In June I hit the 17-year anniversary of working on my own. I’m a self employed consultant and a registered corporation, so I get tax breaks that some people don’t do. I’m also registered with the state of New York so I’m not considered a fly-by hobbyist making a few dollars on the side either.

leftbackcorner03

I’m like a lot of people; I started my business when my job was eliminated and decided I was tired of working for “the man”. I’d been thinking about it before the event happened so at least I was mentally prepared on that front. However, I quickly learned that instead of working for “the man”, you actually work for “the men and women”, whomever they may be, while still working for yourself.

Being self employed offers many benefits. You can make a lot more money than you can working for someone else unless you end up being CEO of a major corporation. You can have lots more time off… if you prepare properly. You get to make decisions for yourself and others, especially when they value your expertise, without worrying about the background politics or normal employment. You get opportunities to travel if you decide to pursue them, present to groups and get paid for it, and possibly do and see things you’d have never had the opportunity to do by working for someone else.

Sounds good, right? Hold on; there are also many negatives to working for yourself. You have to pay for your own benefits. You don’t get vacation pay. You have slow periods and have to become a good money manager. You have to figure out marketing and networking. You also have to figure out how to put money away for your retirement because, unless you set yourself up with a payroll company, you won’t be putting anything away for social security.

It can be a lonely existence, as you’ll spend not only hours but days by yourself, phone and internet notwithstanding. Some people don’t thrive well in that environment; statistics say 95% of small business owners fail within 5 years. So it’s not easy; kind of like those people who find out that internet marketing is much harder than they thought it was.

Should you go into business for yourself? I’m going to list 5 things you need to think about below; there’s way more than 5 but these 5 are the most crucial for you to think about. If you think you can handle them, or if you’re ready to learn them, then it’s something to think about. If not, well, as I said earlier it’s not meant for everyone.

1. Marketing, sales and networking.

home office
FirmBee via Pixabay

I put them in that order because these are the major lessons you need to learn to be successful long term unless you’re lucky enough to survive on referrals. Everyone knows what they’re competent in, but hardly anyone understands these other principles.

Marketing is getting people to notice you enough to allow you to talk to them about working with them. Sales is where you try to close the deal. Networking is where you go to meet potential prospects (or give others enough information about you so they can help get you more connections), hone your business communication skills, and for specific industries learn more about both what you do and how to become better as a business person. All of these can be done online or offline, depending on what you’re hoping to do.

These are going to be areas where you’re going to have to think about investing a little bit of money for long term benefit. If you’re lucky you might have local business counseling services or universities that offer free or low cost courses for you to learn what you need to know. In my opinion marketing is the most important thing you need to learn; the more people you have a chance to talk to, the more opportunities you’ll have to get to the sales process.

2. Pricing and noney management.

When I started my business I had my first gig within 2 months, my first paid speaking engagement and my first out of town training session before the year was out. However, I didn’t get paid all that much on any of them because I hadn’t learned how to price services yet. Thus, it made money management hard when, over the next couple of years, I got very little business and barely scrapped by.

Learning how to price your services and products isn’t always the easiest thing in the world. If you own a pizza parlor it’s easy because there’s thousands of them in the world. If you do a specific kind of consulting, where you might be the only one in your area doing it, figuring out how to price yourself so you don’t put people off, at least initially, can be mind numbing.

pricing services
Pettycon via Pixabay

I can’t tell you how to price services, but I can tell you what considerations you need to make. You need to figure out how much you need to pay your bills, put gas in your car and feed yourself. You need to figure out how many clients or types of clients you need to earn what you feel you’re worth. You need to be confident enough to not undercharge or to offer discounts before you’re asked, and even then you have to know when to be firm on a price.

Money management is where all the rest of what I talked about comes in. If you provide a service that’s not all that consistent, you need to make sure your rates are high enough to keep you safe monetarily while you’re working on getting your next gig. Sorry to say this, but you’re also going to have to set a budget, not only for monthly expenses but for items you need for your business and potential problems that might arise. This is business, not fun anymore; Consumer Credit Counseling can’t help you manage the money for your business.

3. Socializing.

As I stated above, you’ll spend a lot of time alone, but you have to guard against not being lonely enough. When people realize you’re at home you’ll initially get a lot of phone calls.

Most people don’t know how to deal with a friend who says they’re working from home so they think you’re always available. Eventually you learn how to handle that, but then you have to learn that they’re also not as available as you hope they are. This takes getting used to and it can take a couple of years before it all comes together properly.

Remember me talking about networking? What you’ll find is that self employment can be very lonely, and it’s hard to find like minds who might know what you’re going through. Joining a networking group of some kind helps you keep your sanity, and you might even learn something. I belong to a consultant’s group whose topics are geared towards making independent consultants better business people. I used to belong to networking groups that were in my industry, which not only helped keep me up on what was going on but offered the potential to meet people I could do business with. These can be helpful, but evaluate them properly to see if they fit your needs.

4. Delegation.

I know what you’re saying; you work alone. If you do any business whatsoever you’ll learn soon enough that you just don’t have time to do everything, and you might not be proficient enough to do it all.

It took me 4 years before I finally hired an accountant and it was the second smartest thing I ever did. The first was to hire someone to cut my grass and shovel my driveway, both of which took a lot of time away from working on my business (it also turned out I was allergic to cut grass so I was physically miserable).

One thing I haven’t done, which I think about often, is hire a virtual assistant to handle certain aspects of things I have to take time out for, such as sending out marketing letters and setting up my social media marketing. I know a lot of people who use services like these, and if you have consistent income coming in it can be quite beneficial for you. If you get lots of phone calls you can hire someone to act as an answering service for you. Truthfully, if there are aspects of working your business that you don’t like, you can always find someone who’ll do it for the right price; just make sure you can afford it easily enough.

5. Working hours.

Yes, above I said you “could” have more free time. That’s actually kind of a misnomer because you will have to work harder than you ever did before. There’s so much more you have to do and you’re totally dependent upon yourself.

In the early years I was working 16 to 18 hours a day writing, marketing, creating things, etc. I didn’t sleep well, didn’t eat well. I’m diabetic and my health suffered a bit because I wasn’t taking care of myself regularly, and I got tired while pushing myself way too hard.

I rested when I had gigs because I had to be totally alert when working with clients, plus I had the money coming in so I could relax. Yet I also worked more hours because my hourly rate was high and I wanted to put away money in case I had a long wait before the next gig (I talked about that above).

You have to be willing to step up to the plate and give whatever it takes to get work, keep work, and start the cycle again. But you also have to be smart enough to realize that you can’t push yourself too long working the kind of hours I did, especially if you’re older; I started just before I turned 42. Even now I tend to be at my computer a lot of hours, but I get up hourly to walk around and try to clear my head, eat at more regular hours and work on being in bed at least 7 hours a night… when I can, since I also now take care of my mother who lives with me.

Those are my 5 more critical things I believe you need to think about before you consider self employment. If you click on the link talking about my 17th year of self employment, there are even more tips for you to consider. It can be great being self employed, but it’s certainly not easy. Are you up for it?
 

Digiprove sealCopyright secured by Digiprove © 2013-2018 Mitch Mitchell