Starting a Business

Doing It Yourself

By Nadine von Moltke » Types of Businesses to Start » August 2, 2011

So you want to be your own boss, but you can’t afford to quit your job and work for yourself full-time? There is a solution.

Man holding a clock in front of his face

There are three types of part-time businesses. The first is for people who want to work, but value flexible hours and the freedom to pursue other passions or spend time with their children. The business will never be huge, but then it’s not meant to be. The second is run by people who have a specific skill or hobby that they can make money from, but there are financial or other constraints stopping them from launching the business full-time. The third includes businesses that can be launched and run part-time, but the entrepreneur’s end goal is to be able to grow the business to a point where it is self-sustaining and he or she can resign and concentrate solely on the business.

Just like any start-up, this requires time, dedication and planning while still working full-time for another employer – and without jeopardising the job. It is also only a viable option for businesses that can be run both part-time and full-time. Ideally, a part-time business looking to grow into a full-time business should be service-based, relying on the entrepreneur’s skills and drive rather than, for example, manufacturing products.

Weighing Your Options

Running a business while still being permanently employed can make good business sense. An entrepreneur with a full-time job to fall back on has a safety net and is therefore under less pressure to make the venture succeed quickly. It also means that a few mistakes are not necessarily the end of the business.

Part-time businesses require less funding and the entrepreneur can often raise the necessary funds by diverting earnings from a full-time job. In addition, launching a part-time business with the aim of growing it into a full-time enterprise can be very rewarding. But, like any start-up, it is also incredibly hard work. For a part-time entrepreneur who is also holding down a job, time is precious and scarce. But that doesn’t mean it can’t be done. Planning, hard work, doing something you are either very good at or love, and having an end goal can give shape to your venture.

It is also important to be patient. Tony Robbins, a US-based self-help author and success coach, says that once you have mastered time, you understand how true it is that most people overestimate what they can accomplish in a year – and underestimate what they can achieve in a decade. Finding the balance between what can be achieved and how long it will take could result in a sustainable start-up that might take a bit longer to get off the ground – but is highly successful once it is.

Finding a Good Match

If you are looking to start a part-time business, ask yourself this question: what skills do you have that can be sold as a service? As long as it is a skill that people are willing to pay for, it can be the foundation of a great part-time – and then eventually – full-time, business.

Selling your services part-time enables you to eliminate risk by limiting your financial investment, as well as test the ‘start-up’ waters and make sure you do actually want to work for yourself. Other advantages include a steady income, ongoing employee benefits and building your business over a longer period of time, which generally gives it a more stable foundation. However, you and your business must be a good match. You may have an interest or experience in a specific business or service, but that doesn’t necessarily make it a good match. James Stephenson, small business consultant and author of Ultimate Start-Up Directory, highlights these points when determining a good business match:

Do you have the financial resources to start or purchase the business, and enough money to pay the day-to-day operating expenses until the business breaks even and is profitable? If not, it’s probably not a good match, and you should consider alternatives.
Does the business have the potential to generate the income you need to pay your personal expenses, and does it also have the potential to generate the income you want to earn? This is very important because if you can’t pay your own bills, you’ll soon be in trouble. And if, over time, you can’t earn the income you want to earn, you’ll lose interest in the business – a recipe for disaster.
Are you physically healthy enough to handle the strains of starting and running the business? If not, you may end up having to hire people for the job, which can be problematic if the business revenues aren’t sufficient to support both management and employee wages.
Do you have experience in this type of business or service, and do you have any special skills that can be utilised in the business? You can gain experience and knowledge on the job but skills that can be used and capitalised upon right away are extremely valuable.
Are there any special certificates or educational requirements to start and operate the business, and are these readily available? Find out the upfront costs associated with these, how they can be obtained, and the time frame needed to obtain specific certificates. Training and certification shouldn’t be viewed negatively because often the return on time and investment is substantially financially rewarding. Anything worth doing is worth doing well.
Will you enjoy operating the business, and does it match your personality type and level of maturity? This is very important. If you don’t think that you would enjoy it, then don’t start. Again, the loss of interest in a business is almost certainly the kiss of death.
You can’t stay motivated and rise to new challenges if you don’t like what you’re doing.

