At some point, part-time entrepreneurs with big ambitions have to decide when they can quit their day jobs and give up the regular paycheque.
For Jean-Philippe LeBlanc, who just quit his job at a Montreal tech company to launch his business software company, it took nearly two years and a nest egg of banked paycheques that will last six months to a year.
“Getting a paycheque every two weeks was the reason why I didn’t take the plunge before,” said LeBlanc, co-founder of Dotted Block, which offers work performance management software.
“I think this is when, after talking to the family, you can take the plunge,” said LeBlanc, 37, who has two children and a wife who runs her own web marketing and design business.
Sandra Wear, who has founded two tech companies and advised more than 100 entrepreneurs, said the process is a tough slog.
It’s usually one in 10 entrepreneurs who succeed, she said from Vancouver.
Fear of making the business a full-time venture can hold people back because it’s “easier to just go day-by-day,” Wear said.
But entrepreneurs need to have a solid financial plan for both their living expenses and for building their businesses.
“It’s just discipline,” Wear said. “Don’t be thinking rainbows. That doesn’t mean anything until money is in the bank.”
A study by Intuit Canada, a business and accounting software company, showed that 53 per cent of all new startup businesses in Canada are run by part-time entrepreneurs.
Charles Benoit makes organic whisky, but the 32-year-old figures it will take a year before he can quit his job as a lawyer.
“In a small business, you are the last to get paid,” Benoit said from Toronto, where he co-founded the Toronto Distillery Co. “If you don’t meticulously plan out where money is going to go, you will hit the wall in no time flat,” said Benoit.
Benoit and his business partner, also a practising lawyer, are planning to hire their first employee as they continue to work full-time.
Getting a distillery up and running is a “six-figure project,” said Benloit, and they want to put as much money back into their business as possible.
Entrepreneur organization Startup Canada estimates there are almost 1.2 million small businesses, with one to four employees, with at least one employee on payroll as of December 2012.
According to the Intuit study, the majority of startups are started with nothing but personal savings.
But 35 per cent of those surveyed said they would quit their day jobs to become entrepreneurs if they could pull in $30,000 or less.
The Intuit survey was conducted online by Angus Reid for Intuit Canada from Jan. 17-22 with 604 small business owners.
The polling industry’s professional body, the Marketing Research and Intelligence Association, says online surveys cannot be assigned a margin of error because they do not randomly sample the population.
—By LuAnn LaSalle