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ASK SMALL-BUSINESS OWNERS how much time they spend on the job and the answer is usually the same: all of it.

Yet, some entrepreneurs manage to launch a start-up on the side without quitting their day job. While it's a lot like leading a double life, many say the rewards are worth it — namely, extra income and the chance to test out a new, often more enticing career without losing steady paychecks and benefits.

"Starting a business on a part-time basis is one of the most efficient ways of finding out if a business will work for you," says Paul Edwards, co-author of 16 books on self-employment, including "Finding Your Perfect Work." It's a good way to test whether you "can market it, and whether it's suitable for ultimately ramping it up into a full-time career," he says.

Educators Buy Alpacas

The drawbacks of juggling a full-time gig and a start-up are many, however, and can come at a steep cost to one's personal or family life. "There is a period of about two years in my life that are lost," says Donna Binder, 53, a longtime educator in the Houston school district who decided to start an alpaca-breeding business on the side in 1997.

Binder and husband Laurence, also an educator, were inspired to raise alpacas — shaggy-haired animals that are cousins to llamas — after deciding they wanted to leave city life behind and move to the country. Worried about the expense of buying land, "we thought we'd look at different ways to get tax breaks — and that led us to having animals," she says. Intimidated by cattle ranching, the couple discovered gentle-natured alpacas at Houston's big annual rodeo. Within months, the couple had sold their city home, moved into a rental, broke ground for a new house on an 18-acre farm, and acquired five alpacas.

And that's when "our lives spiraled out of control," she recalls. "We were on the road two-and-a-half to three hours a day. It was build, drive, work, build, drive, work." It didn't make sense for either to give up their day jobs in the school district and lose their retirement pensions.

Now, almost 10 years later, "it is still an out-of-control life, but manageable," she says. Binder cut down her hours, and works part time as a counselor to the deaf, while her husband remains a full-time assistant superintendent. The alpaca businesses, she says, is booming. There are now 70 animals on the farm, and the couple has sold hundreds of alpacas, which often price at more than $10,000. Meanwhile, the two have made it work by hiring help and starting a cooperative-farming system to pool resources with other alpaca breeders in the area.

Want to be a part-time entrepreneur? Don't forget these important steps, says Barbara Weltman, author of "The Complete Idiot's Guide to Starting an eBay Business."

Check your insurance policy. People who start side businesses from home often assume their homeowners' insurance will protect them if a customer is injured or if office equipment or inventory is destroyed. But that's not always the case, so check the policy. "This is not the kind of thing you want to hide from your insurance agent," she says.

Do it right, as in legally. Obtain the proper license or permit. "If you get stiffed and you want to sue someone in small claims court, you're not going to be able to unless you've been operating legally," she says.

Keep records. Don't use the shoebox approach — after all, you want to know if you are making or losing money. And while tax rules require income to be reported, some part-time business owners favor keeping it under the table. "People might think they are doing a good thing by hiding the profit, but in fact they are probably losing out, as they might be entitled to a loss," she says.

Separate personal and business expenses. The best thing to do is set up separate bank and credit-card accounts for the business. "It will help you keep everything straight," Weltman says.

Formalize the business. Setting up a corporation or a limited-liability company will protect your personal assets — and it's never to early to do that. "You can do it as you open your doors," she says.

Life is also busy for Nanda Holz, 32, a mechanical engineer for a San Jose, Calif., networking company by day, and proprietor of road-bike distributor Spin Cyclz on nights and weekends. "I always used to watch 'American Idol' or 'Desperate Housewives,'" says Holz, who launched his side business a year ago, and has since sold 47 bikes. "Now it's like 'I have to do this, I have to do that.' So I'm a little disconnected."

Not that he'd have it any other way. Holz, a one-time motorcycle enthusiast, wiped out four years ago and decided to switch to safer, crank-forward road bikes. The special bikes, which have lower seats and pedals closer to the bike's front, are designed to take the pressure off the rider's shoulder, neck and back. Holz became an instant fan but had trouble finding the bikes in local stores. So he decided to buy inventory, rent a storage facility, and get in the distribution business, "just to see if I could take something that I love and do more with it," he says.

Holz has cut back his work schedule at the networking company, typically logging in 30 hours between Monday and Thursday. And while he might answer a bike customer's email or two during the day, he always shuts off his cellphone. "You have to try and stay focused at work," he says. Since his side business is still at an early stage, he's glad he's kept the day job. "It's a good way to get your feet wet to see if it's going to work or not work, and still have the security of your regular income," he says.

Finding the Right Balance

Balancing a day job with a side business is stressful, though. "You're thinking about two things at once," says Richard Stim, an attorney and author with Nolo, a Berkeley, Calif.-based publisher of self-help legal books. In 2004, he decided to start a side business, an audio-book production business called Sutro Studios, as research for "Whoops! I'm in Business," a guide he wrote on turning a passion or hobby into a business. The new studio landed a contract almost immediately, and "boy, you really freak out once you've got a contract," he says. "It became a matter of, 'How do you stay sane? How do you not blow it at both jobs at once?'"

Stim says he's able to swing both by working at Nolo from home, which saves valuable commuting time, and by making his wife a partner at Sutro Studios. Like the alpaca breeders, he's found a tax benefit to the side business: He can write off the cost of audio equipment, which he enjoys as a long-time music-production enthusiast. If the side business is something you love, there's nothing like it, he says. "It augments my income, and it gives me something fun to do," he says.

Moonlighting as an entrepreneur requires commitment and planning, says Edwards, the writer of self-employment books. "The primary thing that comes to mind is having a consistency of effort," he says. He recommends that people spend at least seven to eight hours a week on the venture — and not invest too much money at the outset. "The investment you make is more time than money."

Make sure you come up with a business plan, outlining who your customers are and how you can market your products. And especially if this is a new career path, make sure you acquire the necessary training and experience, he says.

Because of the drain on your free time, be sure to involve family members in the decision-making process. "Without the proper amount of family consent, this can torpedo the relationship with the family," he says.