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Many of us feel like we’re tied into full-time employment yet have a burning desire to break free from the self-imposed PAYE shackles and start our own business.
Starting a new business can be scary. It’s a leap into the unknown and there’s a lot to consider. When you’re employed full time by a company and looking to start a business in your spare time, these pressures can be a lot higher. You’re not alone – the Office for National Statistics stated in a 2014 study that over 350,000 people have a second self-employed job.
If you’re still in the process of settling on your small business idea, check out our “How to find your gap in the market” and “10 ways to stress-test your small business idea” articles for more information and guidance.
Check your current employment contract
It’s advisable to read your current employment contract from front to back before making the decision to start a business while employed. Are there any clauses in your contract that state you’re unable to start your own business? What about whether there could be a perceived conflict of interest?
Raise any questions with HR – who can often deal with enquiries confidentially. The last thing you would want to happen would be to breach your contract and risk termination.
Stealthy Startups
Many secret entrepreneurs never tell their boss about their business ambitions. They work on them quietly and, if the day comes that the business can support them financially, they hand in their notice. As tempting as this might be, it’s not really good form.
Once you understand how starting a business can affect your employment status within the company, it’s always a good idea to have an open and honest conversation with your boss. How is your current employer able to support your new business? If you choose to set up your new business as a limited company and register as a director, this information is viewable to the public – a search on the Companies House website by a suspicious employer could reveal your new business.
Keep in mind that more and more employers are supportive of go-getter business acumen and will help employees with bigger ambitions realise those dreams. Be aware of employment benefits – are you able to approach your current employer about flexible working hours or a reduction in your contractual hours? Bosses opposed to staff having side-projects are now the exception rather than the rule. As long as it’s not affecting your day-to-day work, why should your boss object?
Who needs to know?
You’re naturally excited to be starting your own business, and rightly so. It’s your decision whether to tell colleagues or not – would they be supportive and actively encourage your external endeavour? Or would there be potential jealousy resulting in tension and conflict?
Offices tend to be hotbeds of gossip and Chinese whispers, and it’s not uncommon that even idle water cooler chit-chat makes its way around the building. Although there are exceptions, the knowledge that you’re imminently checking out can sour employer/employee relations and may make your last few months at work a real nightmare. Perhaps it’s best to keep your mouth shut about your new business unless you know you can trust the person you’re talking to.
Be respectful
Whilst your desire to leave your full time job may be burning inside of you, remember you’re still employed. Be respectful. Don’t waste company time working on your business idea. Leave on good terms – you never know when you’ll have to call upon your former colleagues or boss for support.
Finance awareness
If you’re starting your own business, as either a sole trader or limited company, you’ll need to let HMRC know. This is so you can file your Self Assessment on time and pay the correct tax on your income. It is a legal requirement to inform HMRC once you start earning from your business. Don’t create any additional worry or concern for yourself by not having your taxes organised. We’ve got a great article on the tax implications of being self-employed and freelancing on the side, but you can also explore our range of online tax calculators to help accustom yourself with the figures you can expect.
The answer to whether you’re a business or not is all to do with your intent – or as HMRC calls it, your badge of trade. And, as you’d expect from the people that brought you VAT, IR35 and National Insurance, it’s really complicated.
If you’re deemed to have a badge of trade you’re operating a business, no matter how much you insist it’s just a hobby. Factors that can influence your badge of trade include the frequency of your transactions, whether or not your transactions look and feel like those of registered business (if it looks like a duck and quacks like a duck etc.), and why the transaction happened in the first place.
If you’re on the receiving end of payment for any activity – a paid post or link, product placement, attending an event or vanilla advertising – you are instantly a business as far as the taxman is concerned, so get yourself registered!
Work/life balance
Working two jobs can be very tricky to juggle. Ensure you make time for yourself, friends and family and have designated pockets of time where you aren’t working. It’s about work/life balance, not work/work balance.
Overwork yourself and both endeavours will suffer. Devote too much time to one and you’ll hinder the other. What if you wear yourself out setting your new business up, only for it to fail, leaving you in a job at which you’ve been underperforming for months? It’s a hell of a balance to strike.
You have a few options here. Firstly, as mentioned previously, you can request flexible working from your employer. This right was extended to all employees in 2014 (it was previously only available to those with family commitments) – however, you only have the right to request it. Your employer is still well within their rights to deny that request if they have a legitimate reason.
Secondly, you could look at going part-time. Most employers are open to the idea of job shares or reduced hours these days – it certainly doesn’t hurt to ask if you feel you’re working yourself too hard.
The third option – and the one most moonlighters trump for – is to just manage your time very carefully, and be aware of the impact on your wellbeing and productivity. The trick is to find a balance that works for you. Maybe you can devote one weekend a month to your new business, or maybe weekday evenings. Make sure you have downtime to spend with family and rest.
Be organised
If you’re anything like me, being organised is the only way you’ll ever get things done. Structure your precious time well and you’ll find your productivity levels soar. Set realistic goals and stick to them. A good example would be to look at what do you want to achieve over a 30/60/90 day period or construct a week by week checklist of what you want to achieve. There are many Apps that can help organise your time – have a browse and see what fits your lifestyle.
Find support
There are many resources to help support you whilst you consider or plan to start your own business – these range from funding and grants to crowdfunding, or if you’ve got a few flush friends peer-to-peer lending. Networking is your best friend so don’t shy away from local events – your cities Chamber of Commerce is a good place to start.
