A good hedge against the risks of starting your own business is to begin working on building your company while you’re still employed with a full-time job that pays a regular salary and benefits.
Here’s why: If you’re in a position to start your business while you’re still employed, you’ll have the best of both worlds. A stable, dependable source of income will give you much more confidence in testing the waters with a new business that has a high likelihood of failure in the first year.
Here are some simple Do’s and Don’ts to guide you as you walk a sometimes fine line between keeping up a good standing at your full-time job and pursuing your interests in your own business.
- Do consider running your business as a part-time operation alongside your current job. This is a great model because you’ll continue to have dependable income and benefits while you test your way into finding a way to drive consistent, reliable income with your side business. The last thing you need while trying to grow your own business is the added stress of unpaid bills stacking up or draining your savings account without a clear path to earning it back.
- Do understand and follow your employment contract. This is particularly important if it refers to inventions and intellectual property (IP) that you develop as part of your job. Almost always, anything developed on company time and using company property belongs to the company. If you do not have an employment contract, you’re still not in the clear. Check the company’s Employee Manual for references to ownership of inventions and IP. No manual? Ask your Human Resources manager or someone functioning in that role to explain the policy.
- Do save your side income. Set aside cash reserves from the income your startup creates that can sustain you when and if you decide to leave your full-time job. On top of that, be sure to put into place clear spending and budgetary guidelines for your side business to make sure you’re not spending beyond your means. Saving or investing all of the profits from your side business will help you build a safety net for potential lean times in the future once you no longer have your day job.
- Do be as open with your employer as possible. In fact, if your business is not competitive with theirs, see if you can turn them into a collaboration partner, customer or client. You may even be able to get your employer to invest in your startup or allow you to hold equity in a joint venture. If you think you might go the route of having an employer as a customer, investor or partner, be sure to consult an attorney to get trusted advice on how to proceed carefully.
- Do thoughtfully prioritize your time. If you’re going to keep your day job and work on growing your part-time business at the same time, that doesn’t leave much time for non-essential activities. Decide what’s important, consult with the other stakeholders and family in your life, then create a target list of all the responsibilities and activities you’ll be reducing or eliminating to make time for your business.
- Don’t use corporate computers or email systems to send any emails related to your side business. Even if you log into your webmail account to send an email, you still have problems: you are using their property to further the goals of your own business, which could present a legal challenge later. They may have the right to read whatever keystrokes you’ve entered, even if your emails were not entered into the company’s email system.
- Don’t feel pressured to leave your day job as your business starts to gain traction. New businesses go through life cycles, and some early wins do not necessarily mean you have a sustainable enterprise. You should validate your business model with real, paying customers and then go through a period of several months with consistent growth in your customer base. Your side income needs to get above that which your necessary expenses will require, before considering quitting your day job to focus full-time on your new business.
- Don’t choose the wrong business. A business that doesn’t lend itself to part-time involvement won’t suit you very well if you can only do it part-time to start. For example, opening a retail food store can be an all-consuming endeavor. If you are not reachable, hands-on at the beginning stages or don’t have a partner who is there every day, you are setting yourself up for potential failure. If you’re looking for the right business to start while keeping your day job, check out this list featuring over one hundred realistic, attainable side business ideas.
- Don’t talk about your part-time business to other employees around the proverbial water cooler. This could be construed as promoting your business on company time. Rub one co-worker the wrong way with the fact that you’re running a side business and that could bring up potential issues with your employer if they decide to tell management before you’re able to have that conversation yourself. The silence rule extends to discussions on company time with your employer’s clients and suppliers as well.
- Don’t be afraid to leap into full-time entrepreneurship when the time is right. Running a business part-time can be partly successful, but unless you are going to be a passive investor, the business will grow only up to a certain point without your full-time commitment. Once you’ve identified a clear demand for your solution and you have a sustainable level of income from your growing customer base, it’s safe to start considering leaping to self-employment.