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Entrepreneur: Before you give up the day job
Starting up ahead of quitting your staff position helps prepare you for the final jump, as well as providing you with a financial cushion. Three entrepreneurs talk to Alicia Clegg
Could moonlighting be the way to set up a business during a recession? A downturn multiplies the risks of starting up and narrows the chances of finding rewarding employment if all goes belly-up. So would-be entrepreneurs in good jobs may decide to put their ambitions on the back burner just now. An alternative, however, is to use the regular wage cheque to pay the mortgage while exploiting the opportunities that office life affords to nurture a young business. That is just what founders of UK businesses Holly Tucker, of Your Local Fair and Notonthehighstreet.com, Duncan Grossart, chief executive and co-owner of Image Source, and Keith Punler, of Manor Kingdom, did when setting up ventures on tight budgets.
“Doing a deal over a beer is helpful when your business is small. Start-ups are always stressful,” Tucker says. “If you sacrifice your salary, you only double the stress.” In 2003, while selling advertising on The London Magazine, Tucker spotted an opportunity to host weekend events in affluent London boroughs, at which producers of stylish and unusual gifts would gather to market their goods. She launched her first fair in London’s Chiswick Town Hall and for more than a year ran her business and her day job in tandem.
Staying plugged in to office life helped Tucker get her business off the ground. She could hire colleagues sitting next to her to design her website and marketing after hours, which allowed her to present Your Local Fair with style on a modest budget. “Doing a deal [with employees] over a beer is helpful when your business is small,” says Ms Tucker. As an advertising sales manager, she knew when The London Magazine was struggling to fill space. This gave her access to last-minute slots at knock-down rates and, in effect, the ability to piggyback on her employer’s readership. Similarly, after negotiating deals on the magazine’s behalf, she would slip in a mention for Your Local Fair. “I was just taking opportunities,” she says. “It allowed me to start up with a database of companies.”
Some bosses might frown on staff who pursue their own ends in company time. Tucker took the view that her ability to juggle her career and her job marked her out as a star performer, whom the company should fight to keep. “I would never take a lunch break,” she says. “I would set myself a target of hitting £10,000. When I had hit that I would say: ‘Now I can spend half an hour on Your Local Fair’.” At the end of the year, the sales team she managed won the company’s top award. In October 2004, Tucker left to have a baby and focus on her business. The next year she realised that her business model needed to shift to the internet.
To help finance Your Local Fair’s reinvention online as Notonthehighstreet.com, she returned to her old employer as a freelance and for four hectic months split her time between her business, her baby and selling advertising. Tucker and her business partner Sophie Cornish launched Notonthehighstreet.com in April 2006, since when the online marketplace has attracted two rounds of venture capital investment. Growth until October 2008 was fast, but the fall in consumer confidence has led her to downgrade its expected turnover to £2.5m ($3.7m).
Punler, a quantity surveyor, launched housebuilder Manor Kingdom during the property recession of 1991. By the time he sold out in 2004 it was turning over more than £40m. Initially he planned to resign from his job before setting up his own business, but his employers offered him the chance to work part-time. When he left them 18 months later, Manor Kingdom was generating more than £1m in revenue. Punler says having a salary gave him courage in a risky market: “If I had had to worry about paying my mortgage, rather than building the next house on spec, I might not have grown as quickly.” Should closet entrepreneurs divulge their activities? This is a judgment call.
Tucker and Punler both confided in their bosses, but Grossart did not when he got involved with the embryonic start-up Image Source. The difference may be explained by the fact that he held an important position in a high-growth start-up, Ingenious Media, the media advice and investment outfit set up by Patrick McKenna, former chairman and chief executive of The Really Useful Group, a year earlier. “It was important for me to demonstrate on every level, tangibly and emotionally, that I was with him,” says Grossart.
In 2000 he bought into Image Source, a royalty-free stock photography agency founded by his business partner, Christina Vaughan. For six months he continued at Ingenious Media, working on Image Source at night. His plan was to study his boss and practise the skills needed to run a business, and he supported McKenna in arranging the sale of a prominent media company. “What I learnt still benefits me to this day,” he says, recalling how helping his boss sell Talkback Productions, on behalf of Ingenious Media’s high-profile clients Griff Rhys Jones, Mel Smith and Peter Fincham, gave him exposure to the way high-level executives negotiate deals.
Under Grossart’s commercial direction, Image Source has expanded internationally and in 2007 it had a turnover of £9.5m. All three entrepreneurs agree that running a business and a job in tandem demands stamina, an ability to withstand stress, and personal sacrifices. Tucker says that “friendships were damaged” because she had no time to socialise. Punler recalls the stress of trying to keep numerous balls in the air as Manor Kingdom gained momentum.
What would the three advise aspiring entrepreneurs to do today? Grossart says that keeping the day job makes financial sense and teaches you how to prioritise. Punler says that combining a job and a start-up worked for him, but he advises others to monitor the transition from part-time to full-time entrepreneurship carefully: “I should probably have made the change six months earlier.” However, juggling several commitments is “a good discipline” that prepares you for the pressures of managing a growing business, says Tucker.
Source: www.thepeninsulaqatar.com