Thinking of setting up a business while employed? We’ve got you covered.
Starting a business can be an exciting and rewarding endeavour, but it can also be a significant leap of faith.
For the vast majority of budding entrepreneurs, the decision to start up is often made while they are still working, which can be a bit of a daunting prospect, especially when broaching the idea with your colleagues and bosses, but it doesn’t have to be that way…
Below, we break down the key considerations and practical tips that can help you set up a business while being employed and make the process as seamless as possible…
Financial security
Embarking on the journey of starting a business while employed can be a shrewd move. By maintaining your current job while building your business, you can enjoy the stability of your regular pay while testing the market, refining your business model, and gradually transitioning into full time entrepreneurship.
This approach not only provides financial security during the early stages of your venture but also allows you to make informed decisions and mitigate risks as you grow your business.
Evaluate your contract and company policies
Before starting your business, it is crucial to thoroughly review your existing employment contract and company policies.
Some employers may have non-compete clauses or intellectual property agreements that restrict your ability to start a business in a related field or use certain proprietary information.
Understanding these limitations will help you navigate your options while staying on the right side of the law.
Maintain confidentiality and avoid conflicts of interest
As an employee, you owe a duty of loyalty and confidentiality to your current employer. While starting a business, it is essential to maintain these obligations.
Avoid using company resources, time, or information for your new business and act ethically and transparently to protect your employer’s interest while pursuing your own goals.
It is essential to maintain open communication and transparency with your employer, informing them of your intentions, and ensuring compliance with any legal obligations.
Time management and dedication
Starting a business requires significant time and effort. Balancing your job responsibilities with your entrepreneurial aspirations can therefore be somewhat demanding but it is not impossible and can be extremely rewarding.
Effective time management, setting priorities and staying disciplined are key. Along with planning your days carefully, allocating specific time slots for your business and ensuring you are making progress towards your goals.
Build a support network
Starting a business can be a lonely journey, particularly while still employed. Therefore, it is extremely important to surround yourself with a supportive network of friends, family, mentors, and fellow entrepreneurs who can provide guidance, motivation, and valuable insights.
Attend networking events, workshops, join online communities, and seek out business advisers who will be able to guide you through the entire journey of starting and growing your business.
Validate your business idea and create a business plan
Before committing significant time and resources to your bold new idea, it is crucial to validate your business idea. Conduct market research, analyse your target audience, and assess the demand for your product or service.
Validate your idea by obtaining feedback from potential customers, industry experts, and other entrepreneurs. This process will then help you redefine your concept and increase your chance of success.
While some may argue that a comprehensive business plan is essential for every start-up, we understand that the level of detail required can vary depending on your circumstances. The key is to have a plan, even if it’s as simple as a one-page summary or notes scribbled on the back of a beer mat!
If you have any questions about how to build a winning business plan, managing your business finances, branding and more, attend our free start-up workshops to learn more.
Taxes, registering with HMRC and keeping records
Depending on the nature and scale of your business, you may need to register with HMRC. Registering your business ensures you are compliant with tax regulations and allows you to fulfil your tax obligations.
Additionally, the UK’s trading allowance provides a tax exemption for individuals earning less than £1,000 from self-employment or casual trading activities. If your business income falls within this threshold, you may not need to report or pay taxes on that income.
However, it is important to note that if you choose to claim the trading allowance, you cannot use other allowances or expenses against that income.
Also, keeping records of your business income and expenses is crucial. Maintain records of sales, invoices, receipts, and any relevant financial documents. This will not only streamline your tax reporting process but also will provide valuable insights into your potential profitability and growth.
Know when to make the leap
Starting a business while employed is a balancing act, and there may come a time when you need to make the leap into full-time entrepreneurship.
With nearly 30 years’ experience and having helped over 4,000 people set up businesses, we can help you with all aspects of starting your own business.
So why not sign up to our free start-up support and get your business journey underway today? It could be just the push you’ve been waiting for!
Enterprising Sunderland is the overarching title for this business support programme and is funded by the UK Shared Prosperity Fund. Delivered by a unique consortium of delivery partners in Sunderland working together to stimulate entrepreneurial ambition across the city.