Especially if you’re in your dream career, and you’re passionate about what you do, there’s peace of mind in knowing that there’s a paycheck for you at the end of every month. But there are also numerous things that would make you want to start a side business or become your own boss eventually.
After all, a recent survey by Guidant Financial found that 28 percent of Americans made the leap because they felt ready to be their own boss! Perhaps your salary no longer caters to all your lifestyle needs, or you simply need a new challenge. Maybe you’ve drawn inspiration from your industry, and now it’s time for you to start your own company.
Whichever the case, starting a business as an employee can present certain unique challenges – from lack of time to financial woes, legal implications, and much more in between.
Thankfully, here are some tips on how you can navigate some of those challenges and protect yourself.
Secure Your Job: Avoid Conflict of Interest
Conflict of interest is one of the biggest challenges that people who are employed face when trying to start their own business. It could easily lead to disputes with your employer as soon as they find out what you’ve been up to lately.
However, there are several precautions you can take to avoid such a scenario and successfully get your business up and running. For instance, the nobility of first discussing it with your employer or manager can be a good show of goodwill.
You may also want to limit or avoid time spent on your side project during work hours and maintain independence between work and personal matters. Once you start getting clients, it’s essential to keep in contact with them discreetly by using private methods such as email rather than conducting in-person meetings during your work hours.
Trying to recruit coworkers, poaching customers, or asking for favors from other employees could also amount to a violation of company codes or policies. To protect yourself, matters regarding your current work and your new startup should have a definite barrier – period!
Seek Advice from an Employment Lawyer First
In starting a business while employed, it’s important to understand potential legal implications related to your job. While every company has its own policies, employment laws can sometimes be complex to navigate alone, not to mention that they may also vary from one country or state to the other.
With this in mind, consulting a seasoned employment attorney in your stationed work area can help ensure you are in compliance with all laws and regulations before launching your startup. What’s more, good lawyers aren’t as hard to find as in the past. If you are stationed in California’s most famous city, for instance, a simple online search on legal help for employees in Los Angeles might be all you need to find pretty good lawyers from respected law firms like Eldessouky.
The advice of an employment lawyer will be necessary if any disputes arise between yourself and your employer in the near or far future. It also helps if there is concern over ownership rights of intellectual property related directly or indirectly connected with the workplace.
It’s always a great way to get clarity on protecting yourself from any repercussions or liabilities from inadvertently disregarding labor laws or conflicting interests with current employers.
Figure out the Financials: Tax, Insurance, and Other Costs Involved
Creating a successful business requires more than just an idea. It’s important to understand the various expenses associated with starting up and running a successful venture. With this said, you’ll want to think about the costs for things like:
- Certifications or licenses needed for your particular area of business
- Business Insurance
- Property costs (rental fees for a storefront)
- Customer acquisition strategies (digital marketing?)
- Technology investments down the road
- And so forth
When dealing with taxes, both personal and business-related, there are different factors that come into play. These may affect both earnings/profit margins now, plus future potential liabilities beyond what is initially seen on paper.
Establish a Formal Business Entity
To protect your assets when starting a business, it’s important to establish a formal type of business structure such as an LLC or Corporation. This helps to separate your personal and professional identities, which not only protects you personally from legal actions aimed at your business but also your personal finances from business liabilities.
An LLC, for instance, protects your personal assets from being seized in case your company runs into legal trouble and suffers hefty liabilities. When running an LLC, you can also choose to be taxed as an individual – or more like an employee of your own company. This flexibility can further help avoid issues with your employer, especially if you still work there while running your new business.
Register and Protect Your Brand or Product IP Rights
Whether or not you still work for your employer, it is essential to protect your brand from infringement when setting up shop. After all, this could turn out to be your bread and butter for years to come, so protecting your brand would mean protecting your future self.
Well, some of the most common ways to protect a brand or intellectual property rights include registering trademarks of your product’s name, logo design, and other indications associated with the product itself.
Nonetheless, this step can potentially raise a red flag in terms of conflict of interest, so it’s best to inform your employer beforehand. By doing so, you can safeguard your job and reputation; while also minimizing the risk that someone else will copy or use something you developed through tons of research, enormous creativity, time, and hard-fought development efforts.
Additionally, – both tangible & intangible –, obtaining copyrights for your own unique inventions can help protect you further. It can help prevent others from profiting from your intellectual property in the near or far future, regardless of whether you developed the idea during working hours or in your own personal time as an employee.
Know When to Hire Other Professional Assistance
Besides an employment attorney, starting a new business may require the wisdom of several other professionals at some point. So, don’t be afraid of seeking professional advice as it can help avoid many potential pitfalls.
For instance, you might need the guidance of an accountant, a business consultant, or a business lawyer when choosing the ideal structure for your business, creating contracts, formulating policies, developing a business plan, and so forth.
This is not to forget how invaluable other professionals like insurers, bankers, and mentors can be to your venture. Knowing when to consult these professionals for advice can help a great deal in protecting your interests as an employee-cum-entrepreneur!
Starting a business is no easy feat. It requires a great deal of caution, especially if you’re under someone else’s payroll. But it is pretty much done even so. As long as you know how to protect yourself and your venture, starting a business as an employee can be a breeze. Start by making sure you implement the few tips above.