Entrepreneurs have good reason for working full time at a job and part time on their businesses, experts say. For some people, especially in economic times like these when they’re worried about their regular job, starting a part-time business gives them a safety net.
Part-time start-ups by full-time employees may also offer a source of extra income when future pay raises are likely to be infrequent or non-existent.
Running a business while still employed can also make good business sense. An entrepreneur with a full-time job to fall back on is under less pressure to make a venture succeed quickly.
It also gives you the opportunity to make a few mistakes and not have that mean the end of the business.
Part-time businesses can also be easier to start because they require less funding and the entrepreneur can raise the necessary funds by diverting earnings from a full-time job.
Given the financial environment now, it’s going to be hard to go out and raise capital to start a full-time business.
Before you rush out to start a part-time venture, however, consider the potential downsides. Perhaps the worst would be if your part-time enterprise interferes with your full-time job.
You can’t burn the candle at both ends without some risk. If the time and energy you’re devoting to the business results in poor attendance or impaired performance, you could lose your job.
If you’re concerned that your business might pose a problem with your full time employment, you may wish to consult with your company’s HR department.
You may have signed a non-compete agreement as a condition of employment that could influence what kind of business you start. Unless you plan to go into business in competition with your employer, however, few companies have ironclad prohibitions against sideline ventures.
Perhaps the biggest problem with part-time businesses is that it’s hard for them to reach their potential when they receive only a portion of their founders’ attention and effort. And what if your business doesn’t do as well as you hoped? Be wary of committing too much. Avoid taking out a loan without carefully calculating your expenses and researching the markets.
Tips for Starting a Part-time Business
- 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. Be sure you’re especially able to describe a viable business model for generating profits.
- Be patient. When you can’t work at it full 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 otherwise get out of your part-time business. Otherwise, it could become a full-time burden.
Related: How To Create Founding Documents