not passionate about the family business. This is especially true in a culture that values family cohesion.
Side hustles make the facilities and resources of the family business vulnerable to being used for something that has no benefit to the business. As a result, the family business can be strapped for resources. This certainly hinders the development of the business.
In the long run, side hustles can have an impact on succession. The more successful the younger generation is with their side hustle, the more distant their desire to take care of the family business may become. As a result, succession planning becomes more complicated.
Not forbidden
Given the benefits, many family businesses do not prohibit side hustles. In fact, they provide support. This support comes in many forms, such as providing seed funding for new businesses, providing business advice, creating collaboration between side hustles and the main family business, setting boundaries so that side hustles do not interfere with the main business, and utilizing trusts or holding companies to manage resources and accommodate the desire to diversify the business. For the latter, the Walton family, owners of Walmart, is a case in point.
The grandchildren of Sam Walton, the founder of Walmart, are given more voting rights in the family holdings, giving them greater influence in decision-making. This also allows them to set up businesses according to their interests, without being affiliated with Walmart and the Walton family. Steuart Walton, one of Sam’s grandchildren, took advantage of this. He founded Game Composites, a manufacturer of composite aircraft. In addition, along with his brother Tim, he founded an investment company, RZC Investments. The company bought a majority stake in British bike clothing business Rapha in August 2017, in addition to investing in road bike maker Allied Cycle Works. Nevertheless, he remains a part of the Walton family business. Currently, Steuart serves as a director.
The most important thing is to optimize the benefits while managing potential side hustle issues. How can we do this? There should be guidelines for young people who want to side hustle, including the do’s and don’ts of using company resources and facilities, commitment to the main family business, and transparency of activities.
Family business leaders should not look at side hustles through the lens of competition. In other words, don’t look at the business their child has set up as a competitor. Instead, view the side hustle as an opportunity to synergize and collaborate. The goal is to make the family business grow.
Instead of exaggerating differences, it would be more productive if both the senior generation as leaders of the family business and the younger generation as side hustle players look for similarities. Don’t both parties value integrity, discipline, hard work and quality?
The side hustle phenomenon will become more common. Preventing side hustles is the same as stifling creativity. Especially in the midst of an uncertain economy. Most importantly, how to address side hustles wisely so that all parties benefit, both individuals and family businesses.
Category: Family Business
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