Find the Right Biz for You Series (Part 6)
When determining the ideal small business for you, make sure you give consideration to potential pitfalls and address them before they become significant issues.
Caution #1 – Current Employer Considerations
Many people start their businesses as a side business, building up their new venture during off hours, after work and weekends, while continuing to work a full time job.
A side business is a great way to test the waters of your business idea; however, there are some preliminary cautions to consider.
If your idea for a business involves providing a similar service or product to what your employer currently provides, consider whether you have an employment agreement with your employer. If so, check to see if it contains a non-compete clause. If it does, read it carefully to see: what the clause prohibits you from doing; for what period of time; and within what geographic range. Then check with an attorney who works in the employment law field in your state. Even if the clause appears to not apply to your circumstances, it is important to obtain a legal opinion. Your employer might see another perspective. Additionally, each US state has its own regulations and court opinions pertaining to non-competes. In some states, these agreements are close to unenforceable with the requirements for these clauses being quite stringent. In others, a broader interpretation may be permitted.
Alternatively, it may appear that the non-compete clause does directly apply to your new business idea. Don’t be discouraged. Again, check with an attorney in your state. Sometimes employers create these clauses without even knowing (or caring) whether they are enforceable because just having the language tends to have a chilling effect and may deter someone from working for a competitor or becoming a competitor just for the clause’s existence.
A reminder, I am not an attorney and am not providing legal advice. I’ve just worked in the employment law compliance field long enough to know that if such a clause exists, an attorney’s opinion is critical before moving forward with your business.
Even if you do not have an employment agreement between you and your employer, that does not mean you are in the clear. There may be a non-compete clause in your employment manual. If so, seek that legal opinion!
Other company policies may also require consideration, whether or not your proposed business is related in any way to that of your employer’s.
One policy to look out for is usually called something like Outside or Secondary Employment. What these policies typically state is that your job with your current employer is your primary responsibility and no other job or venture may take priority. Any time your employer requires you to work, including overtime or any time not on your regular schedule, you may not be permitted to allow another job or business to interfere.
This policy may also state that you are required to tell your employer if you intend on working for a second employer, including yourself. Prior approval of your employer may be required.
Your Time, Your Equipment, Your Supplies
Often it is tempting to work on researching your new business ideas or working on establishing your new venture while work is slow at your employment location. Fight the temptation! Never put your current source of financial income in jeopardy by crossing this line.
Additionally, never use company equipment (e.g. computers, phones, software) for work on your business. This includes company-owned laptops or phones you are permitted to take home. Usually companies limit use of their equipment to their business purposes only. Same goes for office or work supplies, no matter how seemingly small or insignificant.
Tell Your Employer
If you feel your employer will be supportive of your decision to begin a side business or start a new small business, by all means, let your bosses know. There often are benefits to having this discussion. If your idea is complementary to your employer’s business, there may be opportunities for both ventures to support each other. My prior employer became my primary source of client leads when I started up my first business. I referred business to them as well.
People frequently leave their employers and become consultants to those businesses making it a win-win situation for both parties. Not only may you have a good client right from the start, but your former employer also may save the overhead expenses of keeping a full-time employee on the payroll.
Caution #2 – Avoid Overwhelm/Finding Time
As with most people, you likely have a pretty busy life to start with. Be careful to set boundaries to avoid overwhelm and stress. Whether you start this as a side business or jump right in full-time, starting a business takes a tremendous amount of time and effort.
Key strategies for avoiding overwhelm:
- Set aside regular days and times for working on your business. Treat it like a second job if you currently are employed. Even if you are working on your new business full time, group your tasks into categories, then work only on one or two categories per day at particular designated times. This helps you maintain focus and eliminates the overwhelm from pages of to-do lists.
- Ensure you have support of key people around you.
- Cut nonessential activities and stop committing to things that do not align with your priorities.
Key strategies for finding time:
- Determine your “Facebook Factor” for lost time, similar to the Latte Factor David Bach created for finding lost money. Keep a log for a few days, documenting the activities you are performing throughout the day. You are bound to find time leaks with time spent on: social media, checking email, checking online news, catching “just a few minutes” of the latest hottest Netflix show. Limit these activities and use the found time to focus on your new venture. There are several apps available to help you track your time. A few include: Toggl, ATracker, and RescueTime.
- Use a blocked time weekly schedule. Group all of your activities that require significant amounts of time, both professionally and personally, into categories. My major categories include: Work, Business Development, Business Administration, Personal Care, House Administration, and Meetup (I run two active Meetup groups in my area that require chunks of my time). What are your major categories of activity? Once you have determined these, sit down with a blank weekly category, block out time you wish to keep open for time off or time with family or just to catch up on activities, then schedule blocks of time throughout the week to take on just one or two of your designated categories per day.
- Get help! In what areas can you hire help or use technology to free up your time for income generating activities. Examples of help to consider include:A virtual or in-person assistant
A house cleaner
A pick up and drop off dry cleaning service
An online grocery shopping and delivery service, like Peapod or Amazon Prime Pantry
Caution #3 – Avoid Scams
If someone offers an opportunity to make money quickly with little effort and “just a small” investment, run for the hills! There are many opportunists out there with whom caution should be taken.
Here are a few to particularly watch out for:
- Work-at-home offers that require a pay-in
- Medical billing home businesses
- Investment or business opportunity seminars (not to say there are not good ones, but do your research)
- Anything that requires paying for the promise of a job or business
- Certain multi-level marketing plans that actually are pyramid schemes (again, there are many good ones out there, but do your research to make sure the one you are considering is reputable)
- Email messages offering opporunitites for you to generate income but that require you to immediately provide personal data or financial information. Here is a recent article in my local newspaper warning University at Buffalo students about this type of activity: http://buffalonews.com/2017/02/09/feds-warn-ub-students-email-scam/
Don’t forget that the best small businesses are those that involve something you enjoy doing. Often these scams don’t even come close to this test.
I will be continuing the series on finding your ideal small business idea. Soon, I’ll be discussing how to determine the viability of your business idea. We will review current methods for researching your proposed industry, business, and competitors.
You will also hear an interview I conducted with one of my former clients, a gentlemen who started off his career as a former college basketball coach and transitioned into the peak pinnacles of the entrepreneurial world of finance.
Free eBook: Passion to Prosperity: Finding Your Ideal Side Business
If you would like more information about how to find your ideal small business, please help yourself to a free copy of my eBook: “Passion to Prosperity: Finding Your Ideal Side Business”. Although it was written with side businesses in mind, the process for determining your own small business is very much the same.
Also, go back and listen to Episodes 1, 3, and 5 of this Series, if you haven’t already.
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