Should You Launch Your Business Part or Full Time?
Should you start your business part time or full time? Even if you ultimately plan to go full time, many entrepreneurs and experts say starting part time can be a good idea.
Starting part time offers several advantages. It reduces your risk because you can rely on income and benefits from your full-time job. Starting part time also allows your business to grow gradually.
“Starting part time is simply the best way,” contends Philip Holland, author of How to Start a Business Without Quitting Your Job. “You find out what running a business requires while limiting your liability if it fails.”
Yet the part-time path is not without its own dangers and disadvantages. Starting part time leaves you with less time to market your business, strategize, and build a clientele. Since you won’t be available to answer calls or solve customers’ problems for most of the day, clients may become frustrated and feel you’re not offering adequate customer service or responding quickly enough to their needs.
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If you’re a part-time entrepreneur seeking a full-time professional image, check out business incubators. For a small fee, business incubators provide office space, services such as answering phones, and access to equipment like copiers and fax machines. The biggest plus: Incubators also provide startup help, such as marketing and accounting assistance. Business incubators used to be less common, but now you can find them even at local community colleges. In some cases, these incubators will also offer access to successful entrepreneurs and occasionally funders looking to back new ideas. This is particularly true of incubators attached to colleges or business schools at big universities.
Perhaps the biggest problem for part-time entrepreneurs is the risk of burnout. Holding down a full-time job while running a part-time business leaves you with little, if any, leisure time; as a result, your personal and family life may suffer.
“Working by day and running a business by night creates a host of potential conflicts and can add a tremendous amount of stress,” cautions Arnold Sanow, co-author of You Can Start Your Own Business. Sanow says conflicts between a day job and a sideline business are common, as are family problems: “I’ve seen a lot of divorces as a result of working full time and having a business on the side.”
That’s not to say a part-time business can’t work. It can, Sanow says, if you have excellent time management skills, strong self-discipline, and support from family and friends. Also crucial, he says, is your commitment: “Don’t think that, since you already have a job, you don’t really have to work hard at your business. You must have a plan of attack.”
Market Matters
As with any business, your plan of attack should start with a thorough assessment of your idea’s market potential. Often, this step alone will be enough to tell you whether you should start part time or full time.
You can’t become so caught up in your love for what you’re doing that you overlook the business realities. If you find there is a huge unmet need for your product or service, no major competition, and a ready supply of eager customers, then by all means go ahead and start full time. If, on the other hand, you find that the market won’t support a full-time business but might someday with proper marketing and business development, then it is probably best to start part time.
There are a number of investigative factors to consider, such as the competition in your industry, the economy in your area, the demographic breakdown of your client base, and the availability of potential customers. If you are thinking of opening an upscale beauty salon, for example, evaluate the number of similar shops in operation, as well as the number of affluent women in the area and the fees they are willing to pay.
Once you have determined there is a need for your business, outline your goals and strategies in a comprehensive business plan. You should always conduct extensive research, make market projections for your business, and set goals for yourself based on these findings (this is another area where the help of a business incubator can be beneficial). It gives you a tremendous view of the long-range possibilities and keeps the business on the right track. Don’t neglect writing a business plan even if you’re starting part time: A well-written business plan will help you take your business full time later on.
Certain businesses lend themselves well to part-time operation: ecommerce, food products, direct marketing, and service businesses are examples. Doing your market research and business plan will give you a more realistic idea of whether your business can work part time. (For specifics on conducting market research and writing a business plan, see Chapters 6, 7, and 10).
warning
Don’t bite the hand that feeds you. Starting a business that competes with your current employer may get you in legal hot water by violating noncompete clauses in your employment contract.
If you’ve got your heart set on a business that traditionally requires a full-time commitment, think creatively: There may be ways to make it work on a part-time basis. For instance, instead of a restaurant, consider a catering business. You’ll still get to create menus and interact with customers, but your work can all be done during evenings and weekends. Or, if you want to start a graphic design business, take on just one or two clients. You’ll build your portfolio but will be able to manage your work around your other commitments. And, as a bonus, as would-be clients come your way, you’ll have a good sense of how long tasks take and be in a good position to understand how much you can take on when you tackle your business full time.
Financial Plan
One major factor in the decision to start part time or full time is your financial situation. Before launching a full-time business, most experts recommend putting aside enough to live on for at least six months to a year. (That amount may vary; completing your business plan will show you in detail how long you can expect to wait before your business begins earning a profit.)
Basic factors you should consider include the amount of your existing savings, whether you have assets that could be sold for cash, whether friends or family members might offer you financing or loans, and whether your spouse or other family members’ salaries could be enough to support your family while you launch a business full time.