Tips for Starting a Business Part-time

Know what you want. Having a clear idea of your objective in starting a part-time business will help you decide what kind of business to start and how to run it.
Pick something you enjoy doing. Much of the reward of part-time entrepreneurship may consist of the pleasure you gain from it, not the money, so make sure you like the work you’ll be engaged in.
Pick something you know. If your business is related to a favourite hobby or professional sideline, you’ll have an extra edge because of your background or expertise in the field.
Have a business plan. Even a part-time business needs a full-size business plan. In particular, be sure you’re able to describe a viable business model for generating profits.
Be patient. When you can’t work at it all the time, your business idea will take longer to get under way and grow to maturity.
Take care to separate your job, business and personal responsibilities. A part-time business can interfere with work and family relationships if you let it.
Have an exit plan. Decide in advance when and how you’ll sell or get out of your part-time business. Otherwise, it could become a full-time burden.

Case Study 1

From part-time planner to full-time success

Aleit Swanepoel launched his events company – The Aleit Group – from a small apartment in Cape Town, while maintaining a full-time job. Today, it’s an iconic name in local eventing circles. By Nadine von Moltke

The Aleit Group is not only one of South Africa’s premier wedding and events coordinators, but has grown to include travel, an academy, venues and even an online gift shop for shoppers in both South Africa and the UK, all of which draw cleverly on cross-selling opportunities.

As is often the case with sideline businesses that grow into highly successful companies, Aleit’s growth was organic. From a young age Swanepoel realised he wanted to be in the hospitality industry. His passion paid off and he quickly moved through the hospitality ranks, becoming first the restaurant and conference centre manager at Oude Libertas, and later the national functions and events manager for Distell, South Africa’s largest wine company.

The wedding planner

But it was at Distell that Swanepoel fell in love with wedding planning. “I was asked to coordinate the wedding of a winemaker who worked with Distell,” he recalls. “I had found my path – and I was very good at it. It didn’t take long to realise that what I really wanted was my own events and wedding coordination company, but I couldn’t resign. I needed to earn an income while I was launching my business.”

Faced with needing to work and wanting to launch his own company, Swanepoel enlisted the help of a photographer friend who also needed exposure. “I knew I wanted to coordinate weddings, but launching a company is a bit more complicated than saying ‘here I am’. I did some market research and discovered that in 2002 South Africa was the top destination for UK couples getting married. Having lived in the UK, I had an idea of the people and the culture. This would be my target market. Couples getting married abroad need help – they cannot plan every detail themselves. I would fill that gap.”

First on Swanepoel’s agenda was a website.
“That was the most important thing we needed – an eye-catching website that would direct overseas couples to us.” The website was not expensive to set up. It was basic and the partners could take the photographs themselves. But it was a creative website that stood out, and it appeared at a time when the industry did not yet understand the power of Google Ad words. There was also only one other consultancy in Cape Town, unlike the over 50 consultancies competing today. The result was that simply by Googling ‘wedding in South Africa’, Aleit could be found by potential clients thousands of kilometres away.

Getting started

However, although the website might have been inexpensive, Swanepoel could not even afford a fax machine. “I had no start-up or working capital whatsoever. I needed to book venues, caterers and all other peripherals based on the deposits of my clients alone. We were operating out of my flat on one computer. I also needed my job to pay the bills. But obviously I didn’t want that situation to last forever.

“So I set a goal for myself. Once I had 20 weddings on my books I would resign and focus full-time on my business.” As it turns out, it was 16 weddings and four months before Swanepoel took the plunge and quit.

“After three months of working until four in the morning on two jobs, I realised that I needed to make a decision and focus completely on my business. It’s possible to launch an events company part-time –
I read and replied to emails at lunch and I did my planning in the evenings –
but it was exhausting.”

