When some people think about moonlighting, they conjure up images of a side job selling Tupperware or ringing up holiday shoppers at the department store. But these days having a side job often means owning your own business.
There are a number of benefits to starting your own side business: to earn extra cash, to prepare an exit from your day job, to use other skills or simply to do something fun. But make no mistake about it: Launching a new venture is risky. While you hunt for clients and drum up business, you still must pay the mortgage and save to put the kids through college.
Such demands lead many entrepreneurs to keep their day jobs. But juggling a day job with a side business can be tricky, too. It can turn your boss and co-workers against you, drain your savings and set back your career in ways you can’t predict.
Before you embark on turning your good idea into reality, here are a few things to consider:
Running your business part time is a good way to see whether it’s a self-supporting entity or a money-gobbling bust. Still, keep in mind that running a business part time may not be a good test of how it will perform full time, warns Richard Phillips, a career consultant in Palo Alto, Calif. A good part-time business may be just that–a good part-time business, he said.
One measure is Phillips’ “80-20” rule. In a successful part-time venture, he says, 20 percent of your effort should capture 80 percent of your business. But it’s not worth going full time if that means spending the remaining 80 percent of your time chasing the last 20 percent.
Dipping your toe into your part-time business offers another benefit: It allows you time to pick up valuable work skills at a day job that you can then apply to your new venture. Valerie Frederickson, a career management consultant in Menlo Park, , Calif., suggests that you take a job doing exactly what you will be doing in the new business first. Many entrepreneurs are under the illusion that having knowledge about a particular service or product means they could successfully sell and manage a business.
And before you launch your business, assess what’s driving you, advises Dan Ramsey of Reedsport, Ore., who has started up numerous small businesses while working a full-time job and written a book called “101 Best Weekend Businesses.” Most entrepreneurs choose their business to satisfy one of three personal needs: their lifestyle, their income demands or their social needs, Ramsey said.
Lifestyle businesses involve turning your interests into a money-making venture. For example, someone who loves dogs and cats might start a pet-sitting business. Others start businesses strictly to make money but don’t necessarily pursue their heart’s passions. And still others open businesses to serve the social function of helping others, such as care-giving or wedding planning.
One of the biggest decisions you must make is whether to tell your boss about your weekend business. Most entrepreneurs believe that whatever they do during their free time is none of their employer’s business. However, don’t violate company rules regarding outside employment.
“My personal feeling is that (employers) rent me, but they don’t own me,” Ramsey said. “What I do on my own time is none of their business.”
In general, employers react to a moonlighting worker like an only child who wakes up one morning to discover a baby brother in the nursery. There’s jealousy, resentment and anger that this venture will pull away valuable attention and energy you otherwise would focus on their business. Employers often assume the worker is stealing company ideas, or worse, using company time and resources for personal gain. There’s also the fear that you’ll abandon the company to pursue your business full time.
Bosses view even the most diligent employee with suspicion if he or she has a side venture, said Abby Molano, whose then-employer fired her after she started her marketing communications firm, Uni-Pro. A worker who appears distracted will probably be placed in a position with less responsibility or asked to leave, Molano said.
“When you become an entrepreneur, that’s a direct threat, both psychologically and financially (to your employer),” said Molano, whose present firm, Business Development Partners for Success in Sunnyvale, Calif., advises small businesses. “You’re no longer tied to the employer.”
And yes, it’s tempting to use your company’s phone, fax, computer and photocopier–all of which are at your fingertips every day. But resist the urge. Conducting your side business while on the company’s dime is a quick way to get fired.
“You have to be smart about keeping your job and your business separate,” said Dave Korner, who runs a gift-box business while working full time as a marketing specialist.
Small-business consultants suggest you set up an answering machine at home, check messages during your lunch hour and return phone calls in the morning, during the evening and on weekends. With a three-hour time difference from the East Coast, you can return out-of-state calls before you clock in at work. Let your customers know the best times to contact you. Some clients prefer to negotiate only during business hours, but most are understanding if you tell them when and where you can be reached.
Working full time while running a resume-writing service, Ramsey told clients that he worked only in the evening and on weekends. As it turned out, many of his clients also held 9-to-5 jobs and were unable to work with other resume-writing services during the week. So, while those other services were closed on the weekends, Ramsey was open for business.
“I turned a disadvantage into an advantage,” he said.
Most weekend entrepreneurs daydream about shedding the shackles of a corporate job and becoming their own boss. But knowing when and if to make this leap isn’t simple. Earning enough money to replace your regular salary isn’t the only deciding factor. You must consider how being a full-time entrepreneur would affect your career path.
Tim Hobbs, a recruiter with West Coast Recruiting in San Jose, warns that employers are somewhat leery of people who have started their own businesses, especially if the venture was small, unsuccessful, in an unrelated field or kept you out of the field for a number of years.
“You could be viewed as someone who doesn’t know what you want and may not stay for very long,” Hobbs said.
Some employers fear that former entrepreneurs will be unhappy about taking direction after being on their own for a period of time, said Frederickson, the career consultant. “If they have been out of the corporate environment for a few years on their own, entrepreneurs need to seriously think who would hire them for what, and how they would come across,” she said. “It can be surprisingly difficult to go back.”
