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Chapter Five
Small Business Entry: Paths
to Part-Time Entrepreneurship

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Education.
 Why Part-Time Businesses Are Important

The terms part-time employment and full-time employment are

usually understood to mean working 35 or fewer hours a week and
working more than 35 hours a week, respectively.
The variety of ways people choose to conduct business makes it
necessary to use additional terms to describe employment patterns.
• Businesses such as “pop-up” restaurants or pop-up retailers are often
called episodic businesses as they have no permanent location.
• Hybrid entrepreneurship describes someone who keeps a constant
job as an employee while working at their own business.
• In the text, a part-time business describes all of these employment
patterns while working fewer than 35 hours per week.
• Many people jump into and out of self-employment – a change called
volatility by economists.

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 When to Consider Part-Time Entrepreneurship

• If you are new to business in general and need to gain basic

experience.
• If you lack the resources necessary to pursue a full-scale business or
create a business plan.
• If there is a narrow window of opportunity.
• When you are uncertain about the demands of going into a full-time
business.

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 What Kinds of Part-Time Entrepreneurship Exist?

The most common forms of part-time businesses are:

• Home based.
• Internet informational websites.
• E-commerce and eBay websites.
• Home retail – home party, door-to-door, network marketing, stands.
• Pop-up.
• Mobile offices.
• Virtual offices, executive offices, and incubators.
• Consignments and agents.

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 Home-Based Businesses

The greatest challenge may be zoning or family challenges.

• Regulations limiting the use of your space are called zoning laws
when applied by the government or covenants when applied by
organizations such as a neighborhood group.
• You can minimize problems by using a private mailbox and self-
storage facilities or get a variance.
Other issues for a home-based business.
After the location is
• Choose a work location inside your home.
set, you will need
• Be realistic about the space you’ll need. equipment and
• A door can separate your work and family life. tools.
• Don’t overload on hours of work, or on snacks. As your business
• Set your workday to minimize distractions. grows, you may
• Consider hiring help with household chores. choose to expand
or keep it small.
• Set the ground rules early and stick to them.
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 Essential Questions to Answer for a Home Office

If you intend to deduct the expenses of your home office, can you comply
with the regulatory standards?

If you are going to use a home office, can you meet state,
country, and municipal regulations?

If you choose to have a home office, can you be productive in

that space?

Will you be able to deal with clients, vendors, or employees

in your home office?

Will you be able to separate home and business life?

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 E-Commerce and eBay Websites

For part-time entrepreneurs, the lure of an e-commerce site is undeniable.

• Sales are done through another site, like Amazon or eBay, or your own.
• Two important financial issues are payments and chargebacks.
• You can sell services through Upwork.com in a reverse auction.
• eBay allows you to set a reserve price and provides anonymity.

Although web traffic is high on eBay or Amazon, a

wise entrepreneur uses multichannel marketing. Home-based and
internet business
• Get your store name into newsletters, blogs, or are the two core
on mass media helps promote your site. methods of getting
• Social networking gets the word out. started for part-
• Online directories are an option. time entrepreneurs.

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 The Next Best Things to a Home-Based Business
Home retail is one of three forms.
• You can hold a home party
without a franchised product.
• The success of door-to-door
selling is closing the deal.
• A parent company organizes
network marketing.
• Salespeople are expected
to recruit other salespeople.
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Another kind of home retail is
stands or kiosks.
• The most ancient form of sales.
• Semi-permanent or mobile.
• Stands can be the least
expensive way to set up shop.
• A high-end version exists in the
mall cart or kiosk.
The key success factors are a
busy location and inventory.
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 Pop-Up Businesses

A pop-up store, or flash retailing, has a temporary venue.

• Several cities sponsor pop-up business events.
• Goodwill Industries opens dozens of pop-up stores each year.

The big advantage of pop-ups over stand retail is flexibility.

• Pop-ups do not have a fixed place of business.
• Pop-ups exist for a short time – a few hours, a day, or a few weeks.
• Pop-ups are designed to be easy to set up and take down.
• Pop-ups can easily be set up in new locations.
• Pop-ups must be special, distinct from other permanent businesses.

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 Mobile Offices

As many as one in six Americans work from their cars or trucks.

• Mostly in jobs involving face-to-face selling and client services.
• There is no rent and car expenses can be deducted from tax returns.
• It places the entrepreneur close to the customer.
The key is a cell phone, a laptop, and a printer.
• Make sure your vehicle can accommodate you, your equipment and
files, and handle the drain on the vehicle’s battery over the long-term.
• You should also remember to provide adequate and comfortable
accommodations for passengers.

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 Virtual Offices, Executive Offices, and Incubators

A virtual office is the next step in most web hosting packages.

• In addition to handling your emails and newsletters, it gives you
access to your files, fax services, and phone services.

Executive offices have short-term Rent space in an incubator.

space for an office or work area.
• Furnished or unfurnished.
• They provide basic utilities.
• Offers phone services with a
live receptionist.
• In a co-working space, you pay
a fee for access.
• For-profit incubators are similar
to executive offices, but cheaper.
• Nonprofit incubators are
sponsored and subsidized.
• There is an online directory for
incubators run by the National
Business Incubator Association.

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 Key Considerations for Success in Part-Time
Entrepreneurship

The cost to start up your new part-time business.

• You want a low cost as the returns may not be enough to pay of an
expensive start-up effort.
The time to start up your business.
• Shortest is best – the more time it takes, the longer it takes for profits.
The permanence of the business you are creating.
• Related to legitimacy – customers want to know the company will be
around for future sales and service.

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 Challenges of Part-Time Entrepreneurship:
Moving to Full-Time Entrepreneurship

Some people start a part-time business with intentions to go full-time,

while others want to stay part-time.
The key question is usually financial.
• If often makes sense to wait until there is a solid income likely.
• Make use of any transition services your former employer offers.
• Change over when your family and personal obligations are low and
support from family and friends is high.

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 Planning a Path into Business

Causal or predictive reasoning is a useful technique regardless of

whether you want a full-time or a part-time business.
An entrepreneur uses effectual reasoning when they imagine what can
be accomplished with the resources at hand.
• Affordable loss is the practice of bringing your product/service to
market with the minimum expenditure of capital, effort, and time.
• Strategic partnerships can be either formal or informal with others
who provide support to your efforts at starting your business.
• Leveraging contingencies is another way of saying “recognizing and
using opportunities.”

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 Bootstrapping, Bricolage, and Lean Business Practices

These three ideas fit into both the causal and the effectual approaches.
• Bootstrapping is finding a low-cost, or no-cost way to do something.
• Bricolage is the practice of using whatever you have at hand.
• Lean business practices mean eliminating waste and producing a
minimum viable product.
Both lean operations The key ideas of bootstrapping are simple:
and bootstrapping • Do without as long as you can and cut all
share three ideas: expenses to the bone.
• Waste not, want not. • Borrow, barter, rent or lease rather than buy
• Create, standardize, and consider offering equity if you must buy.
repeat. • Borrow money from yourself first.
• Keep in touch. • Minimize debt and limit credit card balances.
• Always keep track of your cash.

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 The Five Paths to Business Ownership

The entrepreneur
They can purchase They can purchase a
can start a
franchise rights to an fully operating
completely new
existing business. business.
business.

They can work in a

They can inherit a
small business and
business from a
eventually gain
family member.
ownership.

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