Before You Moonlight As An Entrepreneur….

from the Wall Street Journal- Here

…Here are some fundamental questions to ask yourself


The terrible economy is pushing lots of full-time workers to moonlight—as entrepreneurs.

With money tight and layoffs a looming threat, more people are setting up side businesses to bring in extra money, often with plans to turn them into full-time jobs down the road.

“Over this period of time, people understand positions and jobs are not forever,” says Barbara Frankel, a business and career coach and president-elect of the Career Counselors Consortium in New York. People “are more oriented toward having financial freedom.”

But starting a small business can be particularly challenging for people who also work full time. If you’re thinking about making the leap, there are a bunch of crucial issues to consider—everything from your motives for starting the business to how you’ll budget your time and how you’ll square things with your current boss.

Here’s a look at some of those big questions.

First of all, consider a very fundamental issue: Do you love what you’re about to do?

Since you’re probably not going to see a profit for a while—and you’ll likely be putting in long hours to get the operation going—you’ll need to have an emotional investment in the business to keep you motivated. It should be “something that really makes you feel good and really fulfills a satisfaction and personal need you have,” says Beverly Daniel, owner of CareerGrowth Group, a New York-based career-coaching business.

What’s more, before you commit yourself to anything, do some research and make sure there’s actually a market for your idea.

“Just because I like to glue toothpicks together doesn’t mean anyone’s willing to buy them,” says Timothy Wyman, a partner at the Center for Financial Planning, based in Southfield, Mich.

There are a number of ways to gauge the prospects. You might start by checking online to see if there are a healthy number of buyers and sellers. You could even get in touch with other entrepreneurs in the field to get their take.

Something else for you to consider: the costs of starting and running the business. If you’re doing this to make extra money, you don’t want to get yourself deeper in debt. Can you start your venture with little or no up-front capital? Are there ways to keep your overhead to a minimum?

“Don’t go out and buy space. Lease it,” says Holly Schick, deputy associate administrator in the Office of Entrepreneurial Development at the Small Business Administration. “Don’t borrow money if you don’t have to. Keep fixed costs low to keep yourself nimble to adjust to changes in customer base or whatever comes along. If you do need to exit the business, it’s a lot easier, and you don’t lose as much.”

Think about time

You might have the drive and the resources to launch. But don’t forget to weigh another important factor: Do you have time to run a small business? If you already have significant commitments to family or organizations, some part of your life will end up suffering. That’s particularly true if you’re starting the business during a big life change, such as a divorce or moving to another city. “That can be overwhelming and difficult, and you might not do either one well,” says Ms. Daniel of CareerGrowth Group.

So, work out a schedule for the hours you’ll spend on the business, and see if you’ll be able to manage it. And don’t think you can fill all your waking hours with work. The schedule must include free time for relaxation, so you don’t feel frazzled and stressed.

“The key to balance is you can’t work 24 hours a day, seven days a week,” says Diane M. Pfadenhauer, a consultant at Employment Practices Advisors Inc., a consultancy in Northport, N.Y.

What’s more, you should try to head off conflicts by sharing the schedule with your family and any groups you belong to. Make sure they’re on board, and if they have any objections, they can weigh in before you launch the business.

Ask for help

Next, do what anyone starting a small business does: Write a business plan, do research on the market and figure out what licenses and other paperwork you’ll need.

Just because it’s a side business doesn’t mean you can skimp on this stuff. But don’t try to figure it all out alone. There are scores of small-business organizations and colleges that can help you for little to nothing. For example, the SBA offers free online tutorials for developing home-based businesses.

Finally, don’t forget that your full-time career has to come first. “If it’s a side business, you need to make sure your full-time job is your priority, not to have one foot out the door,” says Ms. Frankel of the Career Counselors Consortium.

Before you start setting up your side job, read your employee handbook. Some specifically detail what you can and can’t do in your free time and cover personal use of work resources such as company cars or BlackBerrys.

Even if your company has a fairly lenient policy, set boundaries between your two jobs. Don’t use your work email for your business, for instance, and don’t take client calls while at the office.

On the other hand, give your sideline as much attention as you can while making it clear your main focus is your full-time job.

Take a lunch break, for instance, or try to leave the office on time as much as you’re able. You might also see if you can change to a more flexible schedule while still putting in the same hours, such as coming in and leaving earlier.

Another important preliminary consideration to bear in mind: Make sure your side business isn’t too similar to your full-time gig, and there’s no legal conflict with what you’re already doing.

“If you have a job and you have some public presence in one domain, you can’t think you’re going to do the same thing and it’s not a problem,” says Judith Gerberg, president of the Career Counselors Consortium.

Then there’s the question of whether or not you should tell your boss about what you’re doing. While some advisers recommend that you tell your employer early on and others counsel to never say anything, most agree it comes down to what sort of relationship you have with your boss.

“It’s an individual decision, and only you know your boss and the environment—if it’s entrepreneurial and would support something like that, or if it is an environment where they want employees to work 10-hour days and would view it as a distraction,” says Ms. Schick of the SBA.

Ms. Tibken is a reporter for Dow Jones Newswires in New York. She can be reached