Tips for Incubating your Small Business Idea While Still Working Full-Time
Have you considered starting a business while still employed?
My Shanghai-born friend, Annie, says the Chinese have a term for this: “riding in the big boat while carrying the little boat.”
Some entrepreneurs only launch their business officially once they leave employment. However, they incubate the business concept while employed.
Other times, they actually launch the business and run it on the side while still employed. They may continue to run it as a side business for a period of months or even years. Only later do they leave their jobs.
No matter how you do it, I’ve got 6 practical tips for starting a business while you’re still employed:
1. Consider Your Employer Your Banker
I am a huge fan of bootstrapping a business, i.e., using personal money to fund growth. One form of using personal funds is to set aside a portion of your salary to fund your business. That means you need to protect your funding source -- your job -- until you are ready to cut the cord.
Remain a productive employee. Also, make it a point to know your employer’s policies on moonlighting. You don’t want to find yourself out of work prematurely, because your employer caught wind of your new venture and disapproved.
Employers are all over the map on whether they support employees’ entrepreneurial side ventures. Some employers do. Others are vehemently opposed. Still others don’t mind as long as you are not competing with them and you are a good worker.
If your employer prohibits moonlighting, then you may have no choice but to keep your business percolating in the idea stage until you have saved enough money to pursue it on a full-time basis.
2. Write a Business Plan
Sure, much of your plan will turn out to be incorrect (same goes for most startup business plans). But it’s not the plan that’s important … it’s the planning.
You’ll need to think through issues such as how many sales you will need to become profitable; anticipated expenses; and staffing required. Writing a business plan forces you to address such issues. If it turns out that your business idea is not feasible, better to find out before you quit your day job.
3. Get your Spouse’s Buy-In
Your husband or wife needs to be committed to your startup. If it isn’t a shared dream, or if your spouse is resentful of the time you are spending away from family, you’re adding stress on your relationship.
Plus, a startup often takes some initial outlay of money for technical product development, business filings, marketing, a website, etc. And it may mean years of sacrifices until the business takes off. These are fundamental money matters that your spouse needs to agree on.
To secure buy-in from your spouse, talk frequently about your dream. Paint a picture in words. Get him or her involved, too. Nothing creates buy-in better than being actively involved in business decisions.
4. Choose the Right Business
If you are planning on running your business on the side for several months or years while still employed – it’s especially important to start the right kind of business. You’ll need a business where you can set your own hours. You may also need a business that allows you to hire outside service providers or contractors who are literally working on your business while you are at your job.
Here are some examples of businesses that can be operated on the side indefinitely for years, or eventually taken into full-time businesses:
- Software development
- Web design
- Freelance writing
- Online businesses
- Graphics design
- Consulting
- eBay business
- Event planner
- Any hobby that you can turn into a business
5. Set Aside Dedicated Schedule for Your Startup
In my experience, the biggest challenge you will have during the incubation is sticking with it and finding time. After the initial flush of giddy energy, it’s hard to stay motivated to build a business. It’s even harder when you are tired and stressed after a full day’s work.
Many entrepreneurs who have successfully started a side business do it by setting aside dedicated hours each day for their startup. I’ve known budding entrepreneurs speak about going home to “start the second shift.” That’s exactly how you have to think of it. Commit to spending X hours per weekday and/or on weekends on your business. Stick to a regular schedule – it makes it easier. P.D. James, the novelist, worked for years as a hospital administrator, arising early to write for 2 hours each morning before work.
6. Turn Your Employer Into Your First Customer
Think of your employer as your first big sales target (assuming your product or service is relevant to your employer). Many a business has gotten off to a great start when the owner’s former employer became the first customer.
Securing a large customer early on gives your business credibility in the form of a referenceable customer. It also helps you ramp up sales and bring in necessary cash flow early on.
That’s why it is so crucial to perform well on the job and maintain good relations with your employer throughout the incubation period. When you are ready to go out on your own, you’ll be glad to have your former employer’s support.
Now – off to your startup, and good luck!
About
Anita Campbell is a writer, speaker and radio talk show host who closely follows trends in the small business market at her site, Small Business Trends.
