The Pros and Cons of Starting a Business With a Separate Full-Time Job
Most people don’t start out as entrepreneurs; they choose to start their own business only after some level of work experience. It could be because they don’t like the idea of having a boss, and want to step out as their own. It could be because they learned critical skills that enable them to be a leader in their own right. It could even be because they came up with a great idea in the normal course of working.
Of these three motivations stemming from an existing job (and of course, there are always more), only one stems from the job being intolerable. In the other cases, the job is fine, but entrepreneurship could be a valuable alternative.
Because stepping out as an entrepreneur is risky and staying with your current job is safe, many potential entrepreneurs consider the idea of starting their own business while still maintaining their separate full-time jobs. This approach doesn’t work for everyone, as it has some critical limitations, but it also has some key appeals.
First, and most importantly, is the security factor. Leaving your current full-time job to start your own business can be risky; you’ll be abandoning your post, investing your own capital, and potentially running on zero income for the foreseeable future. If your business collapses or fails to generate any meaningful momentum, you’ll be low on cash and without a job. Keeping your job while starting your own business is a way of hedging your bets, granting you some guaranteed income as you work to develop your business on the side.
Second is the degree of flexibility keeping your job offers. If you keep your job, you can quit at any time. If you quit your job, it’s going to be difficult to get it back.
Third, keeping your existing job allows you to take advantage of company resources for the benefit of your new enterprise. Obviously, you can’t take office supplies or tangible goods, but you can talk with your bosses, coworkers, and colleagues to get advice or partner with them to develop certain areas of the business. You can even engage in professional networking to start building your contacts for the new business.
The most obvious drawback here is time. If you’re working full-time at an established position, you won’t have much time left over to pursue your own business. You’ll have to force all your work in the company to weeknights and weekends, which are typically harder times to do business. This means it will take a longer time for you to get your business up and running, and you won’t be able to give it your all for as long as you stay employed.
Second, you’ll naturally consider your startup more of a hobby than a living, and you’ll be less motivated to nurture it to fruition. Rather than being motivated by the sink-or-swim nature of true entrepreneurship, your safety net will keep you from fully mentally investing in your enterprise.
Third, working on your startup can have a negative impact on your performance at your full-time job. If you find yourself distracted with new ideas or staying up all night to complete work on some facet of the business, you won’t be able to give your full attention to your full-time job. Eventually, your employers will notice, and you could wind up losing your safety net altogether. Or, if you can juggle both entrepreneurship and a separate full-time job, your family and personal lives may suffer. After all, if your only time to work on your side business is on weeknights and weekends, when will you spend time with friends and family? It’s a major time burden to take on both at once.
There are clear advantages and disadvantages to starting a business while employed. But as long as you can reasonably manage both, I would have to give the slight edge to retaining employment while starting a business. There is a study that suggests entrepreneurs who start a business while still employed tend to do better than those that don’t, but these results might be suggestive of a hidden variable, such as risk aversion, that leads both to this decision and to entrepreneurial success. Personally, I went the route of starting my business on the side while still working as a full-time employee elsewhere. It’s difficult, but doable.
If you do proceed to start a business under your current employer, be sure to adhere to the following best practices:
· Don’t do any entrepreneurial work on company time. This could burn a major bridge and leave you without a job.
· Be open about your intentions with your supervisors. The last thing you want is for them to find out by happenstance.
· Don’t sabotage yourself. If your business demands more work, either quit your job and go full time, or find additional help.
· Keep it balanced. Don’t burn yourself out, and don’t allow your performance to slip.
And remember, there’s always time to change your mind!
For more content like this, be sure to check out my podcast, The Entrepreneur Cast!