Start-Up tips for the part-time owner

Define your service. Know what it is that you are selling. In Swanepoel’s case it was himself, and his simple website, which hit the right target market attracted the clients he needed. Today it is harder to remain at the top of Google because companies have become savvy to how Google works, but that just means he has to find fresher ways to be visible.
It is important that your clients can find you.
Honesty works. Distell was supportive of Swanepoel’s venture, particularly because he had turned its events division around. He resigned after five months of launching Aleit, but eight years later his relationship with the company remains very good. Why? Because he was upfront with his employer, he did not let his start-up affect his work and he was not in direct competition with Distell.
Seize the Day. Swanepoel attributes his success to hard work, a degree of luck and watching the market carefully. “The events industry has exploded over the past ten years. It’s important to recognise trends so that you can capitalise on them, but equally important to continue to watch the market. Markets become saturated, and once that happens, you need to find a way to stay ahead of the curve or change your business model – perhaps even do something else entirely.”
Customers first. In the service industry – particularly for a company that is looking to grow its client base significantly to become self-sustainable – customers are everything. “The service industry should never be money driven. Deliver real service, never make a promise that you can’t keep and the rewards will follow.”

Case Study 2

Taking the first few steps

Starting a business while you are employed can be tricky – but very rewarding if you get it right. By Ed Hatton

A young entrepreneur has an excellent business idea but is permanently employed – and unable to quit his job at this time. The service he wants to offer requires him to market his idea, but due to his full-time job, he does not have the luxury of time to build a network.

Making a choice

Starting a new business while employed full-time reduces risk and allows the entrepreneur to prove the business concept while he continues to earn a salary, but there are disadvantages. Ideally, the entrepreneur would like to put all his energies into the start-up but that would mean neglecting his salaried job. Thus, he needs to work twice as hard and this can put strain on his family life.

If he keeps what he is doing secret from his employers he will be very restricted in developing his new venture; he also risks being found out, disciplined and losing the trust of his employer. If he does tell them, some employers will reward his honesty and he will eventually leave on good terms, but others will react badly and pass him over for promotion and training, and manage him with suspicion. On balance it is probably better to tell, but he must ensure that his work for his employer does not suffer.

Getting started

There is a temptation to treat part-time start-ups as informal businesses but doing so will delay the development of the business. Planning the future is important. The entrepreneur will need realistic business objectives, projections of sales and costs, and estimates of what resources he needs, including time and money. He needs to identify his target market, decide how he can approach them and develop the marketing collateral he needs to make those approaches.

Above all, he needs a clear understanding of what value proposition his service offers and how to communicate that message.

Marketing

Marketing a new venture while employed elsewhere is challenging. One way to start is to create a great website that holds people’s interest and is easily found by potential customers. Search engine optimisation and a campaign to get people to visit the site are fundamental requirements.

Networking is powerful, and can be done out of business hours. Business associations, Internet sites like LinkedIn, and interest groups like Toastmasters or the Black Management Forum provide opportunities for networking. He needs business cards and he should not be shy about handing them out. Judicious use of personalised email can generate enquiries and there are many advantages to using social media as a business development method.

Initially at least, most new customers will be signed up as a result of personal approaches so he must be prepared to canvass, and get used to rejection. Canvassing is not a fun activity, but it is essential. The best marketing method is to secure one or more initial customers, even if they are not profitable, so that he has reference sites. With references he can approach other organisations in the same line of business, ask his customers for referrals and use the story of their success in his approach.

Be honest

Juggling two jobs and a family is difficult. So is the decision on when to leave employment, and how to give full value to both his employer and the new business. There will be a temptation to cut corners, to hang on to his salary while his successful new business takes up more of his time. He needs to be fair to everyone, his customers, employers and family, and make difficult decisions when they are necessary – and never forget to enjoy the excitement of creating his own business.

Making sales calls

As the entrepreneur is working full-time it is difficult for him to see potential clients during normal working hours, so he needs to be creative to get started. A few options he could try include:

Target organisations that operate out of business hours like the hospitality industry, sporting venues, church organisations or clubs.
Take leave and concentrate on making face-to-face calls and presentations – make appointments in advance by email sent after-hours.
Focus on medium enterprises; they are more likely to be accommodating about after-hours visits than the big corporate organisations.
Many NGOs will be prepared to see suppliers at odd hours to gain a preferential price for a desired service.
Agree with his employer that he can work in time taken for sales calls.
And finally, he could use the Enterprise Development section of the BBBEE codes to propose using his service to develop black-owned enterprises on behalf of his employer


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