The Big Time
No doubt about it, taking your part-time business full time is an exciting yet scary proposition. Your small but loyal band of customers is convinced everyone they know wants to buy your product or service. You love the independence and fulfillment being your own boss brings, and you want more of it--all the time.
But are you ready to take the big plunge? Are you willing to quit your job or cash out your savings so you can turn your weekend or nighttime business into a full-time venture?
You might be, says David H. Bangs Jr., author of Business Planning Guide: Creating a Plan for Success in Your Own Business (Upstart Publishing), depending on how you answer these key questions:
- Can you commit the time it takes to run a full-time business, or do you have too many other interests, such as family and civic responsibilities?
- Is it sensible for you to take the financial risk your full-time business will require?
- Is there enough market demand to warrant selling your product or service full time?
"Not every part-time business is primed to turn full time. The market demand might not be there, or the owner can't commit what's needed," says Bangs. "The best way to know if you have what it takes is to put together a business plan. Some people are afraid of the answers they'll get to these questions, so they skip the business plan and proceed anyway. But then they don't have a solid basis for launching a full-time business."
Nancy Bombace says writing a business plan before she launched HoneyLuna, The Honeymoon Registry Service for couples-to-be and their wedding guests, was her smartest move.
"I was so excited about our business idea that I wanted to jump right in," admits Bombace, who owns the Mill Valley, California, business with her husband, Phil. Fortunately, a CPA friend suggested she put together a business plan. "We looked at how much money we needed for advertising, accounting, postage, our 800 number and other areas of our business," she says. "We projected these figures out one, three and five years, and developed best-case, average and worst-case scenarios."
The six-week process of preparing a business plan uncovered some valuable information: Bombace couldn't afford to quit her full-time job as an administrative assistant and run HoneyLuna full time. "My heart was in my new business, but I needed to keep working at my regular job so I'd have the money to launch HoneyLuna and keep it going," she says.
In late 1995, Bombace cut her job to four days a week and spent one full day each week--and weekends and evenings--developing HoneyLuna. As her client list grew, Bombace cut her job to two days a week, and in January 1997, quit altogether to run HoneyLuna full time. Bombace booked dream honeymoons for 50 couples in 1997. She has 60 new clients this year and hopes to turn a profit by the end of the year.
Here are four more important steps you must take to turn your part-time business into a prosperous full-time enterprise.
1. Find customers. The Bombaces attended bridal shows throughout Northern California and the Pacific Northwest to introduce HoneyLuna to prospective clients. "Bridal shows have been a great way to test reactions face-to-face and explain how our concept works," she says.
Bombace also made cold calls to professional wedding service providers, including photographers and florists. She also designed a brochure describing HoneyLuna's services, established a toll-free number and created a Web page to promote her company on the Internet.
John Dudley, a professional magician in Grand Junction, Michigan, used a few marketing tricks of his own to build a client base for Magic by John Dudley when he took his part-time business full time in the late 1980s. "I wanted people to associate my name with magic, just like they do David Copperfield's," says Dudley, who performs his magic at parties, business conventions and dinner shows.
To get his name out around town, Dudley printed business cards and left them everywhere he went, particularly in places where children were likely to be. "I've gotten magic shows from cards I've left on bubble gum machines," he says.
Dudley also designed a brochure explaining the types of functions where he can perform. He's big on free giveaways, such as puzzles, magic tricks and photographs of himself. Every person who attends his magic shows goes home with a giveaway, and each item has his name, address and phone number. "People remember a great magic trick, but not necessarily the person who did it," says Dudley. "This way, they know it's Magic by John Dudley."
2. Raise capital. Chances are, your full-time business will need an infusion of funds to keep it running until you can turn a profit. The Bombaces did what many start-up entrepreneurs do: After tapping their savings, they asked family and friends for loans. "We borrowed about $15,000--enough to cover the cost of our computer programs, brochures, business phone lines and basic office supplies," Bombace says.
The couple also applied for an SBA-guaranteed loan through their local banker. "We were approved for a $10,000 loan, which we didn't use, since [it turned out] the funds from our family were sufficient," Bombace says.
3. Gather support. You can learn a lot about running a successful enterprise by talking with other entrepreneurs who've done it. Meet successful entrepreneurs by attending business conferences or joining industry trade groups or your local chamber of commerce.
You can also learn from experts by "enlisting the right resources," suggests Mark LeBlanc, owner of Small Business Success, a La Jolla, California, small-business consulting firm. "Spend $150 and call your accountant or attorney and get the right advice," says LeBlanc. "So many people are afraid to spend the money. Then, when they have a problem, it costs them much more to correct it."
Another suggestion: "Put together an advisory group," LeBlanc says. "Ask your accountant, lawyer and experts you know in marketing and managing a small business to be your advisors."
4. Keep a positive attitude. Even though Bombace earned a salary from her part-time job while she built HoneyLuna's clientele, the transition wasn't without sacrifices. "We had to adjust our lifestyle and give up spending on travel and other fun activities," she says.
Supporting a full-time business tested the Bombaces' marriage, too. "Sometimes we both got upset, but we're fortunate that we could talk it through," says Bombace. "We knew it would be three to five years before the business would pay for itself and start supplying an income, but we had to remind ourselves what we were doing and why. At times I wanted to throw in the towel, but I knew I really wanted my own business."
For Dudley, making the transition was a matter of having the right attitude. "I take myself seriously. I keep my blinders on to naysayers who say, `No, this can't work,' or people who ask, `Well, that's nice, but what's your real job?'
"I was inspired by a good friend of mine who lived to be 98 years old," Dudley continues. "He quit his job during the Depression to be a professional magician. He supported his wife and two children doing magic. If he could do it during the Depression, certainly someone like me in today's economy can do it, too."
Can you land your former employer as a client? If your new business doesn't compete with the company you used to work for, and you've been a hard-working employee, your former boss should welcome the chance to become your client and refer friends and associates to you as well.
Should you tap your former employer's customer base? If you signed a noncompete contract with your former employer, you're obligated by law not to solicit its clients. Noncompete contracts generally have a time limit--say, two or five years--after which you're free to target the company's clients.
Whether doing so is a good idea depends on your local business climate. In some communities, soliciting a former employer's customers is frowned upon; in others, it's totally acceptable.
Before you go full time, check out these helpful resources:
- Business Planning Guide: Creating a Plan for Success in Your Own Business, by David H. Bangs Jr. (Upstart, $22.95, 800-235-8866)
- Creating a Successful Business Plan (Entrepreneur Media Inc., $59, 800-421-2300)
- Entrepreneurs Are Made Not Born, by Lloyd Shefsky (McGraw-Hill, $22.95, 800-722-4726)
- Fear of Failure, by James Marshall Galbraith (Benchmark Books, $19.95, 800-345-6665)
- Master Strategies for Higher Achievement, by Brian Tracy, a six-cassette audiotape program (Nightingale-Conant, $59.95, 800-525-9000)
- Secrets of Self-Employment: Surviving and Thriving on the Ups and Downs of Being Your Own Boss, by Sarah and Paul Edwards (Putnam Publishing Group, $13.95, 800-942-9093)