To make your start-up a success, keep your day job
By Jenny C. McCune and Sheyna Steiner • Bankrate.com

Sometimes to be your own boss you have to keep working for a boss while you launch your new enterprise.

It wasn't until a year after Elizabeth Will opened The Sports Section that she finally quit her day job at a local bank in Marion, Ill. Four years into the new enterprise, her husband Tim also joined the combination employee/entrepreneur world. While helping his wife run her youth-sports photography franchise, he maintained his 30-hours-a-week job at the post office.

Starting a business while still working as an employee elsewhere is typical. "It's what most experts, myself included, recommend," says Denise O'Berry, president of the small-business consulting firm The Small Business Edge Corp. in Tampa, Fla.

The primary reason for entrepreneurial moonlighting: money.

O'Berry estimates that starting a business requires a nest egg of at least six months' or, better yet, a year's worth of living expenses. Most start-up owners don't have that kind of cash to fund a business and still pay personal rent, grocery and utility bills.

A chance to take chances
An advantage of starting a business on the side is that you have a chance to experiment. It's a lot easier to make changes while the venture is a sideline and not a full-fledged, independent concern that you must rely upon for your livelihood.

"It gives you the ability to test and see whether your business is going to go or not," O'Berry says. "It can help you determine whether you are focusing on the right market or whether your business idea needs tweaking."

Similarly, staying employed elsewhere lets you keep your options open. If your business idea turns out to be fatally flawed, you can close up shop with the security of having income from your day job.

The biggest drawback to working somewhere else while launching a company is the time crunch. You'll be working long hours to fulfill your obligations to your employer and to your fledgling company. "You will be exhausted," O'Berry says.

That's no understatement according to entrepreneur Tina Kuna. In 2002, Kuna and her business partner, Stephanie Allen, launched a company called Dream Dinners in Washington. Originally conceived by Allen as a fun gathering of friends to easily put together frozen meals for their busy families, Dream Dinners quickly gained so much momentum that the pair realized they had a business on their hands.

"It's like running a mile a minute," says Kuna. "In our first month in March of 2002 it turned into four evenings that we held these get-togethers. After that, we said, we're onto something here. So we put together a small business plan and decided how we were going to run the sessions and it grew to 120 customers in April in Washington and now there are 2 million servings that go out the door nationally."

The two kept their day jobs in the beginning. "I had a full-time job," says Kuna. "And, Stephanie was still catering here and there, so those were the tough times. I would get up at 6 a.m. and do my full-time job and quit at about 3 or 4 p.m. and join Stephanie at the catering kitchen to do Dream Dinners and get home at about 2 a.m.

For small business owners, dealing with explosive growth right out of the gate is a high quality problem and one that Kuna cites as Dream Dinners biggest challenge during the first year. "It was such a tremendous success from the very beginning, it was physically and mentally demanding -- keeping the balls in the air with the family and creating this whole new business."

It's not only the entrepreneurs who must suffer through their business' growing pains; the families feel it as well. "They were very, very supportive," Kuna says. "I have three kids and a husband and that first year I was working 18 to 20 hours a day and my husband was at home picking up the things that I wasn't able to do. It was also a sacrifice on my kid's parts but it's much better now. And it was the same with Stephanie's family. In fact now, our husbands work for us."

The Wills, who started The Sports Section while both were otherwise employed, say the best way to coordinate a full-time job and a new business is to budget your time. The organization won't give you more hours in the day, but it will help you do as much as you can in the time you do have.

O'Berry thinks you should handle the starting of a sideline business much as you would any other project. "Come up with an action plan, establish deadlines, determine what you want to get done, how much money you will need," she says. "Then break it all down into bite-size, achievable steps."

Dealing with dual loyalties
Another disadvantage is that you won't be able to grow your company as quickly as you would if it were your full-time endeavor. But that's not necessarily a bad thing, O'Berry says.

"I think that slow and steady is always better than fast and furious," the Florida business consultant says. "There's nothing wrong with growing a company slowly."

And you'll have to deal with whether to tell your boss about your new company.

It all comes down to your relationship with your employer and what kind of a leader they are. "I was very fortunate that I had a great employer, he was very supportive and willing to work with me," says Kuna. "He was excited about the opportunity for me. I was very lucky."

While each entrepreneurial situation is different, O'Berry believes it's usually better to tell your employer what you intend to do. "If there's a possibility of a conflict, you definitely should tell your boss," she says.

By doing so, you have an opportunity to work out problems. You'll also increase the odds that you can stay employed rather than being fired because your boss found out after the fact that you started your own business.

Regardless of whether you tell your employer about your new venture, be sure to keep the two enterprises separate. Continue to be professional at your salaried situation; don't make calls on behalf of your new business while at your "old" job.

Given the high turnover rate for startups, it's smart to stay on good terms with your employer just in case you have to depend solely on your full-time job again.

Jenny C. McCune is a contributing editor based in Montana.

-- Updated: Jan. 16, 2007