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If leaving the comfort of your salary and the benefits of being an employee to start up keeps you up at night, maybe starting a part-time business is a better alternative for you.
And it is that starting small reduces your risk because it does not consume your time or involve considerable capital investment, nor does it compromise your assets or deplete your bank credit , in addition to allowing your company to evolve and gradually grow without pressure, says the Dr. Luis Miguel Beristain Hernández, director of the Institute of Entrepreneurship Eugenio Garza Lagüera in the metropolitan area of Mexico City of the Tecnológico de Monterrey.
Still, there are some downsides: you have less time to promote yourself, strategize, and build your customer base. And since you will not be able to answer calls or emails from your consumers most of the day (because you will be busy with your work or other activities you do), your prospects may feel that you are not giving them enough attention or speed to resolve their concerns about your product. or service.
But don’t be scared. Although balancing the responsibilities of your family and a job with those of your entrepreneurial side is not easy, it is not impossible either. Arnold Sanow, co-author of Start Your Own Business , explains that you need to have excellent time management skills, self-discipline, and support from your family and friends to achieve this. Another crucial aspect: your commitment.
“Don’t think that since you already have a job and a salary, you don’t need to make an effort in your business,” says the author. “You must have an action plan.”
Take note of the following tips that experts recommend to make your part-time business successful without neglecting the other aspects of your daily life.
Start by doing an exhaustive analysis of the potential of your idea or project. Investigate factors such as the competition of the industry in which you intend to enter, the socioeconomic and demographic level that exists in the area where you want to operate as well as that of your potential clients, and their willingness to acquire what you will offer.
Most of the time this step by itself will help you determine whether you should start part-time or full-time. Be careful: don’t let your passion cloud your vision of reality. If, for example, you discover that there is a real demand for your product or service and that nobody is covering it with that added value that you propose, and that there is a documented base of buyers eager for your offer, then jump in and start. If, on the contrary, the evidence shows that the consumer is not so ready for what you have in mind, but that perhaps in the short term he will be (with the correct marketing and business development strategy), perhaps it is better that you start part time to test the market.
You must also be flexible, since it is very likely that the first version of your product or service is not so successful and you will have to make adjustments (pivots) to adapt your offer to what your target audience is looking for, as is the case with most businesses. . Do not be discouraged. Learn to find small indicators of success to keep yourself motivated. Marketing guru Seth Godin warns that success usually comes six years after hard work.
Before starting, calculate the minimum capital you require to set up your business and what is your investment capacity. Consider basic factors such as: your salary (if you receive it), your savings, the possibility that your family or friends offer you loans or financing for your business, or if your partner or another family member with whom you live can support you with regular expenses while business takes off.
Once you determine if there is demand and research this data, make financial projections to stay on the right track, and detail the goals and strategies you will follow in a business plan. Do not rule out doing all this even if you do it in your spare time; Good planning will allow you to transition from a part-time to a full-time scheme in the future.
“You can do it very simple,” says Beristain, from Tec de Monterrey. “Just a couple of pages in which you answer questions such as: what do you want to sell, how much will it cost to produce it, who will you sell to, how are you going to reach them, how much will it cost to acquire new customers, if you need employees and how much will you pay them, and what is going to differentiate you ”. In the end, defining these key aspects and knowing the business numbers will help you discover whether or not your project is profitable (after paying taxes, of course).
In your business plan you should also include how much profit you hope to obtain and the timeframe in which you intend to achieve them. With this analysis, you will be able to know if you need to maintain a fixed income outside of your venture to support its development, or if you have enough resources to cover six months to a year of expenses for the financial priorities of your project.
How do you know when to quit your job? A good rule of thumb, according to Andrew Sanow, is to wait until your business generates income equal to at least 30% of your current salary. Beristain, for his part, considers that the ideal moment is when your venture generates enough profits to maintain your current lifestyle, verifying that these profits have potential for future growth, above inflation and after taxes.
Another goal you must pursue is that, in the end, your business can function and generate returns without your being present. In this way, you will get that desired freedom of time.
If you start while you work …
- Only you can analyze the situation, but in most cases it is best to let your boss know that you are starting a part-time business. As long as it doesn’t interfere with your job activities, makes you unfulfill your responsibilities, or lowers your productivity, many won’t find it a bad idea.
- Openly discuss potential conflicts of interest with your employer that you might incur. You’ll earn points for being honest instead of making it feel like you have something to hide.
- One more tip: avoid making calls or using your workplace equipment and supplies for business purposes.