No one can deny that starting a new business can be hard work. But many people find a part-time business can be fun as well as generating an extra income. People with a particular skill, trade or hobby often start a part-time business. For instance, people who enjoy cooking may wish to start a catering business. What’s more, a part-time business can be a useful prelude to a full-time enterprise, using the time to test products or services whilst still enjoying an income from employment.
Start as you mean to go on
The fact that a business is part-time does not mean you can avoid the usual issues that come with a business. These include having the necessary insurances, keeping records of income and expenditure and notifying HMRC of an income from self-employment, which will require you to fill in a tax return each year. If you are working from home you may need to notify the local council, as well as your mortgage provider.
What are the challenges of a part-time business?
Many of the challenges of starting a business also apply to a part-time enterprise. So you will still have to market the business to potential customers. However, many part-timers rely on word-of-mouth recommendations.
The internet offers a way of extending the reach of a business to local, national and international customers. A website should be a shop window for all businesses. Amazon and eBay have global customer bases in the hundreds of millions. They can market your product internationally and help with export documentation. But if you are serious about marketing through the internet you will require a considered marketing plan. Language and product standards are issues that must be addressed. Many marketplaces offer specific services to support fulfilment of orders. Selling online has hidden costs including higher stock levels, good product descriptions and fulfilment within specified periods. However, the increased growth in internet business offers part-time businesses a full-time marketing tool.
There are two main challenges specific to part-time businesses. Firstly, you will need to consider how you meet peaks of customer demand. If you are in employment you may be restricted to working at evenings and weekends. Or you may have other demands on your time such as caring for children or relatives, so you might need back-up resources to help meet customer expectations. Having people that you can call on is one method of managing unexpected demand.
The other challenge is running a business if you are already in employment. Do you take your employer into your confidence and inform them of your business activity? This may depend on your contract of employment; often the contract prevents you from working in the same sector. This may not be an issue and an employer may be interested to hear how you may develop new skills in running your own business.
Moving from part-time to full-time
Many part-time businesses are sufficiently successful that their founders decide to go full-time. A key issue here is whether the business will generate sufficient profits to enable you to keep the standard of living for you and any of your dependents.
In addition, going full time may require significant new investment such as bigger or better equipment, new tools or a motor vehicle to transport you or your goods or services to customers. You may also want to invest in a better, more ambitious website. So a key question is: do you have the finance to pay for this investment or do you need to access finance? A business plan will demonstrate to finance providers that your full-time business can make the profits you need to live on, as well as paying back any money you’ve borrowed.
Starting a part-time business can be very rewarding both in terms of the enjoyment of doing something well and generating additional income. It can also be the start of a second career as an entrepreneur and business owner.