If, like many people, you lack the financial resources to start full time, beginning part time is often a good alternative. However, even if you do start part time, you’ll want to keep some figures in mind: Specifically, how do you know when your business is making enough money that you can say goodbye to your day job?
A good rule of thumb, according to Sanow, is to wait until your part-time business is bringing in income equivalent to at least 30 percent of your current salary from your full-time job. “With 30 percent of their income, plus all the extra time during the day to promote their business, [entrepreneurs] should be able to make [the transition at that point],” he says. Another good idea: Start putting more money aside while you still have your day job. That way, when you take the full-time plunge, you’ll have a financial cushion to supplement the income from your business.
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If keeping a full-time job and a part-time business going at the same time sounds too difficult, and taking the full-time plunge sounds too scary, consider taking a part-time or temporary job while you start a full-time business. This can be a way to ensure you have some salary coming in while giving you time to work on your business. Part-time jobs often offer evening or weekend hours—a big plus if you need to be accessible to clients during regular business hours.
Family Affairs
The emotional and psychological side of starting a business is less cut-and-dry than financial and market aspects, but it’s just as important in your decision to start part time or full time.
Begin by discussing the situation with your spouse, significant other, or family members. Do they support your decision to start a business? Do they understand the sacrifices both full-time and part-time businesses will require—from you, from them, and from the whole family? Make sure your loved ones feel free to bring any objections or worries out in the open. The time to do this is now—not three months after you have committed to your business and it is too late to back out.
After agreeing on what sacrifices can and will be made, work together to come up with practical solutions to the problems you foresee. Could your spouse take over some of the household chores you handle, for example? Lay some ground rules for the part-time business—for instance, no work on Sunday afternoons or no discussing business at the dinner table.
Take It Easy
Does all work and no play make entrepreneurship no fun? Some entrepreneurs who run part-time businesses based on hobbies, such as crafts or cooking, find that going full time takes all the fun out of the venture. “Going full time turns an adventure into a job,” as business expert Arnold Sanow puts it.
Some entrepreneurs have trouble grasping the fact that their businesses aren’t just pastimes anymore. They can’t work at their leisure any longer, and their ventures may require them to develop talents they didn’t know they had and perform tasks they’d rather leave to someone else.
Don’t get so caught up in the creative aspects of the venture that you lose sight of the business responsibilities you must assume to make your startup succeed. Take a realistic look at what going full time will require. Consider hiring people to handle the business aspects you dislike, such as sales or operations.
To make your part-time business a success and keep your family happy, time management is key. Balance the hours you have available. Get up early, and don’t spend valuable time on frivolous phone calls and other time wasters.
Getting Personal
Besides the effect business ownership will have on your family, equally important to consider is the toll it might take on you. If the idea of taking the full-time business plunge and giving up your comfy salary and cushy benefits keeps you awake at night biting your nails, then perhaps a part-time business is best. On the other hand, if you need to work long hours at your current full-time job, you commute 60 miles round-trip, and you have two-year-old triplets, piling a part-time business on top of all those commitments could be the straw that breaks the camel’s back.
Starting a full-time business requires long hours, but a part-time business combined with a full-time job can be even more stressful. If this is the route you’re considering, carefully assess the effects it could have on your life. You’ll be using evenings, weekends, and lunch hours—and, most likely, your holidays, sick days, and vacation time—to take care of business. You’ll probably have to give up leisure activities, such as going to the movies, watching TV, reading, or going to the gym. How will you feel the next time you drag yourself home, exhausted after a late night at the office, then have to sit right down and spend four hours working on a project that a client needs the next morning? Carefully consider whether you have the mental and physical stamina to give your best effort to both your job and your business.
Part Time Online Doesn’t Mean Less Time
While many entrepreneurs are still opening brick and mortar operations, some are choosing to start part-time online companies. DIY-style sites like Etsy allow people in creative fields to launch without the commitment of their own online store. And eBay remains a platform for those in retail to set up shop online (exclusively or otherwise). Setting up an online order-based business—or any business for that matter—that you intend to run part time can be a quick, easy, and less costly way to begin. But it isn’t necessarily less time intensive.
For instance, if you start an Etsy® shop and one day hope to turn your organic cotton T-shirt business into a full-time venture, you’ll need to spend time on marketing your shop, perfecting your search engine optimization, and regularly adding and creating new products to entice visitors to come back and buy. You’ll also need to fulfill orders and consider how you might scale the business if you need to. The same is true if you’re starting a resume or college placement consulting service online. You’ll need to market, manage social interactions, regularly create new products or displays of your work—or provide testimonials from clients that are regularly updated—and respond to would-be clients.
