I’ve been self employed for decades by now, and I wouldn’t have it any other way. We’ve covered the topic of self employment a few times on this blog, but it’s mainly talked about working alone, not working with others. We’re going to explore some of that in this article.
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 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.
And of course, if you want to grow and expand your business, you’re going to have to hire, manage, and lead other employees in multiple different roles than you thought about when you decided to go the self employed business route.
It can be a lonely existence, because you’re probably heard the phrase “it’s lonely at the top”. 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? Are you ready to have employees working with you? Here’s a list of 5 things you should think about below; there’s way more than 5 to consider, 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 state earlier, it’s not meant for everyone.
1. Marketing, sales and networking.
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.
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. And a website is helpful. 🙂
2. Pricing and money management.
When I started the business, I had the luck of having some of my previous clients decide to move with me. It eased the initial pressure a bit, but it took money management skills to be able to sustain the business until it started to take off.
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 business like this one, figuring out how to price yourself so you don’t put people off, at least initially, can be mind numbing.
We can’t tell you how to price services, but 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. And if you decide you want to set up an outside office instead of running things from your home, you have to decide how much you have to spend, how much space you need if you’re going to have employees, and how you’re going to design it so your clients will feel comfortable when they visit your office.
Money management is the biggest deal. 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 client. 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 after all; unless you have nice, consistent growth, it’s not going to feel good long term.
You might spend a lot of time alone, even if you have employees, but you have to guard against not being lonely enough. Having friends and family stopping by all the time during the week might not come off as a professional business, and might take time away from caring for your clients.
Let’s talk about networking. Joining a networking group of some kind not only helps you keep your sanity, but you might even learn something. It never hurts to be in a position to do some free advertising, especially if you or one of your employees belongs to a local chamber of commerce that has regular events like lunches or evening get-togethers from time to time. I belong to a consultant’s group whose topics are geared towards making independent consultants better business people. These can be helpful, but evaluate them properly to see if they fit your needs.
Hiring assistants or co-workers can be crucial to the growth of your business. It helps having a gatekeeper to answer your phone calls if you’re busy, and set up appointments or take notes for you to call someone back if you’re busy when the initial calls come in. It also helps to hire people who know how to do most of what you do, if not everything, so that they can talk and handle some of your customers whose needs aren’t overly critical.
It also helps to hire someone who might handle either some of your marketing needs or SEO needs to help drive more customers to your business. A website is nice, but if you don’t know how to use it to help you reach people on search engines then it’s not doing enough to help you promote your business.
5. Working hours.
Except for certain times, don’t overload yourself when it comes to the hours you work. Early on in your business, you might need to work 12 or 14 hours while you’re building up your business, or in critical times such as when we work extra hours trying to help our clients get their taxes completed on time.
You and any employees you have won’t be up to snuff if you’re all being overworked for a long time. We’ve had clients who worked upwards of 14 to 18 hours a day; that’ll take a toll on both your mental and physical health, and it’s not sustainable for anyone.
Sometimes you have to be ready to step up to the plate and do 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 outrageous hours all the time.
Those are 5 critical things you need to think about before you consider self employment and the possible need to work with other employees you’re responsible for. It can be great being self employed, and I enjoy it, but it’s not easy. Are you up for it?