Starting a Business in Your Spare Time
Keeping Your Options Open
You might be tempted to quit your current job and embark on the adventure of running your own business with nothing more than a good idea, your enthusiasm and whatever savings you've managed to put away. But there is another approach. You could keep the safety net of your current employment and start a small business in your spare time.
In this way, you can test the market without burning all your bridges. If it turns out that your idea for gold-plated toilet brushes isn't the money-spinner you expected, you can wind it down and carry on as before. If, on the other hand, it becomes the next big thing, you have the option of quitting your job and having an established small business to move on to as an entrepreneur.
How Much Time will it Take?
You can, of course, spend as much or as little time as you like on your small business. If you can't spare a few hours a day on top of your normal job to dedicate to your part time business then you probably aren't willing to work long enough hours to have a successful small business full time. If you find you're not enjoying the work, or at least finding it challenging and fulfilling, then running a small business probably isn't for you.
Legal Considerations
Before you start your part time business, you will need to check the terms of your contract with your current employer. You may find that your contract contains clauses that prevent you from working for anyone else at the same time, even if that means working for yourself. For example, there may be non-compete clauses preventing you from doing any other work in the same field, or for the same clients, as your employer does. Alternatively, you may find that your employer owns the rights to any intellectual property that you create while working for them, even if you create it in your spare time. If you are in any doubt about where you stand, you should seek professional legal advice.
Of course, you could just come clean and tell your employer what you are planning to do, particularly if you won't be in competition with them. Only you can judge whether or not this is a smart move. At best, your manager will try to encourage you to stay, perhaps by improving your salary or working conditions, or may even welcome the additional business skills that come from running your own part time business (wouldn't the experience of running a small business help you in your current job?). At worst, they will see you as disloyal and make life difficult for you.
Finance
There are two financial aspects to running a part time business: income and expenses.
Most people would welcome an additional income, as long as they were willing to put in the extra work necessary to earn it. But don't forget that there will be taxes to pay on any profits you make, so you will need to factor those in when you decide whether or not the small business you have in mind is worth your while. In any case, it will be easier to make a small profit to top up your existing income than it would be to generate enough business to support you without your other job. Perhaps you have no aspirations above topping up your income in this way: would running a small business help you to achieve this?
Although income is good, in the early stages of your small business it may not be profitable. As an entrepreneur, any expenses will have to be paid out of your own pocket. This is one reason why starting a business in your spare time can be a good idea: your existing employment acts as a safety net and should ensure that you have an ongoing source of income that you can dip into to fund your new enterprise in its early stages.
Weighing Up the Pros and Cons
If the small business you want to run is one that you could start from home in your spare time, then this route has various advantages. You have the safety net of a steady income, so you're not risking everything on your new venture and you will have some money to get it established. But you need to balance this against the legal and financial implications (contracts and taxes) that come from having two employers and two sources of income.