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Sep 4, 2008 6:00pm
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Annita: This is what I did, except for the writing of the business plan. Elance is a great venue for doing this. Because of their system you are relieved of many of the billing and overhead issues that you would face if you tried to provide the same services on your own. It took me approximately 30 months from the time I started on Elance as a part timer to the day I went full time. Niel |
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Sep 6, 2008 2:11pm
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This article is an incredible representation of the reality you face when trying to transition from employee mentality over to the employer mentality. I would suggest to any aspiring self starting business owners to really read and absorb the intended guidance in this article. Especially when it comes to the section on how to work the relationship with your employer. So many people try to start a business while they are working for someone and when their business starts to pick up a little bit it totally effects their attitude at work. Perhaps they start being a little more cocky or they start slacking off in their duties at work. Then if your employer doesnt support what youre doing and they find out, the next thing you know you are in a position where you HAVE TO produce, and it simply multiplies the stress level by unbelievable proportions. Also the section on your business relating to your spouse is a very serious point of interest. We all know that the saying holds true, "If momma isn't happy, no one is happy." This statement holds true to both men and women alike, you got to keep your spouse happy if you want success. Bottom line to people wanting to start their own full time business: READ THIS ARTICLE A 100 TIMES. KNOW IT. LIVE IT. |
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Sep 9, 2008 7:40pm
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From my own personal survey, those who make money quickly in a new business are those who already have clients when they start. So, step #6 is a BIG plus. Unfortunately, I had to do it the hard way - from scratch. And, I have been struggling. SandraNoble |
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Sep 9, 2008 8:47pm
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I totally agree with all these tips. Unfortunately, when we have a job, we tend to put off thinking about operating a business. It is always good to have a W2 and 1099. It will help achieve financial independence faster. |
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Sep 9, 2008 11:47pm
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Hi! Thanks for sharing your insights bout business thing. I find this article very helpful. Very inspiring. |
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Sep 10, 2008 12:39am
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Well said Anita. I am always in favour of that. I have a few small businesses and have used three of your points to start. |
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Sep 10, 2008 12:42am
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What you are saying Anita is well said. In this age all successful businesses are started from bootstrapping. Sometimes it might take a little longer but the ending is happy. |
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Sep 10, 2008 2:35am
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Hi Anita, |
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Sep 10, 2008 10:38am
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Can I copy/paste this in an email to a friend, are you legally allowed to do that? cheers |
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Sep 10, 2008 1:37pm
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All excellent points Anita! It surprised me a little as I read this to realise much of this is how I initiated our business, whilst contracting to accounting practices. It wasn't planned as nicely as you have laid it out here, just seemed to going through much the same processes naturally in developing the business concept and preparing the different elements of the business. And just as your 6th point says - the main practice I contracted to was also our very first member and still is on-board over a year and a half on! I would add to understand and realise that point where the new business can launch, and become the full-time focus. Be very conservative with expectations and if at all possible, start generating the revenue first (point 6 can help with this). Once it does start, keep a true eye on the financial position regularly, make necessary adjustments to the accounts (ie accurate management accounts) and implement changes and attention accordingly. Informed business decisions can't be made without a real understanding of the business finances. The 6 Ps as we'd say - Prior Preparation Prevents P*ss Poor Performance. Great post! David |
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Sep 10, 2008 7:38pm
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I am surprised you would not add "network marketing" into your comments on starting a new business while still working? |
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Sep 11, 2008 1:30am
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Hi Anita, thanks for sharing best practise! Great work! Markus |
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Sep 11, 2008 11:35am
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This is how i wish i had started my first business. i started our first business in school, then went on to take our largest customers of our first business as our first customers of our second though, and i have to admit that is a great tip given in this article for graphic design and web design. -Respectfully, |
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Sep 11, 2008 7:20pm
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Hi Niel, Good for you! I think what you did minimizes the risks of starting a business. You can "ease" into your business, and because you still have a paycheck coming in, you can afford to learn some lessons. Anita |
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Sep 12, 2008 8:27am
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The only thing I would add to Anita's list is the "soft skills" required to make the transition. Anita alludes to this in her discussion of setting aside a dedicated schedule for the new business. The biggest challenge for my coaching clients who are in this situation is how to fit their business into their already busy lives. This requires a strong "reason why", backed by a tremendous amount of enthusiasm for what (especially in the beginning) amounts to their second career. Motivation, determination, and persistence are the fuel that can make the difference between a successful business and "a great idea that never came to fruition." Write down your "reason why", and post it on your mirror or computer. This will serve as a daily reminder of why you are putting so much effort into your new venture. |
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Sep 13, 2008 9:22pm
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Well, anytime someone recomends that you write a plan, it puts you and your business on the path to success regardless. Sometimes, just the sheer fact of sitting down, writing out one's thoughts sets the wheels in motion to at least think about what you are doing. It gives you and your concept a foundation to build on at least. No matter which way you do it, you will hit walls and at that point it will be about your ability to go over or through those walls that will make you that great entreprenuer. Write out a plan, just Get going! |
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Sep 15, 2008 11:15am
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Thanks for taking time to share your views or opinion, i really agree with you in everything, i believe what most of us tend to ignor is business planning and the family factor. in the absence of this two factors , a business is like a car rolling down the slope without a driver. |
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Sep 29, 2008 3:31pm
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I also suggest switching from a full-tim job to a part-time job while you're launching your business. This helps you keep some of the steady income while you're starting your business. |
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Dec 1, 2008 9:09pm
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What I like about this is the "realism" conveyed. This is reassuring and comforting and actually gives me the confidence that I do know what I am doing and my thnking is sound by listening to others from the eLance community. Thanks. |
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Jan 12, 2009 7:50pm
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Very timely topic! There's even a blog on this topic, The Corporatepreneur (http://corporatepreneur.blogspot.com)! I wholeheartedly agree with item #5... One thing I do is get together with a few friends and do a "SEEFAD" (a Self Employed Experience For A Day) where we camp out at a local Panera and work on ideas. One tip that really should be emphasized is to take things in baby steps... even 10 minutes at a time. I think this is point #4, but choose things that are conducive to working on in small chunks of time and is very passive. Elance is a godsend because you can outsource a lot of stuff at very reasonable prices. |
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Feb 23, 2009 9:35pm
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I have followed all the steps over the past two years. I now have many, many customers waiting in the wings and am ready to go to manufacturing but, with this economy, how do you obtain capital even with customers waiting? |
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