Health Care and Education & Workforce Development and Technology and Small Business

Entrepreneurs keep day jobs: Moonlighting helps owners mitigate startup risks

May 29, 2006

Inventions at various stages of development are scattered around Qamar Shafeek's ranch-style home on Indianapolis' east side.

An unnamed doohickey attached to a curtain rod pulls drapes open and shut along with the sliding glass door.

A voice box gadget tells the single father when the garage or side doors open, alerting him to his children's comings and goings.

And a plastic pinwheel with tennis balls attached to the ends is making its way from a napkin-sketch idea to a hand-eye coordination toy for children.

Some are Shafeek's inventions. Others belong to clients for whom he does patent development and project engineering for ideas that may one day hit the market.

But all are being developed as part of the business Shafeek has started-Designs on Q-while working a fulltime job as a mechanical designer for Indianapolis-based Laibe Corp., a welldrilling equipment manufacturer.

"I'm doing this to build my career," Shafeek said. "I'm not really in it for the money. I just like doing it because my brain just never stops thinking up stuff."

Shafeek, 30, is part of a growing group of moonlighting entrepreneurs-individuals who start a business while working a traditional "day" job.

About 6.2 percent of U.S. workers-or 7.8 million people-have more than one job, according to the U.S. Census Bureau, and more than a quarter of them work for themselves in their side gig.

That equates to nearly 2 million moonlighting entrepreneurs nationwide.

Indeed, a recent study by The Ewing Marion Kauffman Foundation, a Missouri-based not-for-profit that fosters entrepreneurial activity, found that a person is most likely to be involved in a startup if he or she has another job.

"You would think most people would start their own business when they're not working," said Larry Cox, director of the Midwest Entrepreneurial Education Center at Ball State University, who worked on the study. "The reality is that people cover themselves. They mitigate their risk."

That's true for Shafeek. While he said his invention incubator is making a profit, he's not quite ready to quit his day job.

"I still have a ways to go before I can only do this," he said.

The timing of when he makes the leap will depend on more than just whether his sideline is making money, he said. First, he has to get the business running smoothly, and that's hard to do while working another job and raising two kids.

And he'll have to be ready to swap his employer-provided health care benefits with coverage he'll have to obtain on his own.

"It's challenging," he said. "You are head of everything-payables, receivables, taxes, payroll. You're your own middleman, your own salesman. It's very taxing and difficult."

Build your own business

So why do it?

For Gale Breed and Linda Bullock, sisters who are getting Kreative Kitchen LLC off the ground while working for Indianapolis-based Eli Lilly and Co., it's the satisfaction of being their own boss.

"In a corporation, you see someone else's business tick," Breed said. "You contribute to that company's profit. It's very gratifying to build your own business."

Their year-old personal chef service is growing slowly, mostly on referrals. Breed, 39, does the cooking for clients who include elderly shut-ins, busy families and women who want to impress their boyfriends, plus larger group functions.

Bullock, 40, handles the business side of things. She put together a business plan, the two pooled personal funds, bought pots and pans and started cooking. The pair declined to say how much they started with.

Like Shafeek, Breed and Bullock said it's hard to build a business while working full time.

After spending weekdays on clinical trial development, the two devote their evenings and weekends to cooking, setting the table, and clearing away their mess-for other people. They charge $60 an hour, plus the cost of the food.

"It's stressful," Breed said. "But I don't think about it. I'm like an energizer bunny. I just think about right now, not the end."

Flexible hours at Lilly help, the two say. Also, it's easier to work harder when it's your own business.

"Even if you're tired, you're just able to put more energy into it because it's yours," Bullock said.

Kreative Kitchens is posting a profit, and like Shafeek, its owners say it'll be a while before they can quit the 9-to-5 grind.

"Entrepreneurs leave their full-time job only when their new business demands it," Cox said. "They leave when it's impossible to do both."

In fact, Charlie Sim, executive director at the Neighborhood Self-Employment Initiative-an Indianapolis not-for-profit that helps develop very small businesses-said he encourages new entrepreneurs to remain on the job as long as possible.

"They don't know if the business will be successful," he said. "Or even if they'll enjoy it."

While NSI only recently began tracking clients' business longevity, Sim has seen the number of moonlighting entrepreneurs gain momentum over the last 15-20 years. NSI provides training, business counseling, mentoring and micro-loans to individuals, most of whom run very small businesses from their homes.

"At one time, the stigma was that a home business wasn't a 'real' business, [that] the person wasn't really serious," he said. "But technology now makes it easier to run a more credible business out of the home."

Stick with what you know

Shafeek, Breed and Bullock all got their start at NSI and have attended classes to supplement their college degrees.

And while their businesses are mostly or completely different than their day jobs, some moonlighting entrepreneurs stay within their field.

Shirley Smith, for example, works from 3-11 p.m. as a concierge for a private downtown dining club. In her off hours, she runs Concierge in the City, which provides personal services like house sitting, errand running and party planning.

Smith, 59, draws from over a decade of experience in hotels and private clubs helping clients like Bette Midler, who once needed her laundry done while she was onstage, and James Taylor, who was in the market for period-piece wall sconces.

"I guess it's luck or just an uncanny knack of getting things done," said Smith, who got started five months ago with a $1,000 investment. "It's a challenge and a task, but it's very rewarding."

She sticks to clients downtown and is tapping apartment complex and condominium owners who will stuff her flyers into new-resident packets.

Building a customer base is one of Smith's biggest challenges. But unlike Shafeek, Breed and Bullock, Smith thinks she'll be ready to go solo by the fall. That's likely because her financial needs and living expenses are less than the others.

"I don't need much to get by," Smith said. "I'm mostly looking to supplement Social Security but I can't wait until I file for benefits to start my business."

And however much various factors play into these individuals' decisions to subject themselves to the rigors of starting a business and working full time, they all express sentiments similar to Smith's:

"I'm doing this because I like it and I'm good at it."
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