The working world ain’t what it used to be. Chances are, your parents spent 20-30 years employed by a single corporation. Right now, they may even be collecting a pension from that same entity.
It’s funny how things can change so fast.
Today’s fragmented employment landscape, known by some as the “gig economy,” is much less secure. Many Millennial professionals endure fixed-term contracts, often without benefits. They’ve spent much of their working life has in a feverish search for a permanent role.
Frustrated by their lack of progress, some have chosen to opt-out of this game. Instead, these folks have chosen themselves, becoming entrepreneurs, freelancers, or remote workers.
At a minimum, they have regained control of their time. These newly-minted entrepreneurs are free to make their own schedule, pursue their own clients, and do meaningful work. In time, some will amass an income above what they can earn in today’s workforce. And thanks to the miracle of WiFi, they can do their work from wherever they choose.
Are you looking to join the ranks of the fabulously self-employed? Below, we’ll lay out the realities of being your own boss, and lay out a road map that will get you there.
Being your own boss is fun – but it has its challenges as well
Starvation wages, meaningless work, nightmare bosses – these days, people have all the reasons in the world to start their own business. Outside the corporate realm, a world of endless possibilities await.
You can set your own hours. You’re free to decorate your workspace however you choose. You can enjoy leisurely lunches without worrying about rushing back to your cubicle. Being your own boss comes with many benefits. However, it also comes with great responsibility.
In the corporate world, your paycheck is the same every two weeks. As a freelancer, revenue is proportionate to the amount of work you get done. If you’re an entrepreneur, you may have to work for months before establishing sustainable, predictable cash flow.
Taxes are another unpleasant aspect of self-employment. In the workforce, companies automatically deduct taxes off every paycheck. As a business owner, you are directly responsible for setting aside your own taxes. Many newbies don’t realize this and spend/re-invest too much revenue. When tax time rolls around, they learn a painful lesson they won’t soon forget.
Financing is another obstacle. Ideas are a dime a dozen – finding the capital to bring them to life is much tougher. Recently, it has become easier to jump this hurdle, but still – raising thousands of dollars is no small feat.
Ready to jump? Keep these transition tips in mind.
Are you tired of Janice from Accounting microwaving fish in the break room? Sick of your manager micromanaging your every move? Have you attended your last directionless meeting? At times, the temptation to snap-quit can be overwhelming. But, before you hand in your resignation, ensure you’re ready to take the plunge.
First, start working on your idea in the evenings and on weekends. It can take months of effort to get a business off the ground. You’ll have to prospect for clients, create prototypes, and test strategies before seeing your first dollar of revenue.
Attempting to do all this on limited savings can be stressful. Excessive amounts of stress can impact your productivity and your ability to think clearly. Until you establish your base cash flow (one that covers rent/mortgage, groceries, and bills – all after taxes), don’t jump ship.
However, some work/life situations can suck up the vast majority of your free time. In these instances, you’ll want to save up a considerable cash buffer before marching into your bosses’ office. Set aside a minimum of six months worth of rent/mortgage/bill payments. This way, you have enough “runway” to get a cash flow going before burning through your savings.
Secondly, be prepared to work your tail off. In the corporate world, your manager is responsible for keeping you productive. When you own a business, that task falls on your shoulders. Nobody will check to ensure you aren’t playing Candy Crush at your desk.
To succeed as an entrepreneur, you MUST develop self-discipline. To stay on task, ensure you’re pursuing meaningful goals. If they are, you’ll gladly work for hours without compensation. Every day, define your most important objectives. Once you have, pursue them relentlessly until they are complete. Finally, embrace schedules. You CAN meet your best friend for lunch and get stuff done. It’s merely a matter of scheduling your time and sticking to it.
Never dine alone – a newbie’s guide to networking
No person is an island, in life or business. If you want clients, you’ll have to reach out to them – by e-mail, by phone, and yes, by meeting them in-person. If you’re introverted, the very idea of networking may terrify you. Don’t be scared – you don’t have to be their BFF, you’re simply offering to solve their problems.
Don’t know where to begin? Start by visiting your local Chamber of Commerce. They regularly host mixers, where you can meet other local entrepreneurs. Target those in your niche by joining trade organizations. Often, they’ll have a database that lists members that live in your area. Make contact and set up coffee dates with them.
Above all else, get to know others before hitting them with your elevator pitch. Once you have established cordial relations, they’ll be more receptive to starting a business relationship with you.
If you run a web-based business, embrace LinkedIn. Given the interconnected nature of today’s world, you may be only a few degrees of separation away from your dream client.
Sometimes, you’ll need outside help
So, you’ve launched your product and orders are coming in… FAST! You’re enjoying success beyond your wildest dreams – but there’s just one problem. You’ve been pulling 14 hour days, 7 days per week for two months. Now, you’re on the verge of having a nervous breakdown.
You need capital to invest in a fulfillment house, an employee to answer the phones, and so forth. But, you don’t have tens of thousands of dollars lying around. You tried to get a meeting with your bank’s loan officer, but they shut you down the minute you admitted you were a new entrepreneur.
Banks don’t have time for anyone that isn’t well-established. Fortunately, plenty of non-bank lenders do. For example, in Australia, plenty of firms offer capital to those just getting started in business. These lenders don’t accept completely fresh businesses but once you are running for six months and generating some revenue they will be open towards lending you small amounts (normally based on up to 3m of income).
Working yourself isn’t easy – but it’s worth the struggle
When you work for yourself, you can’t work for two hours and spend the rest of the day on YouTube. Building a business requires real effort. However, if you put in the time, it can ultimately give you the freedom you need to reach your true potential.