An online business doesn’t have to be full-time work, but just because it’s online doesn’t mean it’s any less crucial to pay attention and put in the time. For more information on starting an Etsy business, check out Start Your Own Etsy Business (Entrepreneur Press 2017).
Part-Time Pointers
Balancing a full-time job with a part-time business isn’t easy—but it can be done. Arnold Sanow, co-author of You Can Start Your Own Business, suggests these tips to help make your part-time business a success:
Give your family the chance to help out. Answering the phone, stuffing envelopes, or putting orders together are all great ways to get more accomplished in less time, while also making your family feel like they’re part of your business.
Be ready to give up personal time. You won’t have much time for TV, reading, or hobbies you used to enjoy. Be sure the sacrifice is worth it, or both your job and your business will suffer.
Focus on the task in front of you. When you’re at work, focus on work; don’t let thoughts of your business distract you.
Make the most of every minute. Use lunch hours or early morning to make phone calls; use commuting time on the train to catch up on paperwork.
Take advantage of time zone differences and technology. If you do business with people in other states or countries, make time differences work to your advantage by calling early in the morning or after work. Use email to communicate with clients any time of the day or night.
Don’t overstep your boundaries. Making business calls on company time or using your employer’s supplies or equipment for business purposes is a big no-no.
Be honest. Only you can assess your situation, but in many cases, it’s best to be upfront with your boss about your sideline business. As long as it doesn’t interfere with your job, many bosses won’t mind—and you’ll gain trust by being honest, rather than making them feel you have something to hide.
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What do you do if you can’t afford to start your business full time but need to be available full time to answer client and customer calls? Consider teaming up with a partner whose available hours complement yours. Or hire a freelancer to take incoming calls, answer simple questions, and bring important ones to your attention. You could arrange to pay a flat fee or a fee plus a little extra bonus for handling customer issues successfully.
Decisions, Decisions
Whether to start part time or full time is a decision only you can make. Whichever route you take, the secret to success is an honest assessment of your resources, your commitment level, and the support systems you have in place. With those factors firmly in mind, you will be able to make the right choice.
Are You a Solopreneur?
“Solopreneur” isn’t a brand-new term but it has definitely become more relevant in recent years. The word is easily interchanged with the word “entrepreneur,” but there are distinct differences. As an increasing number of professionals choose to start a business with no intention of ever adding staff, solopreneur is likely a term that will only grow in popularity. The differences between solopreneurs and entrepreneurs can be subtle. Here’s a quick look:
1. Solopreneurs don’t wait for a buyout. An entrepreneur works hard to build a business but may not be as attached to the concept as a solopreneur. Many, but not all, entrepreneurs build their businesses with at least a small hope that a much larger company will come along and offer millions of dollars for it once it grows. Of course, many entrepreneurs have turned down buyout offers to continue pursuing a passion, so this isn’t a defining difference. However, a large divide between the two may come when an entrepreneur can run a variety of businesses over the course of his or her career, while a solopreneur tends to work at one thing consistently.
2. Entrepreneurs put a face to a company. While a solopreneur tends to spend hours working hard to build the business, an entrepreneur frequently prefers to be out making connections and getting the word out about his or her business. An entrepreneur may be perfectly happy doing that and that alone, leaving employees to take care of the day-to-day tasks. Solopreneurs can be great networkers, as well, but focus on the work of making a product or offering a service. One major difference is that an entrepreneur may be more comfortable spending all day at a variety of networking opportunities and client meetings, while a solopreneur is content simply doing the work.
3. Entrepreneurs are managers. When someone is an entrepreneur at heart, even as a solopreneur, team building is a major goal. They may even begin working with freelance workers and virtual assistants to delegate day-to-day work or lead a team of people toward a defined goal. Solopreneurs, on the other hand, likely are in no rush to hire an employee to manage. Even if the day comes when they must outsource work or bring in a team member, a solopreneur may find themselves pitching in and doing the vast majority of the work solo. They may even have a hard time letting go of tasks since they might simply want to jump in and work hard to grow the business.
4. Solopreneurs are workers. While entrepreneurs can work harder than anyone they know, a solopreneur is a worker by nature. If a task needs to be done, their first thought is likely to roll up sleeves and start working. For this reason, this new generation of freelance workers and sole proprietors has emerged, with professionals content to run a one-person shop with no intention of bringing another person on. Entrepreneurs, on the other hand, have no trouble delegating even if they have to delay that process until they have enough money to bring additional workers on.
The distinction between a solopreneur and entrepreneur can be difficult to see, especially since so many entrepreneurs start out working alone. But the mindset of a solopreneur and entrepreneur are subtly different, and noting those differences can help professionals determine the long-term direction they’ll take with their businesses.