You dream of the day you can quit your day job and start your dream business. But you realize that in the real world, mortgages and car payments have to be paid. So, instead of forgoing that day-job paycheck just yet, you start your business part time.
"The biggest benefit of starting a business part time is that it lowers the risk threshold," says Melvin Gravely II, founder of the Institute for Entrepreneurial Thinking in Cincinnati. "It makes business ownership viable to most people." The benefits are many-you can start with the cushion of your full-time job and test the waters to see whether there's actually a market for your product or service.
Still, starting part time is not easy. "It's not a hobby," Gravely says. "If it is a hobby, call it a hobby [and don't try to make money at it]. But if it's a business, call it a business." That means you'll have to work during most of your free time, grow your business more slowly than if you were running it full time and do whatever it takes to get your start-up off the ground, from sending e-mails out to customers at 2 a.m. to making deliveries with your car.
Randy Cohen definitely got used to his car in the early days of Ticketcity.com, his online ticket brokerage. In 1987, this former computer sales associate started by delivering tickets on street corners. "I would work out of the car while going to sales calls [for my day job]," he recalls. "People would call me on my mobile phone, and I'd meet them. I did that part time until it got so busy, it was taking away from my normal job."
Cohen, 37, recalls how difficult it was to present a professional appearance when he was meeting people at fast-food restaurants and on street corners. Still, he found that it was not only the successes, but also the mistakes, that helped grow his company. A few years into running Ticketcity.com, Cohen decided to open satellite offices off-site. He quickly closed them because he didn't have the right controls in place, and his online business was generating more profit.
In 1990, the Austin, Texas, entrepreneur was finally able to quit his computer sales job and take Ticketcity.com full time. With more than $10 million in sales today, the business is still going strong.
The Strength of Structure
It's a myth that a part-time business is easier than a full-time one. If you want to make it work, you'll have to set goals and parameters-from long-term planning to practical daily schedules. "If you had a part-time job, you'd be there on time," Gravely says. "Sometimes when we have a part-time business, we don't give it that same kind of structure and attention."
Managing customer communications is also key. "It shouldn't matter to your customers that you're part time," notes Gravely. Here's where good technology helps-use e-mail and voice mail to communicate with your customers and vendors while you're off earning that paycheck. Take no longer than 48 hours to respond, and get an auto-reply message to let people know you'll answer ASAP. Or as Kelly Poelker did with her virtual assistant service, Another 8 Hours Inc., get a toll-free number and forward the calls to your cell phone.
This O'Fallon, Illinois, entrepreneur also marketed her unusual schedule. "I used it as one of my selling points," says Poelker, 38. "I said 'I can meet you after hours.'" The strategy worked to help build Poelker's client base.
It helped that Poelker was able to procure work from her former employer when she quit. Though it was awkward at first, her employer approached her before she left about using her virtual assistant services. "It's so important not to jeopardize your current position," she says. "You have an obligation to your employer until you quit." That ethical integrity-and a positive relationship with her former employer-has helped her grow sales at least 20 percent annually.
Get It Done
- DO plan your part-time venture as diligently as you would a full-time business.
- DON'T treat your part-time business as a hobby. If you want it to generate profit, you'll have to work at it (read: forgo weekends and evenings, set aside specific times to devote to it, etc.).
- DO look into businesses that can be run any time of the day or night (online sales, virtual assisting, global distributorships, graphic design, etc.).
- DO hook up with a network of businesspeople who can give you advice, mentoring or an understanding shoulder (about your 2 a.m. marathon designing session).
- DON'T neglect your day job when you're there-you're still being paid to do a job, and your employer might even be a potential client someday.
- DON'T get discouraged when your life seems crazy, your full-time job and your part-time business are taking up all your time, and you don't see how you'll ever make it work. Remember that many have done it before you, and most of those success stories had dark times, too.
Should you tell your current employer about your part-time venture? The response is mixed among our entrepreneurs. While Poelker was able to maintain a good relationship with her former employer, Cohen's employers were not so supportive. Because his boss adamantly opposed his business, Cohen's challenge was to keep it separate-to do his job while trying to grow a business and keep it out of his employer's sight.
There are obviously some moral gray areas to such a situation. Ethical questions to ask yourself: Is this right? Should I be running my business on company time? How would I feel if an employee did the same to me down the line? The situation varies from person to person, and only you can decide what fits your business, says Gravely. "Some employers don't like the idea of you being in business for yourself at all. They think it takes away from your job," he explains. Others don't have a problem.
Whatever you decide, try not to burn any bridges, notes Gravely. Also make sure you're not violating any noncompete agreements before you leave, or you'll set off your boss's radar.
Jessy Klein and Meegan Barnes were lucky-their employers at Vibe magazine were OK with them having their own business. Says Klein, "My boss knew I was trying to run a business and was very cool."
So when Klein, 26, and Barnes, 27, started their New York City-based cosmetics and clothing company, Femme Arsenal, in 1998, they managed to work their desk jobs by day and concoct their lip balm recipes by night and on weekends. The schedule was crazy, especially when Barnes' kitchen became too small for their growing orders. They rented a small space to mix the makeup, and Barnes ended up quitting Vibe. She did freelance design and concentrated on growing the business while Klein kept working.
But their former jobs did help them get a clip in Vibe that a buyer from Henri Bendel saw. They also had the connections to get into events and give their products to celebrities like Lil' Kim and Snoop Dogg.
In 2000, they got a huge order that gave them some financial security, and Klein, too, was able to quit her day job. Today, the partners have about $1 million in sales. As Klein puts it, "We're not [as big as] Donna Karan and we're not a lemonade stand-we're somewhere in the middle."
Part-time to full-time success didn't come alone-it was in working together that the partners found strength. "Don't do it by yourself," says Klein. "You need someone else to lean on."
Even if you can't find a partner, it's a good idea to get some kind of outside help. "Put together a support network," says John Castle, a lecturer in entrepreneurship at the University of Washington in Seattle. "There are two types: personal support-friends and family you can talk to-and a group of advisors." You may have to be creative in terms of scheduling-some groups will meet during the day while you're at work. Look for comrades with a similar schedule to yours.
Full Steam Ahead
One of the most important decisions is when to jump from part time to full time. There's no concrete deadline, but there are a few signs to look for. Castle suggests asking yourself these questions: How is the business doing? How deep is your customer base? Do you have enough cash flow to offset the loss of your paycheck?
Starting part time can be a challenge, but it offers a significant benefit: It can be your very first step toward being an entrepreneur. Part time? Full time? Either way, the time is now.