One of the biggest differences between running a business on the side and quitting your job to run it full time is that you lose the security of a steady paycheck. That loss of income and the uncertainty as to whether it will ever come back is enough to make anyone pause and reconsider quitting their day job.
But what if your part-time venture is beginning to pick up steam, and you earnestly believe that it needs your full, undivided attention? While it can be scary, there are steps you can take to make such a leap less daunting.
When you begin your business in earnest, take time to reduce your clutter. Working out of a messy office will eat much more time than it takes to get everything organized.
Speaking of time, making the transition to full-time business owner means also becoming much more self-motivated and coordinated. There is no one to remind you to clock in or to hound you about being late.
It’s great to go about the day without being micromanaged, but be careful. It’s just as easy to slip into a state of complacency. Organize your space, set a schedule and stay disciplined.
There is always going to be some element of risk involved in whatever you decide to do next. But there are also actions that a new full-time business owner can take to reduce some of that risk.
As a part-time owner, chances are high that your business is a sole proprietorship — sort of the default business structure. Unfortunately, that means that you are responsible for your business’s debts, and if things go south, debt collectors may start trying to take your personal assets to pay for those business debts.
When you jump to full-time, consider forming an LLC or S corporation. There are different advantages and disadvantages to these structures, but they will help protect your personal property by separating you and your business’s debts.
Make saving a priority
Take full advantage of that steady paycheck for as long as you have it and save. Anyone looking to branch out and start a business has to use every cost-cutting measure out there so they have breathing room when trying to get their new business to turn a profit. Advisers typically recommend having enough saved up to pay for four to six months of living expenses. Luckily, if a business is being run part-time, it may be pulling in money already.
There is no magic number for saving — it just needs to be enough so that you don’t have to dig for change to pay your electric bill. Meet with an accountant, crunch the numbers and make sure you’re comfortable with the recommendations they give on budgeting and working with your financial situation.
Part-time owners know their company can draw customers, sell a product or service and bring in money since it has already been doing just that. This insight makes it very tempting to throw caution to the wind and jump into full-time ownership without making the necessary preparations.
But don’t take a huge leap without ensuring your fall is cushioned. Take your time, get everything in order, protect your assets and meet with an accountant to solidify a plan. Next, take a deep breath and put in your two weeks’ notice — you’re now a full-time business owner.
Mark Zuckerberg, Steve Jobs and Sir Richard Branson — the methods they use to run their businesses are so unusual, so against what we typically expect from a CEO, that exposés on their leadership style make for pretty good stories.
But recently, I’ve found it odd that the behaviors of CEOs warrant entire articles. After all, I talk with business owners and managers every day who exhibit what would be considered unconventional traits. More than ever, CEOs are beginning to break the stuffed-suit stereotype for a chance to create a business culture that one day might also be emulated.
Of all the business fads and leadership traits I’ve seen go in and out of style, I am particularly fond of the following three:
Leaders who know when to be led.
It might sound counterintuitive, but people who run businesses have a reputation for being a little thickheaded and stubborn. I’m sure you’ve had a boss in your career that no matter how many times they asked people for advice, they never actually took it. People like having their opinions confirmed. So if the sought-out advice conflicts with that opinion, it tends to get ignored.
And that’s a shame because a real leader should know that there is a time to lead and a time to be led. The managers and employees of a particular department were hired because they brought a certain level of expertise about the department to the business.
When a CEO asks for feedback, they need to actually take what is said into consideration.
Managers and CEOs who give their employees a bit
of breathing room.
Our social media manager likes to let her employees have a bit of downtime while on the clock. For her, it’s important that they have some time to rejuvenate their minds as blogging requires constantly producing new and interesting content.
That downtime can be spent scrolling through Reddit, checking out their Tumblr dashboard, cleaning out their Gmail accounts, whatever they want to do, as long as the time is spent on something that isn’t work.
Typically, having that bit of time helps them break out of routine and ruts that can result in bad writing. The same can be said for those in less creative positions.
For example, someone in sales could get a little too used to saying the same thing over and over again. Suddenly their pitch starts to sound scripted, even if they never had a script to go off of in the first place. Potential clients can pick up on how stiff their speech is, but a quick break away from work to recharge their batteries can help loosen them up.
Leaders who help employees have a life.
There are always things you can do to make your business more profitable — really leaning on your employees to increase their sales, for example, might bring in a little bit more money. But it ends up sacrificing their peace of mind if you push too heavily. Employees will begin to dread coming into work. And when they are at work, they will be a frayed ball of nerves.
In order to achieve long-term success, business owners need to remember that they have to hold onto reliable employees. If businesses have a high turnover rate and are constantly training and retraining people, they’ll never have a chance to grow. Once again, things will stagnate, and that can spell the death of a company when sales inevitably slump.
There are still entrepreneurs who hold onto the old ways, believing that an iron fist and a crazed obsession with perceived profitability will lead them to success. This may be true in the short term. But the resulting turnover and general attitude of their employees will eventually be their downfall.
Deborah Sweeney is the CEO of MyCorporation, an online filing services company that specializes in incorporations and LLCs. Find her online at mycorporation.com and on Twitter @deborahsweeney and @mycorporation.