5 Solid Tips On Starting a New Business While Still Employed

by . June 21st, 2016

Hold That Thought (It May Be Worth Something)!

A lot of really successful entrepreneurs didn’t walk the straight and narrow. Sometimes you might feel that things aren’t so clear-cut and sometimes you feel you need to get your hands a little dirty. Here are two guys who did just that:

Bill Gates and Paul Allen tried to hack into their company's database to get free computing time.
Source: The Technology Cafe

That’s Paul Allen and Bill Gates. They probably need no further introduction. As precocious and relatively well-connected kids, they hacked into their school’s rented mainframe to get free computer time. They got booted out, but continued to hack into private computing systems well into their Harvard years.

Had they not done what they did,  they would never have developed the skills they needed to change the world they way they had. Microsoft simply would not exist.

Warning: you probably don’t legally own all your ideas

Not the ones you worked on on company time, anyway. Here’s the thing — ideas for small businesses can come from anywhere. Unsurprisingly though, a lot of business ideas come to would-be entrepreneurs while they’re currently employed at another company or are still in school. Also not surprisingly, a lot of entrepreneurs start working on their ideas while otherwise occupied with something else.

Hey, you got to have a safety net, right?

Sure you do.  But one huge problem that has been continually overlooked by many future business owners currently working in or with other companies involves the use of that company’s resources in order to develop their own products or processes.

Companies (and schools) typically frown on the use of resources for personal gain, though this might sometimes be overlooked.

In Bill Gates’s and Paul Allen’s case, they were both booted out and blacklisted a few times, so things are kind of a wash. Few companies would ever stand for the use of their resources for an employee’s pet business- especially if the employee’s developing a business that would compete with it in some way.


That tie is totally unnecessary.

Simply put, an entrepreneur developing their small business ideas on their employer’s or partner’s time is playing with fire. Employment contracts often stipulate that anything developed by an employee with company resources (including time) becomes that company’s property.

There have been incidents where employees unofficially developed tools and processes to help them with their current jobs and then resigned, hoping to monetize on their innovations- only to have their old company sue them for breach of contract. Some companies have even gone to the lengths of having private investigators sort their garbage to find evidence of malfeasance.

Some companies even include stipulations stating that they own innovations you made on your own time- though this cannot reasonably apply if your job is totally different for the kind of innovation you created, i.e., a computer programmer working for Oracle cannot have his novel burrito recipe taken away from him by his employer.

If he developed a program though, he’s probably done for. Same principle applies to seeking other employment- but this blog isn’t about that.

A LID! Of course! We'll make BILLIONS!

Speaking of which, another concern is non-compete clauses- parts of contracts prohibit you from going head-to-head against your employer during or after employment. In the American setting, this is far less of an issue, unless you compete with your old company within the same geographical area.

Let’s say you have a job making gyros and decide to open a gyro store in the same city- probably not going to fly. Another state? Should be ok. Non-compete clauses in contracts have been thrown out by courts on the grounds that they go against the spirit of capitalism – then again, they have also been upheld in other cases.

This gyro is worth fighting for.

So, you’re finally going for it! A few things to consider:

5.) Copyright and registration expenses

While copyrights are relatively affordable at under $50 patent costs are ridiculously high, running upwards of $10,000 just to get everything done, not to mention taking months to process. If you’re a blabbermouth, well… knowing to keep your mouth shut should pay off.

What ever that line for #12 means, it makes this looks like a swimsuit for Linda Blair

4.) Legal issues

Get a patent lawyer! And take everything in this article with a grain of salt. With legal issues, relatively few things are ever certain. Intellectual Property law at the moment is being challenged by a host of new technological innovations that weren’t around a generation ago.

3.) Is it worth competing with your previous employer?

Think really, really, really hard if you want to compete against your former employer. Unless you think you’ll have the resources to take them on legally, and if they’re able to grind you down through their sheer size, you probably shouldn’t do it. But if you have to, never leave a single trace of evidence that might be taken to mean that you hatched a plan to compete against your company while employed.

Kinkier ideas have been stolen. Like I keep telling everyone, people pay good money for this sort of thing.

2.) Create an LLC

One suggested solution for entrepreneurs is to set-up a shell corporation or LLC and have all your concepts (which you developed quietly on your own time) patented or registered under that company’s name. Again, proceed with caution.

1.) Develop your brand BEFORE you launch

In any case, develop a brand identity to go with your concept- this not only obviously helps differentiate your business, but also helps people know you actually exist. Which in turn makes it a whole lot easier for your ideas to take off once you’ve started.

Business cards, anyone?


Arthur Piccio manages YouTheEntrepreneur and has managed content for major players in the online printing industry. He was previously BizSugar's contributor of the week. His work has appeared multiple times on The New York Times' You're the Boss Small Business Blog. He enjoys guitar maintenance and reading up on history and psychology in his spare time.