Starting Up but not as me

Discussion in 'Accounts & Finance' started by Neil68, Oct 10, 2020.

  1. Neil68

    Neil68 UKBF Newcomer Free Member

    4 2
    Hi,

    I have a hypothetical I'd like to run past everyone here. I am currently employed full time and have an idea for a business I think would be viable. I want to maintain my current job while developing the business but I don't want to have to declare this to my employer. My contract states I should but I see it as unlikely my employer would believe due to my WFH status that I would seperate my side business from work time. I'm sure they would imagine I'd be working on my business in their work time and forbid me from doing it. I intend to build my business out of work hours, using my own equipment so there can be no claim to IP.

    I have a potential way of selling my service through a self-employed friend who has a good alignment with what I intend to do. Ideally I would like him to sell my product and then have a means to give me my cut. Now, I'll say that I want to do everything honestly but I have no idea how my friend could then give me an agreed cut - does anyone have experience of this they can help with?
     
    Posted: Oct 10, 2020 By: Neil68 Member since: Oct 10, 2020
    #1
  2. paulears

    paulears UKBF Big Shot Full Member

    4,525 1,193
    Nowadays with social media, I wonder how long you could operate not as you? You'd be constantly looking over your shoulder. Being self-employed means you need exposure and lots of banging your own drum. You can pay people to do it for you, but how would that be explained to clients?
     
    Posted: Oct 10, 2020 By: paulears Member since: Jan 7, 2015
    #2
  3. STK Finance Limited

    STK Finance Limited UKBF Newcomer Free Member

    21 3
    Hi Neil

    You could consider setting up a partnership agreement. It will not be public (unlike, say, holding a joint venture interest in an incorporated business). You can ask a lawyer to draft the agreement for you and your share of partnership profits will be accounted for in your personal tax return (so private).
     
    Posted: Oct 10, 2020 By: STK Finance Limited Member since: Sep 25, 2020
    #3
  4. Mr D

    Mr D UKBF Legend Free Member

    24,866 3,030
    Have a contract with your friend.

    Trouble is if he doesn't pay you....

    Keeping things quiet is hard - people talk. If it gets to your employer that you were running a business and they didn't know it looks bad.
    I knew a guy once who was running a business for 9 months before his employer found out - not from him but from one of his friends boasting about having a bigger business than this guy in front of other staff.
    Dismissed that day and company grabbed two patents.
     
    Posted: Oct 10, 2020 By: Mr D Member since: Feb 12, 2017
    #4
  5. Paul Norman

    Paul Norman UKBF Ace Free Member

    2,818 885
    This raises a lot of real concerns.

    First, if your boss does find out - and they might - make sure you understand what you are risking before you do it. You could be fired. If you have are seen to be in any way competing, you might get worse than fired, although this is not massively likely.

    Secondly, you can get your 'friend' to do the selling. Get a really good lawyer to draw up a really good agreement on how that works. This forum is full of posts that start 'I started business with a friend and now we are not friends and it's got really nasty and I am losing my money'.

    Thirdly, understand about how you are going to get enough visibility of your business whilst remaining utterly invisible to your boss.
     
    Posted: Oct 11, 2020 By: Paul Norman Member since: Apr 8, 2010
    #5
  6. Spur Support Services

    Spur Support Services UKBF Contributor Free Member

    68 13
    I think talking to your employer, has to be your first port of call.
    If you are contractually obliged to tell them, then why not explore the possibility first.
    If your business idea is in direct competition with theirs, then quite rightly they would be perturbed if you ran the two concurrently.
    If your business idea is in a completely different field or expertise, then try approaching them.
    If you explain it is just a hobby, then it may well be fine and you won't have that extra burden weighing you down.

    If you are honest about your hobby business, then they are more likely to believe that you will be honest whilst working from home.
    If you feel that there may be tensions, then ask for clearer performance measures, to show that you are meeting their expectations in performing your duties for your current role.

    In respect of teaming up with someone, this is up to you, but as others have said you should consider the legal framework, so that you both have clear and documented expectations, whether the relationship is wholesaler/retailer, marketing agent or otherwise.
     
    Posted: Oct 11, 2020 By: Spur Support Services Member since: Aug 21, 2020
    #6
  7. The Byre

    The Byre UKBF Legend Full Member

    10,351 4,330
    If your employer is like me, he/she/it would welcome your initiative and would want to back your idea with an investment and shareholding.

