Entrepreneurship can be extremely rewarding. You have more control of your time, the chance to determine your earning potential, and the opportunity to tap into your creativity and passion in order to make a living. While there’s a certain level of cache and admiration that comes with proclaiming that you work for yourself and you have no boss, it’s important to clarify that entrepreneurship comes in two flavors: part-time and full-time.
Part-time and full-time entrepreneurship both have their benefits, and based on where you are in your life and the growth of your business, one type of entrepreneurship may serve your personal and financial needs more than the other. If you’re thinking about whether to pursue your business idea on a part-time or full-time basis, reflect on where you are with the following.
The state of your personal finances. If you are saddled and burdened with credit card debt, have little in the way of emergency savings, and have no retirement savings stashed away for your future, part-time entrepreneurship may be the best thing for you right now.
When you have a full-time income, you can simultaneously pay down debt, save for the future, and invest in the growth of your business.
It’s of utmost importance to enter full-time entrepreneurship with as strong a financial foundation as possible. You will need good credit and (at least) one year’s worth of living expenses to give yourself the peace of mind and capital to invest in your business.
How much research and market testing you’ve done on your product and/or service. With entrepreneurial idols like the late Steve Jobs and Oprah Winfrey championing all of us to pursue our passions (and not worry about the money), it can be really seductive to throw caution to wind, create a product and/or service and believe that “if you build it, they will come.”
Yes, it’s true: more times than not, successful entrepreneurs use their passion to inspire their product and/or service. But that’s not the last stop on the passion-to-profit journey. Successful entrepreneurs take great lengths to survey, test and question members of their target market as to ensure the feasibility of their good or service.
In order for you to survive and thrive as an entrepreneur, you need to know if the market wants what you are offering. If you have done this legwork, your part-time business will thrive and easily scale into a full-time business, if that’s what you want.
If you are still high off the fumes of passion and “following your bliss,” you don’t have much more than enthusiasm to fuel your business.
How you feel about your current life. One of the reasons that part-time entrepreneurs decide to stay as such is because they love their life and have met many of their personal and financial goals. Some part-time entrepreneurs love their full-time jobs and use their part-time entrepreneurial endeavors as symbols of self-actualization, opportunities to both help others and financially reward themselves, and minimize the risk that comes with full-time entrepreneurship.
If you’re satisfied with the state of your life and view the money that comes from your part-time business as a “bonus,” then full-time entrepreneurship may not be a high priority. If, however, where you are in life is not where you want to be and you have taken Tip #1 and Tip #2 into consideration, then full-time boss status is in your stars.
How much monthly revenue your business brings in. If you’ve been working your business part-time and realize that it’s now bringing in more income than your current job, you have to turn away business, and the progress of your part-time business is suffering because of your full-time job, then you may need to transition to full-time entrepreneurship.
Similarly, some entrepreneurs have a “freedom number” in mind. The “freedom number” is the minimum amount of money they need to feel comfortable pursuing their passion full-time. For some, this number includes living expenses and the ability to save 10% each month. For others, it’s much leaner: they can pay their basic bills and nothing more.
In either case, the business is doing what a business is supposed to do: generate enough profit to justify its existence.
Entrepreneurship is a big deal no matter how you cut it: there’s a lot of risk, reward, pride, and identity wrapped up into being a business owner. The great thing about entrepreneurship though is that is doesn’t have to be a win or loss proposition, an either/or dilemma. You can be an entrepreneur at your own comfort level and at your own pace. It’s completely up to you to decide.
Connect with Kara Stevens on Twitter @frugalfeminista. Learn more about the Frugal Feminista at thefrugalfeminista.com. Download her free ebook The 5-Day Financial Reset Plan: Eliminate Debt, Know Your Worth, and Heal Your Relationship with Money in Just 5 Days.