21 August, 2017
Starting a business can be one of the most challenging steps in your professional career. For those who choose to leave behind a solid career trajectory, starting a business can be even more risky. But what if there was a way to mitigate these risks? Starting a business while still in full-time employment is a growing trend in entrepreneurship. However, this phenomenon doesn't come without its disadvantages. We take a brief look at the pros and cons of becoming a "moonlight entrepreneur".
One of the key reasons people choose to remain in full-time employment is for security. In fact, holding up a steady job while building a business on the side might seem like a great deal: you're getting paid and your investing the money in your new business.
However, some entrepreneurs who built their businesses from the ground up would argue that security doesn't breed a good entrepreneur: you lack a burning platform from which to take important risks that grow a business. You also can't understand the full implications of being a business owner.
Starting out as a moonlight entrepreneur is almost like dipping your toe into a swimming pool before diving in. You get to check the temperature first. In their article "Should I Quit My Day Job?: A Hybrid Path to Entrepreneurship", Joseph Raffiee and Jie Feng explain how moonlight entrepreneurs "benefit from the ability to learn about their entrepreneurial skills, capabilities, and fit within the entrepreneurial context. Indeed, a lack of fit between founder and company is a major reason for new business failures."
On the other hand, it's clear that dipping your toe in the water is not the same as diving in. As a moonlight entrepreneur, there are limitations to the amount you can learn about running and growing your new business. You also don't get a complete picture of what it would be like for you to be a "full-time entrepreneur".
Managing a full-time job and a new business is far from a straightforward task. There's a reason why moonlight entrepreneurship is less known or only a temporary solution. Starting a new business often requires the time commitment of at least five people, let alone one person in their spare time. Choosing to follow the moonlight entrepreneurship model may slow down your new business' growth. It may also the mean increased stress and less time for other things that are important to you, e.g. family, friends, individual pursuits.
That said, if you're willing to accept a slower rate of growth for your business, becoming a moonlight entrepreneur may be a good fit, especially as a temporary solution before leaving your full-time job.
So who does moonlight entrepreneurship seem to favour?
- Those who can't afford to live on what their fledging business brings in
- Those who are uncertain or cautious about becoming business owners, and want to test it out first
- Those with flexible working hours, ideally combined with a high salary
- Those who want to dedicate a few months or years to research and development before they start their business
Raffiee, J., & Feng, J. (2014). Should I quit my day job? A hybrid path to entrepreneurship. Academy of Management Journal, Vol. 57, No. 4 936–963.
MBTI Type and Entrepreneurship Rating
Potential strengths and weaknesses based on your personality type.
What Drives the Creation of Entrepreneurs?
National characteristics that forge entrepreneurs.
How Does Your Interviewer Like It?
Know who you'll be interacting with and how it matters.