After a long day at work, Andrew Gideon couldn’t wait to get home. It’s not that he didn’t love his job as a business development manager at a big Australian telco. But he was busy setting up his online retail business which he established in 2006. Every night when he came home, he would head to his computer and start his day all over again.
Gideon left the telco 18 months ago and his business, Ties’N’Cuffs, has been going from strength to strength. With eight staff and a growing client list, it’s expected to turn over about $2 million this year.
Gideon is part of a growing group of entrepreneurs who start businesses while still holding down a full-time job. Statistics from the Australian Bureau of Statistics shows that number of people working for themselves in a part-time capacity jumped more than 15% to almost 390,000 in 2009.
But while the model provides a great opportunity for entrepreneurs to test their business model and develop their owns skills with the secure backing of a steady wage, it is not without challenges, including juggling time commitments, managing potential conflicts of interest and deciding when to leave the safety of that job.
But perhaps the greatest challenge – as Andrew Gideon found – is that running a business while holding down a job is hard work.
“It was a long three years,” he says. “I definitely didn’t get much sleep.”
“While being an employee, I registered a company name, built a website and secured some products. I was juggling early mornings and late nights setting up the website and building processes around how it would all work so that my staff could run it during the day.”
“I would finish my work and I would be back in my office at home working late nights and then I would be up early again at the morning at 5am or 5.30am working on Ties’N’Cuffs and then off to work for the day.”
The key to running the business without losing his day job was putting systems in place to ensure he did not always have to be there. A good website reduced marketing and sales costs as customers could always be referred there for information when he was not available to explain things in person. He also had people working for him taking orders.
Nevertheless, he was stretched to the limit. In a sense, it was worse than working two jobs because in effect he was in two places at once.
“During lunchtime, I would spend a bit of time on the internet doing research and then I was back at work again,” he says.
“I had other people doing order fulfilment and packing but nothing strategically. All the strategic work was done by me and that was done on weekends. We didn’t have many free weekends for a couple of years.”
Gideon admits that he would “field some phone calls every now and then” but he was still meeting targets and making budget. However, the deeper he got involved in his business, the harder it became to stay focused on his day job.
“I felt I wasn’t able to give them my complete attention any more,” he says. “At that point, I realised it wasn’t fair. I been there for nine and a half years and had a good relationship with the company so I put forward my resignation six months prior to my long service leave being paid.”
In the end, the business made his mind up for him.
“There was a light bulb moment when I secured a substantial corporate order for about $100,000 and from that day, the business changed direction. We shifted our focus to the corporate market.”
“We had tripled our revenue from one transaction. With me selling corporate telecommunications and working in the corporate world, I saw a massive opportunity.”
Still, it was an emotional time. The telco was his first job and he had carved out a successful career there over nearly 10 years. Not that he had kept his business under wraps. His work colleagues and supervisors knew about it and that, he says, was only right because “they created the beast which is me, they unleashed me and taught me everything I know”.
Ron Stark, the co-founder and managing director of Business Kits, a company that helps start ups, said many people start out as part-time entrepreneurs.
“Unless you’re very well heeled and you’ve got money to throw at it, most people wear two hats until they become established in the business,” Stark says.
He says the big difficulty comes with the inevitable conflicts of interest. Do you take time off work to attend to a customer? Or do you do the job you are paid to do and find some other way of dealing with the customer’s needs, maybe hiring someone else? And what happens if you end up competing with your employer while you are still working for them?
“With your target market, realistically you might only be able to make contact with them, negotiate with them, make phone calls and answer inquiries during business hours which is the time when you are duty bound to serve your current employer. Juggling loyalties and obligations is a difficult one,” Stark says.
“There is a natural tendency to think of starting your business as a variant of where you’re currently employed. Unless you have a very strong interest in art and you are employed being a motor mechanic that is quite easy because you are not in competition with your employer. But if you are starting your own business almost as a career move or a career-enhancing step, then you have the problem of trying to build your own business in the mould of your current employer and that creates a conflict of interest. You could find yourself subject to litigation to stop you going into competition with your previous employer.”
Of course, not every part-time entrepreneur is a competitor. There are stories of lawyers running restaurants at night, of financial services advisors setting up cake businesses. But even they must have systems to ensure things are running smoothly while they’re at their day jobs. According to Stark, part-time entrepreneurs need to:
He says one of the best ways to research the market and build contacts is to join local business networks. “The objective of networking is not to meet your customers but to develop relationships with people who can refer you to their customers,” Stark says
There comes a point however where there has to be a leap of faith when you quit your job and take the plunge. Much of that, he says, depends on the demands of your target market. If you can no longer do it part-time, it’s time to pull the pin.
The important part about keeping a day job is it pays your way while you are preparing to leave.
“Let’s say it takes you three to six months to get your business together,” Stark says. “You do that while you are employed.”
“Don’t resign from your job and spend the next six months preparing because you are only burning money that you needn’t otherwise have spent.”
“If you’re going to start a business part-time, research the market, research your competitors, research the opportunities, get the outsourcing done, locate quality people to whom you can outsource, and get your website done.”
“It’s like building a house. You get the design and foundations done and at some point, you move in.”
Julia Bickerstaff, founder of the Business Bakery which helps women run profitable businesses, started out as a partner at Deloitte. She spent her final years there preparing to leave, doing the groundwork for the business without actually making any money. That included writing a book How To Bake A Business, published after she left. The aim was to carve out a brand and reputation.
She recommends people to be up front with their employer. “The risk is you might not have your job any more but the worst risk is someone will take you to court and you then lose your professional standing,” Bickerstaff says. “If it can be misconstrued that you are stealing clients away or using their IP for your own purposes, that is really dangerous. The other side is the lawyers get involved and you have no business and you can’t get another job because you have been accused of pinching clients or IP. It’s best to be up front about it.”
She says anyone who starts a business closely aligned to the one they are working in needs to be very careful. And if they are doing things like taking calls, they need to be very subtle. But as a rule, she has a simple suggestion: don’t do it.
She says everyone knows when it’s time to quit and head off on your own. “When people try to do two jobs, they are trying to be an employee and trying to run a business and they can’t be as energetic about both things,” she says.
“What happens is that they are really passionate about running the business and they start not performing as well at work because they’re not interested any more.
“When you start performing not as well in your day job, you have to go. Otherwise, you’ll be packed off and that happens. And if financially you can’t afford to go, you have to pull your horns in on your other job and get back to what you are being paid to do.”
Being a part-time entrepreneur is hard work. It stretches you in many directions. But doing other things on top of your day job is also a great way of teaching you what you can and can’t do, what some would say you are destined to do. As Richard Branson famously said: “I wanted to be an editor or a journalist, I wasn’t really interested in being an entrepreneur, but I soon found I had to become an entrepreneur in order to keep my magazine going.”
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
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