Want or need extra income? Check your current obligations and energy level. Starting a part-time business is a partial to 100 percent answer to experimenting with a dream, an idea while maintaining a full-time reliable income. If it works out, wonderful. If not, consider it a test that doesn’t completely ruin your financial security. If you already own a business, experiment with a new idea nights or weekends, or carve out pre-specified amounts of time from the existing business for the new endeavor.
If employed, do not cheat your employer by squeezing in calls and emails during your regular job, nor steal customers. It’s called ethics. If possible, pursue something not directly related to your job. Review employer’s rules and all documents you signed, if any, when you were hired. Are you prohibited from side-jobs or did you sign a non-compete?
Look at your life, current skills, assets already owned, available time and consider options. Most businesses require at least minor start-up funds. Realize many businesses or new ideas do not generate a profit for several months. But some, primarily service-related, do.
Most legal rules and non-legal, sensible actions for starting a new full-time business apply to a side business. Obtain domain name, register business entity, buy insurance, get business cards, create a basic website, open a business bank account, be specialized enough to be paid, create a price list. Keep business and personal funds in separate bank accounts. Clearly identify business checkbook deposits and expenses. Create a paper trail of loans going in and being paid back. Make friends with a tax accountant early in the process.
How much space will the part-time business consume and on what schedule? If you live alone and need to work in a corner of the living room or main bedroom until 2 a.m., okay. Married with three kids, two dogs and a parrot, maybe not.
Decide how your side business will be paid. Quotes? Down payments? Online sales, all businesses and most home owners require invoices. What forms of payment will you accept?
Think ahead. How will you get the news out, handle requests, give refunds? If needed, have response hours on a website, emails and voice mail. “Responses will be made between 6 p.m.-10 p.m.” Know how to keep simple records to determine if the business makes a profit? How long before you give up if it doesn’t work?
If extremely successful, when will you hire help, raise prices, quit the real job or sell? How much profit is required to quit the job or create adequate value to sell? The true entrepreneur wants the challenge to build a business, gets bored, sells and wants to do it again, and again.
Charlene Maurer Finerty, owner of Plans and Profits, LLC, edits, teaches and writes custom business plans. See www.PlansAndProfits.com. She also offers a Write-Your-Own-Business Plan class on DVD at www.BusinessPlanWritingClass.com. Contact Charlene at firstname.lastname@example.org anytime or 343-1515 from 9 a.m.-7 p.m. Her column appears alternating Mondays.