When you say the offer letter states no engagement in competitive activities - explain. Is this a non-compete agreement only during your employment with the company or does it cover a period after you leave the company?
If it does not cover the period after you leave the company, you are clear to go out and compete.
If you are passionate about starting your own company, do it. Sounds like you have the knowledge, experience and even some clients to get started.
I suggest a man-to-man conversation with your current boss/owner. In explaining your reasons for wanting to break out on your own, I would only speak to your personal reasons - stay away from any comments about him, his management style, internal issues like morale, etc. It will do no good to try to show him up and make him think he`s a bad operation manager.
Keep the conversation positive and all about the "whys" you have made the decision to start your own business. Being a business person, if he is honest, he should wish you well on your new adventure and journey. Keep your personal opinions on the old work environment to yourself and move on. Because in reality, once you make the decision to leave and go your own way, what is happening at the old place is not important - forget about it and him. Break away clean and on the best terms possible. Burning bridges is a bad habit to start.
If the boss decides to turn this conversation into a true exit interview, be honest in your opinions but don`t go personal. State your opinions and observations briefly. If he asks questions, give him answers - you will be doing him a favor and your leaving and a good exit interview could help him to make some changes if he feels they are necessary.
Hope this helps and I wish you much success if you make the decision to start it up!
If you signed a non-compete agreement then you should honor it until you have an attorney read it to see how binding it is.
Definitely don`t talk to any of the company`s clients about the situation or you might be accused of poaching.
People sue at the drop of a hat these days so just be sure to exercise caution in everything you do and with everyone you talk to. Get legal advice before you get much further in your planning.
I definitely wish you the very best of luck.
Personally, I really don`t see a need for a lawyer and spending money for nothing. Don`t compete while you are employed with your current employer - it`s that easy. That`s money you can save for your new business.
You may think you know what he will say and you may be dead on ... but keep those thoughts out of your mind. By going to him with a definite end of employment date you go into the conversation in control. Just have what you plan to say laid out. Resist the temptation to anticipate what you think he will say and just stay on YOUR message. If he starts drilling you, ask him if he would like to do an exit interview - that is an entirely different conversation AFTER you tell him of your new plans. Be in control. You might as well start now - it is a necessary trait as a small business owner.