For a CFO considering founding his or her own start-up, juggling the demands of a new venture while also performing a full-time senior finance role takes considerable foresight and management.
Startup work environment
Two start-up founders who have successfully navigated running a start-up while working as full-time employees are Sam Eastlake and Roger Sciberras, co-founders of men's online fashion boutique, Gallantoro.
Sciberras and Eastlake have been best friends since high school. The pair subsequently worked together for a sports supplement brand.
“Sam was my boss, which made everything easier. We'd been talking about starting a business together for quite a long time,” explains Sciberras.
“We shared the same values about the importance of manliness and gentlemanly behaviour, and wanted to start a business around these notions.”
Initially, the pair wished to establish courses to help young men build traditionally 'manly' qualities, such as bush skills and mechanical knowledge.
“Then we thought, how can we do that and make a profit, so we can back that up financially? Sam had the idea of a retail store. Because we also felt it was hard to find unique, high quality products in Australia as gifts,” Sciberras explains.
“We both love American-made products, so we wanted to have a retail store where we could offer interesting items from the US and around the world.”
Sciberras and Eastlake tipped in $10,000 each to bootstrap the business, spending the founding capital on setting up a website, buying stock and marketing.
Wait till the cash flow can support you
“Initially, we didn't leave our jobs. It was a side hustle until the business built up enough so we could generate a proper income from it,” says Sciberras.
He still balances his start-up commitments with another job, although both Sciberras and Eastlake have left the sports supplement business they worked in while starting their own company.
Sciberras says a concerted marketing push before Christmas 2016 gave them the ability to build the business to a point at which they could leave their full-time roles.
“We put one ad in the Australian Financial Review and we went from turning over $2,000 in sales a month to about $30,000 in sales every month. It showed us people get the concept and want our products and we were able to expand on that,” he adds.
Gallantoro is now the Australian distributor for some of the brands available on its website and Sciberras says wholesaling is one of the fastest-growing sides of the company.
“We recently participated in our first trade show and received a great reception. We also want to get a few more brands on board,” he says.
The pair are genuinely excited by their venture, and bristling with ideas, such as a plan to expand their market into 'mini gentlemen', young men and women.
Says Sciberras: “We have too many ideas and not enough manpower to do everything.”
They have also revisited their original idea of a business that could bring back 'men's skills.”
“The more exciting part for me is an annual camping trip we are organising where we take men into nature. We'll invite experts to teach us basic canoeing techniques or how to make fire, to make it an adventure. The idea is for men to get together and share stories around a campfire,” Sciberras says.
“I believe this is good for men's mental health. Now many people live in cities and we're not in touch with nature. We believe our courses could help turn that around.”
Balance salary and freedom while you transition
Sciberras' advice for people transitioning from a real job to a start-up is to find a role that pays a good salary while also giving you freedom.
“I could often work from home in my real job, so I used any kind of downtime I had, to work on my start-up,” he explains.
“I'm a morning person, so I set my alarm for 4am to get up to work on my business. Then I would go to my day job, and squeeze in work on my start-up in the downtime or at lunchtime.”
Sciberras' business partner Sam Eastlake says one reason for starting a start-up at work is to diversify income sources.
“I'm a big believer in having a passive income stream and that can come through investments or by having a business. I decided to pursue a start-up to generate that passive income stream,” says Eastlake.
“I think it's important for founders to start a business while they still have a career and a solid income, unless they are fortunate to be able to quit their career without getting out of the business,” he says.
Eastlake says it's important not to compromise your career or job performance by focusing too much on your start-up in your work hours.
“It takes a long time to establish a start-up so don't jeopardise your income stream prematurely,” he says.
“Don't show up at work and start cutting corners because you may be in that role for some time. I did a lot of work on my own business after hours and on weekends, working on the business strategy. Once the business was in place I packed orders in the evening and in the mornings before work,” he explains.
Disclosure decisions
Eastlake advises would-be start-up mavens not to rush into quitting a full-time job before embarking on a start-up.
“The business needs to be able to pay you. The timing will depend on when the business has the cash flow to service the inventory needs of the business and the growth you need, as well as your salary.”
The big question in this situation is whether or not to tell the boss.
If you're setting up a start-up as the CFO, whether you tell the CEO or board will depend on your relationship with them.
On the other hand, as finance chief – if you have a staff member that wants to set up a start-up, your response will likely depend on the nature of the start-up.
Key considerations could include whether the nascent firm could be in direct competition with your business - or if it could help the business move forward.
Juggling a full-time job and a start-up can be a great opportunity – but also a challenge.
CFOs considering launching their own start-up may see it as an opportunity to transition into their own new business over time.
The transition could give savvy CFOs a chance to bring in the sharp financial acumen they have developed during their time as a senior finance executive into their new venture.
Key Takeaways of future of work startups
- Be careful of compromising your full-time role by paying too much attention to your start-up at work.
- Ensure the business has enough cash flow to support you before leaving a full-time role.
- Think hard about disclosing your start-up to your superiors. Weigh up the impact that may have on your reputation in your 'real job'.