Many people feel they have fallen into the “employment trap” and want to know how to get out of that and start their own business. Carl Reader looks deeper.
You wouldn’t be reading this article if you weren’t potentially interested in starting a business, or if you didn’t have that little bug in your mind that starting your own business might be something that’s for you. While this can seem a daunting prospect, it’s important to emphasise that anyone can start a business. There’s no limit on age, and there’s no limit based on the history of what you’ve done so far. Look at Colonel Sanders of KFC – he started when most of us would be drawing a pension. Many potential entrepreneurs consider the idea of starting a business while maintaining their full-time jobs. This isn’t for everyone, but it does have some pros. So, what should you do to start your business while employed?
First things first, you need to make sure the paperwork is in order and the legals are in place. This may seem boring, but it’s essential. Check your employment contract to ensure there’s no clauses preventing you from starting your own business on the side. In most cases, you’ll also probably need written permission to be able to do this. Each situation is different, so make sure you’ve got the right paperwork sorted. Once you’ve got over the first hurdle – getting approval from your employer - you can then start to look at the practicalities of actually setting up your own business.
The first reality to come to terms with is that even if you’re running a business alongside your job, you’ll more than likely be worse off financially, at least initially. You’ll still have the security of your income, but you’ll also need to meet the cost of starting and running the business. There is no such thing as a business that was started with no money whatsoever, regardless of what people tell you.
Funding is often a concern for many small businesses. If you’re not in a position where you can afford to fund your new business, it could be useful to think about whether it could be financed externally, for example with business or start up loans. These can also function as a reality check for prospective entrepreneurs. Put simply, if you can’t fund it, and then find no one else will lend money towards it, then it’s worth seriously considering whether it is a viable business that you should be going ahead with. You might be convinced by your own idea, but if an external funder isn’t convinced, then it may only be a good idea in your own mind. That’s a possibility you need to weigh up, even if you can afford to fund it yourself.
You also need to consider whether working on both your business and your full time job alongside each other would provide you with enough motivation to really go ahead and grow your new business and make it successful. There’s a strong argument that the thought of having no money at the end of the month is what drives many business owners. It could be that if you’ve got the safety net of a good salary, the drive may not necessarily be there to motivate you. There’s a secondary issue to that too, in that if you’ve got a well-paid job (and I’ve seen this before with business owners) you may be reluctant to give that up. If you’re employed in a job that requires you to drop everything at times, that’s what you need to do, and that’s what you should do. You will need to perform well in your job to keep it, after all. However, it’s another barrier that could prevent your business from really taking off. You need to weigh up whether the perceived benefits (i.e. having the security of a salary), is actually worth it against the potential of the opportunity that you’re giving up of your business.
Those are just some of the things you need to think about when starting a business alongside your full-time job. The emotional element is a big part – you will need to be able to motivate yourself consistently, even when the going gets tough. You might need external funding and you will almost definitely have to manage competing pressures from your work and your business.
Beyond that, though, there’s another hard reality to factor in. Your job might take 8 hours of your day. Your business will take up at least another 8 hours; I know very few business owners who only work 8 hours a day – it’s normally more like an 18 hour job. Consider the impact this will have on your family life and your personal life. Trying to juggle both a day job – which you’re going to need to perform in, to keep your salary – together with a business, which you’re going to need to perform in to make it grow – is not going to be easy. It could be worth reevaluating whether you really do want to run it alongside, or whether you should focus on producing a very good business plan, go and get some funding, and jump in.