“Tom, I want to have some kind of business, but I’m not sure if I should go all out at first and do it full time, or just start part time and see how it goes.”
This is a common question people ask and I wish it was a simple answer, but this is how, through coaching, you work through the issue of what works best for you and your situation.
Here are some things to think about when trying to decide the right path for you and whether you should start a part time or full time business.
There’s pros and cons to every decision, that’s nothing new. And I’ve done both sides of the coin here in having my business be full time and part time, based on the economy and the market needs…also my family needs at the time.
I think I have enough experience from both angles to talk about this and hopefully help you to have more clarity when you’re making your decisions.
Even if, ideally, you plan to run your business full-time, starting it up on a part-time basis can offer some significant advantages:
• It reduces your risk because you can rely on income and benefits from your full-time job and lets you have some additional ramp up time.
• It gives you more time to work on your 3 P’s (products, pitch and price)
• You’ll have more time to test the market and get a better feel of how easy or hard building this business might be
• More time to niche down to position yourself to stand out better instead of blending in
• It also allows your business to grow more gradually
But yet, the part-time path also comes with potential pitfalls as well:
• It can leave you with less time with family, because now you’re working on building your business when you’re not working your job
• And…as a result, you’ll feel like you’re always working. But let me say something to this point, if you hate your job and love working on your new business, and the ‘work’ is enjoyable, then, I can tell you that you might actually find yourself rushing to the computer when you get home and turning off the TV more and more, because, it really doesn’t feel like work at all.
• Clients may feel you’re not available as much as they need you to be
• You also run the risk of burning out.
Holding down a full-time job while running a part-time business can leave you with little, if any, leisure time and your personal life may suffer as a result.
That is not to say a part-time business can’t work. You’re going to need to have excellent time-management skills, strong self-discipline, and support from family and friends. You’ll need a serious commitment and a strong vision that’s connected to ‘your why’ to keep you motivated. Don’t think that, since you already have a job, you don’t really have to work hard at your business. You must have a plan of attack.
I like to think of it this way. With 365 days in the year, if you take a small step every day toward your goal, at the end of each week, you’ve taken a serious step forward. At the end of each month, a huge leap.
So set some reasonable milestones that align with starting and running a part time business and celebrate those wins when the milestones are reached. Use any progress as a motivator to keep you going.
Here’s a run-down of what you’ll want to consider before choosing which path is more appropriate for you and your business.
If you find there is an unmet need for your product or service, no major competition and a ready supply of eager customers, then starting full-time might be the best plan. On the other hand, if you find the market won’t support a full-time business, but might someday with proper marketing and development, then it is probably best to start part-time.
Do some research on the competition in your industry, the economy in your area, the demographic breakdown of your client base and the availability of potential customers. If you are thinking of opening an upscale beauty salon, for example, jot down the number of similar shops in operation, the number of affluent women in the area and the fees they are willing to pay. Maybe even ask them as they’re walking out of that salon what they like and don’t like about it? They don’t know you’re doing research. To them it just looks like you’re interested in being a potential client.
The next step is to outline your goals and strategies in a business plan. Now I just mentioned this recently in another podcast about how many pages you’ll need in the BP. Whether it’s 3-5 pages, whether it’s one page, or closer to 20 pages like mine, you just need to know you’re not going to have any serious surprises because you didn’t think this through and keeps the business on track.
Part-timers should write a business plan, too, as it will help you transition to full-time later on.
Before launching a full-time business, most experts recommend putting aside enough money to live on for at least six months to a year. Now if you do live off your savings, you’ll need a way to earn enough through the business to not only replace what you’ve spent but to make it worth your while to have spent it in the first place.
I’m all about being profitable, and spending money on the business without doubling what you’ve spent just turns your ‘business’ into an expensive hobby.
But completing your business plan will show you in detail how long you can expect to wait before your business begins earning a profit.
If you’re leaning toward starting part-time, then set financial priorities. How do you know when your business is making enough money that you can quit your day job? A good rule of thumb might be, when you reach a part time income of 75% of your full time income, you can make the leap and switch to full time.
My business coach Mike Kim promised his wife that he would wait until he MATCHES his full time income for 3 months straight to quit his job and run the business full time.
The emotional and psychological side of starting a business is just as important in your decision as the financial and market aspects. Do your closest family members support you starting a business? Do they understand the sacrifices both full-time and part-time businesses are going to require? Then work together to develop practical solutions to the problems you might run into. Also, lay ground rules for the part-time business. For instance, agree not to work on Sunday mornings, for example, or not to discuss business at the dinner table.
Don’t Forget About Your Own Needs
If the idea of taking the full-time business plunge keeps you awake at night then perhaps a part-time business is best. Building and running a business on stress spells disaster.
Assess the effects of both a part-time and a full-time business on your life. You’ll be most likely be working evenings, weekends and lunch hours, if not your holidays, sick days and vacation time, too. This is the kind of commitment you will need to make if you expect your business to be successful.
Whether to start part-time or full-time is a decision only you can make. Whichever route you take, the secret to success is an honest assessment of your resources, your commitment level and the support systems you have in place. When you consider the pros and cons of both situations, and you’re willing to pay the price either way, you’ll be able to make the right choice.
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