You’ve always dreamed of striking out on your own, but the thought of losing that regular paycheck has kept you firmly rooted to your job. Or maybe you recently retired and are ready to try your hand at entrepreneurial pursuit. Perhaps you’re saving for your kids’ college, but tuition costs are growing faster than your bank account.
A part-time business can be a sound way to test the waters of self-employment before deciding whether to go ahead and take the plunge. It’s also a way to feed the entrepreneurial spirit and bring in extra income without requiring you to sacrifice your regular employment. And it’s becoming increasingly popular, according to recent statistics.
IDC/Link, a Massachusetts-based market research firm, counted 11.8 million part-time self-employed people working from home in 1996, up from 10.8 million the year before. These are people who are doing everything from wallpaper hanging to bookkeeping to computer consulting.
Many businesses spring from a hobby or pastime. The person with a fondness for figures may find himself doing tax returns for friends and neighbors. A seamstress may have found her start sewing clothes for relatives. However, many business “moonlighters” find success by spinning off their professional skills into a part time business. Think of ways to market your job skills off the job, being mindful not to put yourself in direct competition with your company. If people are willing to pay for your skills and talents take that as a sign that it’s time to go ‘pro.’
What to look for in a part-time business
• As with any endeavor, you have your best shot at success if you do what you know or do what you love. Can you parlay your professional talents or skills into your part-time business? Can you turn a hobby into a money-maker? Assess your skills and talents and research your potential market.
• Choose a business that you can ply in your spare time. If your regular job is Monday through Friday, 9 to 5, your business should be one you can tend to on evenings and weekends. A business serving lunch to busy office workers would not mesh with your schedule, but one writing computer software or selling handmade quilts at weekend crafts fairs would.
• Avoid a business that requires hefty startup costs. If you’re starting part-time, it may take longer than you’d like to recoup your investment.
Drawbacks of part-time businesses
The biggest drawback is the amount of free time your part-time business will use up. Between full-time employment and moonlighting, part-time business owners have to be careful not to neglect their personal lives. In the enthusiasm to get a new endeavor off the ground, it’s easy to ignore warning signs of impending burnout until it’s too late. Be sure to carve out time for yourself and your family. Also, try to get the family involved in your business. By making spouse and children part of your project, you will head off potential resentment.
Moonlighting part time can lead to a full fledged, full time business. If you decide to quit your outside employment to devote yourself entirely to your endeavor, be sure to first consider the extra costs of self-employment. These include the loss of paid health benefits and the extra insurance you may need to cover your business equipment. Also, be prepared to lose money or just break even at first. You should have a cushion of six to 12 months’ savings to see you through to the day when you start turning a healthy profit.
But just because your part time business is successful doesn’t necessarily mean you have to kick into high gear and become a full time business owner. The beauty of working for yourself is being able to control how big your company becomes. Do what feels right, and above all, have fun doing it.
