business

By Karen E. Klein

Despite popular perception, not all great entrepreneurial ideas emerge from college dorm rooms or Silicon Valley garages. Many businesses start with the weekend work of well-networked corporate professionals who are industry-savvy, says Taylor Smith, managing partner of New York-based The Spirus Group, a venture development firm. He spoke recently with Smart Answers columnist Karen E. Klein about how today's employees may become next year's entrepreneurs. Edited excerpts of their conversation follow.

It's a difficult environment all the way around. There are some corporate professionals who went into their lines of work because of the financial upside, and they were willing to be in these all-or-nothing jobs and make a sacrifice on lifestyle. But now, with more job insecurity, they may see a changing cost-benefit analysis and they're deciding to take some of the money they've earned and see if that idea they've had in the back of their minds a long time is viable.

Other people are starting to work on a business plan in their off-time so they don't land flat-footed if there is a layoff. Sometimes a business offers the best potential for financial gain as an industry tightens and compensation levels come down.

Isn't it always difficult to know when to leave the corporate world and make that leap into starting a business?

Absolutely. I think, given what's happening now, this is a time to hold on to your job a little bit longer than you might otherwise, just to make sure you have as much visibility as you can for as long as you can. At some point, of course, you are going to have to take that leap of faith.

What can people do in terms of planning for a business venture while they are still working in a full-time job?

A lot of early venture development work can be done at the same time you stay in your job. For instance, you need to have a good sense of the competitive landscape. A lot of entrepreneurs are so enamored by their business idea that they don't spend enough time canvassing who else is out there.

There's also work to do like deciding on a business model, lining up the financing, creating a marketing strategy, and finding suppliers. All this can be done on nights and weekends, and you can make sure that the time when you've let go of one trapeze handle and catch the other one is as short as possible.