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Start your own business or keep your steady job? Well, why not do both?
Taking the time to launch your company and test the waters while hanging on to a regular income doesn’t just sound reassuring. It’s actually something you can do - in most cases.
But, how easy is it to balance a 9-5 job with the demands of creating a company? What are your options as an employee-entrepreneur? What are the steps you need to take to successfully launch your project? Join us as we explore it all.
In theory, you can open a company while being an employee, regardless of your chosen legal structure. Whether it’s a company or sole proprietorship, that’s your call. That being said, there are a few red flags to watch out for before you get going.
There are 4 red flags that might end your dream of becoming an employee-entrepreneur before you even start. So, before you begin working on your company, make sure you’re not going to run into one of these barriers.
Loyalty to your employer is an obligation that applies to all employees. So much so that it doesn’t need to be explicitly mentioned in your contract.
As such, your personal business project must not damage your current employer’s business. You must continue to work in good faith and your employer’s best interests.
Here are some of the actions that could be viewed as disloyal and damaging to your company:
Your work contract may contain an employment exclusivity clause, which forbids you from engaging in a second activity (be it a second job or a side business) while the company employs you. This exclusivity clause may apply even if the field of activity of your new business is entirely unrelated to that of the company that employs you.
Of course, the use of this clause is restricted. For the clause to be considered valid, the company must:
For example, an employee might have such a clause in their contract because their role in the company grants them access to sensitive or confidential information.
Your contract may contain a non-competition clause, which applies after your contract has ended and prevents you from competing against your former company, whether that is by:
To be considered valid, this clause must be:
It’s also essential to have in mind that certain regulated professions forbid the combination of two activities for ethical reasons. That’s the case, for instance, for:
If you’re a civil servant, whether your contract is permanent, part-time, or temporary, combining two activities is usually subject to getting your employer’s green light.
If you don’t comply with your contractual obligations, you could be fired for misconduct, or - in some cases - be taken to court for unfair competition.
No red flags? Great, you can now get to work on becoming an entrepreneur.
Starting your entrepreneurial journey demands both time and energy. So, it might be hard to balance working fixed hours as an employee and carving out time to work on your business project without burning the midnight oil.
Luckily, there are solutions for you to combine both.
Your first solution is to ask your employer for a business creation leave.
This gives you up to 12 months (renewable once) to work on your personal business project. It’s then up to you to decide, once your leave is over, whether you want to return to your salaried job or if you’re ready to commit in full to your entrepreneurial journey.
One thing to note is that you won’t get paid during this period, but you’ll have a paid job to return to, should you wish to.
To be eligible for a business creation leave, you must:
Not keen on sharing your business idea with your employer? Then a sabbatical leave might be a better way for you to get time off to work on your project.
To be eligible for a sabbatical leave, you need:
If granted, your sabbatical leave can range from 6 to 11 months.
If you’re reluctant to go unpaid while you work on your business project but still want to free up some time to work on your concept, shifting to a part-time contract might be a good option for you.
This is something you can absolutely ask of your employer. To be eligible for part-time work, you need to meet the same criteria as for a business creation leave - see above.
Your last option, usually reserved for when you’re ready to become a full-time entrepreneur, is to leave the company you were working for.
In France, you can ask to leave by negotiating a rupture conventionnelle (an agreement to part ways agreed between your employer and yourself). That way, you’ll be granted unemployment benefits once you’ve left the company.
Since 2019, if your boss isn’t open to a rupture conventionelle (it’s not something they are legally obliged to do), you can also quit and apply for an entrepreneurial career transition (reconversion professionnelle) at the French national unemployment agency, Pôle Emploi. If approved, you’ll then also be able to get unemployment benefits while you work on starting up your business.
Before quitting your job, it’s highly recommended you get in touch with Pôle Emploi first to assess whether you are eligible for the reconversion professionnelle measure (link in French) and start the process with them.
In some cases, it’s also possible to keep getting unemployment allocations even once you’ve started earning income as an entrepreneur.
To learn more about these different measures offered by Pôle Emploi (link in French) and the other types of help you can get to create a company in France, check out this comprehensive article on the help you can get as an entrepreneur in 2023.
In France, it’s helpful to know that becoming an employee-entrepreneur is not just a lifestyle choice. It also impacts your social contributions and how you file your taxes.
When you’re an employee creating a company in France (link in French), you usually belong to two different social security systems at the same time:
And yes, double registration means double social contributions.
As an employee-entrepreneur making money from both activities, you must declare all your income in your tax returns.
Now that you’ve been introduced to the specifics of being an employee-entrepreneur, let’s talk about the steps to follow to start a business.
An idea, on its own, no matter how good, isn’t enough to create a company that’s profitable in the long term. So before diving in head first, you should take the time to refine your idea and check how feasible it is. An essential step in doing so is to carry out market research.
Market research will help you:
If you’re looking for guidance on conducting market research, this article will help.
Writing a comprehensive and detailed business plan is crucial. This document will help you, first of all, refine the scope of your project and, secondly, convince possible partners. Besides, you’ll automatically get asked for it once you start looking for company funding.
Do you want to learn more? Check out this comprehensive article on writing a business plan.
Another critical step is to pick a legal status for your upcoming business. This choice is an important one, as each legal status has pros and cons regarding tax regime, social regime, liability, and whether you can bring in partners.
If you’re interested in starting a company but want to keep the advantages of salaried work, umbrella companies might interest you. While not as well-known, this status is growing in popularity as it’s halfway between being an employee and being self-employed.
Looking to become a solo entrepreneur?
Would you rather partner up?
Is your business project close to being ready for launch? Great, it’s now time for the not-as-fun but oh-so-useful part: giving your business a legal existence.
If you decided to create a corporation, the process is a little more complicated than going for an individual company.
Do you want to learn more about these administrative steps? Then, check out our guide to creating a business.
And let us help you set up shop. You can deposit your capital online with Qonto and enjoy an all-in-one business account tailored to your entrepreneurial needs.
Less admin fuss and more time to get your business off the ground and focus on what matters: your core business and your clients.
