Should You Go Into Business For Yourself?
In June I hit the 12-year anniversary of working on my own. I’m 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.
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 had been thinking about it before the event happened so at least I was more 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.
Working for yourself offers many benefits. You can make way more money. You can have lots more time off. You get to make decisions for yourself and others, especially when they value your expertise. You get opportunities to travel if you decide to pursue them, present to groups and possibly get paid for it, and possibly do some things you’d have never had the opportunity to do by working for someone else.
There are also many negatives to working for yourself. You have to pay for your own insurance. You have slow periods and have to hope you’ve been a good money manager. You have to figure out marketing and networking. 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 at all; 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. 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. I put them in that order because these are the major lessons you need to learn. 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 what you learn to do so that other people help you make connections, sometimes making them for you; subcontracting isn’t a bad word when you work for yourself.
2. Money management. When I first started I had my first gig within 2 months, my first paid speaking engagement and my first training session before the year was out. However, I didn’t get paid on any of them what I’d have gotten paid even 3 years later 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. Luckily I knew how to manage money and had lots of credit to dip into, along with a severance package and unemployment I got to defer for awhile, but it wasn’t easy. When it looks like money is coming in easily you need to know how to save it and how to use it when you have to.
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 still not as available as you’d hope they are. This takes getting used to and it can take a couple of years before it all comes together properly.
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, which took me 3 hours a week in time that I suddenly couldn’t devote to my business. Every once in a while I find that I have to dole something out to someone else so that it doesn’t interrupt my working time; you need to be ready for that.
5. Working hours. Yes, above I said you’d 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 hours a day in writing, marketing, creating things, etc. I didn’t sleep well, didn’t eat well. 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. 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. You’ll rest when you’re bringing in money and, if you manage the money properly, find time to rest, vacation, play, eat out, etc.
Can you handle these things?