    My problem with employees in the past has been that if they came to me wi some great idea and I said "OK, let's do it! Sign here and we've got a joint venture!" they got cold feet and would point to the trees and ask if I'd seen a squirrel.
     
    Posted: Oct 11, 2020 By: The Byre Member since: Aug 13, 2013
    #7
  8. Neil68

    Neil68 UKBF Newcomer Free Member

    4 2
    Hi,

    Thanks to everyone for the posts, I really appreciate the input from everyone as this is my first time considering going it alone.

    I wouldn't be competing with my employer but I do think they would not want me pursuing this idea as they'd think I'd be working on it in the time I'm paid for by them - like a lot of people, I'm now WFH due to Corona and previously the culture has always been one of presenteeism. I'm also a parent so I have to use time in the day for childcare in the current circumstances and then make time up in the evenings. I consider myself pretty diligent and I get everything done but I also know the culture is generally one of not trusting the staff where I work. Which is the long way of saying I really don't want to tell them.

    That said, I understand the risks involved (I also know someone who was fired for doing this - but they now are doing alright with their business). The friend is actually family, but I can imagine that is no guarantee things might not go sour as well. The partnership idea sounds interesting, thanks STK Finance.

    One option I do have is to go PT - I only have to declare other interests if I'm FT. It adds a little more risk than I'd want to the project but I could always try it for a year and then ask to go FT again if it doesn't work I suppose. This was going to be my plan as soon as the business seemed viable anyway.

    Okay, thanks everyone - again, really appreciated. I'm thinking more and more I need to go this fully legit and not have to worry about being discovered or any potential issues with a partnership.
     
    Posted: Oct 11, 2020 By: Neil68 Member since: Oct 10, 2020
    #8
  9. Neil68

    Neil68 UKBF Newcomer Free Member

    4 2
    [QUOTE="If you are honest about your hobby business, then they are more likely to believe that you will be honest whilst working from home.
    If you feel that there may be tensions, then ask for clearer performance measures, to show that you are meeting their expectations in performing your duties for your current role.
    [/QUOTE]

    That's really interesting, thank you. I think that's the heart of it actually - I'm managed pretty laxly as I get most stuff done (I might only speak to my manager once a fortnight). My manager is pretty open that they don't like managing and they're pretty bad at setting targets or holding people to account for not meeting them. So we sort of avoid each other.

    Declaring a side business would effectively force them to start managing me properly in case my performance did dip, and they won't want to do this - so it would be easier to say I wasn't allowed to work on a side business.

    That's me being cynical but I know my workplace
     
    Posted: Oct 11, 2020 By: Neil68 Member since: Oct 10, 2020
    #9
  10. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    13,257 2,486
    I'm all for being entirely open and honest with your employers at the onset. However if you really feel that's not possible and want to pursue this anyway you may find it a bit easier to hide behind a limited company. I'm not suggesting it's the best structure for your new business but it will enable you to remain a little more hidden than operating as a sole trader.
     
    Posted: Oct 12, 2020 By: MyAccountantOnline Member since: Sep 24, 2008
    #10
  11. GLAbusiness

    GLAbusiness UKBF Regular Free Member

    211 40
    I'm with The Byre on this one. But, if you do decide to "hide" the activity then make sure you retain the Intellectual Property associated with your product
     
    Posted: Oct 12, 2020 By: GLAbusiness Member since: Sep 20, 2008
    #11
  12. Financial-Modeller

    Financial-Modeller UKBF Enthusiast Full Member

    817 299
    Available channels that meet your privacy requirement depend partially on what you will be selling.

    Perhaps irrelevant semantics, but important to distinguish whether your customers will be buying a product or a service, which perhaps implies that they are buying your time?

    As an example, if its a product, could you license its production in return for a royalty fee, and therefore not need a visible company?
     
    Posted: Oct 13, 2020 By: Financial-Modeller Member since: Jul 3, 2012
    #12
  13. Neil68

    Neil68 UKBF Newcomer Free Member

    4 2
    Thanks for the reply - I would be selling e-learning with associated resources, so it's a product technically.
     
    Posted: Oct 14, 2020 By: Neil68 Member since: Oct 10, 2020
    #13