The Dos and Don’ts of Starting a Business While Working

You may be one of the 24 million Americans who are eager to make their own boss. You could find yourself in an ethical quandary that can endanger your professional reputation, and even cause you to lose your job. You can make it without violating any ethical norms if you’re aware of all the possible issues and follow these four tips.

  1. Read your employment contract.

Consider the day you were hired for your current job. After negotiating your salary, discussing benefits, and maybe some reflection, or perhaps no consideration at all because you were so excited about the opportunity, you accepted the job. A part of every job’s onboarding process is signing an employment contract. This outlines what you can and cannot do.

It may be your first time thinking about the legal document you signed. However, it is important that you locate it and carefully read it. Although it is legal to open a side business, it may be illegal for your employer to prohibit you from doing so.

Employers may have clauses in their contracts that give them the right to claim ownership of any innovations or inventions you make while working for them. Other clauses may allow you to sue any business that you perceive as a threat.

You may also have an employment contract or a noncompete agreement. These agreements are common and prevent you from disclosing your company’s trade secrets and methods. It could lead to difficult situations if you create a side company using the same methods as your company.

Melissa Cadwallader, ZenBusiness, said that if there are noncompete clauses, assignment clauses of convenience clauses, or nondisclosure agreements you should talk to a reputable attorney about your business plans.

  1. Decide if you will talk to your boss about your plans.

After you have read the agreements you signed when joining your employer’s team, you may find that you are legally required to inform management about any side business activities. You must inform them about what you are doing. Experts will debate what approach to take in such a situation, even if you don’t need to tell them.

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There are people who believe you should not tell anyone about your side-business. Tom Scarda is the founder and CEO of The Franchise Academy. He calls this move “inadvisable.”

Scarda stated that “the stress of running your business would likely compromise your quality and production of regular jobs.” Your employer might be inclined to look for a replacement if they perceive [your new business] negatively.

Others suggest you openly disclose the existence of your business and that it is your intention to work on it beyond your normal business hours. Romantific editor Samantha Moss says that being open about your new venture will make your professional life more enjoyable in the long-term.

She said, “Tell your boss or HR department that you have a side hustle is a great way for trust and transparency and to let them know that it will not affect your work performance.” This will also lessen their shock when you decide to concentrate on your business after it grows into a strong one.

Cadwallader cited the fact that continuing employment can be a “financial security net” for budding entrepreneurs. He said it was important to maintain a professional relationship, regardless of which option you choose.

She said that there should be an opportunity to discuss any concerns with both a HR representative or the business owner. Your openness could be rewarded by a generous offer to support.

Fleet Logging founder Ian Wright said that if you talk to someone at work and they give permission, you should take it. Make sure that you have the paperwork to support your actions.

He said, “If you need to get permission to do any side work, I would 100% get it in writing. It could save you time down the road.” You should just make sure that you are the best employee possible, do your job well, and everything will be fine.

  1. Don’t let your side hustle take over your job.

When it comes to employees setting up their own businesses, one of the greatest concerns for business owners is the possible losses. This is why noncompete clauses are included in employment contracts.

You should not be trying to start a business while you work a full-time job. This means you won’t be able to use your employer’s office supplies, online tools, or software solutions, nor will your employer provide any internet access or computer usage that could directly benefit your company while you are working. This is not only technically theft from your employer but also highly unethical.

Ryan Robinson, a former Forbes contributor wrote that using a company-provided laptop for your side hustle could get you in serious trouble.

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