Home Business
(featured column)
One Foot In Each Camp
by Elena
Fawkner
You have a full-time job but secretly you yearn
to break free of the corporate shackles and strike out on your own. You
have a great idea for a business but you need the income from your job to pay
your mortgage and to feed yourself while you get it underway. Sound
familiar?
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This article considers this dilemma and suggests
how you might make the break from paid workforce to your own full-time home
business when financial necessity dictates a regular and uninterrupted monthly
income.
This may be obvious but it bears restating: if you need a regular paycheck to
survive, DON'T give up your day job until you have another regular, consistent
income stream to take its place. This applies even if you are absolutely
convinced that your business idea is a surefire formula for financial success.
It may be, but even the most successful businesses take time to get of the
ground and most have a few false starts before they finally take off.
If you can't afford to give up your paid income while you build your business,
then you have no choice but to start your home business as a side project and
run it alongside your job. To make any sort of progress in your home business,
plan to devote two to three hours a day at an absolute minimum to your business.
Because your time is extremely limited, you need to be ruthlessly efficient with
what you do with it. For example, can you find spare pockets of time during your
workday? If you are running an internet-based business and use a computer as
part of your day job, this MAY be a possibility but be careful here. Don't risk
your job for your business if you can't afford to lose that income.
I'm not suggesting here for a second that you
conduct your business on company time, at least when you have work to do. If you
have some downtime during your day, though, then do look for ways to use that
time productively.
Other ways to squeeze time out of your day include foregoing TV in the evening
and/or getting up an hour earlier. In other words, get your priorities straight.
If your home business is related to your paid job, be extremely careful not to
create a conflict of interest for yourself. In particular, do NOT deal with your
employer's clients as part of your business. Not only is it unethical but, when
the time comes and you make the break from workforce to full-time home business,
those clients may well follow you and your employer would have every right to
take legal action against you for breach of your employment contract.
Another difficulty you can get yourself into in this area is where to draw the
line, if challenged, between what is confidential information and what is just
general knowledge you carry around in your head. You cannot use confidential
information you obtained in the course of your job in your business. Your
general knowledge is not considered confidential information.
Examples of confidential information include
customer lists, knowledge of the systems and procedures of your employer's
business, trade secrets and the like. For these sorts of reasons, it really is
advisable not to choose for your home business what you do in your job.
It is a good idea to be discreet in the workplace about your extracurricular
activities. Don't go out of your way to advertise the fact that you have started
your own business. At best you will expose yourself to the increased scrutiny of
your boss who may be concerned you will conduct your business on company
time.
At worst, you may jeopardize your chances for
advancement if your outside activities convey the message that you are only a
temporary fixture who will leave as soon as your business starts generating
enough income for you. Although you may not be particularly concerned about
career advancement because you plan to leave to run your own business, at least
consider your position if your home business dreams don't pan out the way you
hope. It is very difficult to resurrect an ambitious image once you've let it
slide.
Finally, and especially during this 'double duty' period be sure to allow
sufficient time each week for relaxation and taking care of yourself. This means
paying attention to your nutrition, exercise routine and getting adequate sleep
and well as allowing for pure downtime. The demands on your body during the
double duty period can be pretty intense.
You don't want to be taking on this challenge if you're rundown, unfit and
aren't getting enough sleep. All areas of your life will only suffer if you're
in this state. So, stay ahead of the game by eating right, exercising and
getting plenty of sleep and relaxation.
After some time, your business will begin to generate income for you. As you
start generating more income, you will begin to turn your mind to deciding at
what point it becomes uneconomic to continue your day job. This is because, at a
certain point, your business will reach 'critical mass', the level at which it
becomes uneconomic to continue your day job because the return you get for your
time and effort is greater from your home business. This is because your salary
doesn't vary according to effort and results (at least not directly), but your
home business income does.
As a general rule, you will need to wait until your business is consistently
generating the same level of income on a proportionate basis to the time you
spend on it before you start seriously considering quitting your day job. Once
you get to that point, test the elasticity of your income. If you double the
number of hours a week you spend on your business does your income increase
commensurately? If so, your income is elastic. If you double your time input but
your income only increases by half, then your income is somewhat
inelastic.
You need to calculate how much time and effort
you need to expend to generate in the form of business income what you are
currently generating from your paid job. If this is 'reasonable' by your
standards then you can begin to seriously consider quitting your day job. If
not, you need to find ways to leverage your business so you can generate more
income from a more acceptable commitment of time and effort.
Only when you have satisfied yourself that you can generate from your business
sufficient income on a CONTINUOUS and REGULAR basis, should you consider
quitting your day job.
That's only the threshhold question, though. Behind it are a whole host of other
issues to think about before making the break. For example, how will you fund
time off? As a self-employed person you can forget about paid vacations.
Even if this doesn't concern you financially, consider what will happen to your
business if you're not around for two weeks. Also, as a corporate employee, you
probably enjoyed comprehensive medical benefits at your employer's expense.
Again, these are gone. Be sure you take out your own insurance and think about
income protection insurance as well.
If you contract an illness that puts you out of
action for a month, again, what happens to your business? You will need to take
out normal business insurances as well, such as public risk. Consider here
whether clients will be visiting you at home. If so, ensure your insurances
cover injuries to business clients. This is something that probably won't be
covered under your general homeowner's policy.
Build up a network of contacts before you quit your day job. Not only will they
be an important asset to your business in the longer term, they can also help
alleviate the feelings of isolation that you can expect to experience early in
your home-based career.
Something else to do before you quit your day job
is to prepare yourself mentally for the realities of working from home such as
the need for self-discipline, feelings of isolation, your tendency to
procrastinate to name a few. Educate yourself by reading about what running a
home business is REALLY like to minimize the culture shock when it happens to
you.
Prepare your family too for the changes that they can expect. They need to
understand that although you are at home, you are still working and they need to
respect your limits during worktime. Of course, set up your home office as if it
were a corporate office. Make sure you have two telephone lines and dedicate one
to your business telephone and the other to your fax/internet connection.
And one final piece of advice, when you first start working from home, establish
a "going to work" routine, at least to start. This will get you into
the routine of working even though you are not leaving the house and you won't
develop bad habits (such as procrastination or lack of direction) that will be
difficult to break later on.
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Copyright
© 2003 by Elena Fawkner
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