After close to thirty years of working for other people, I have finally decided to hang out a shingle on my own. For some people, self-employment is a natural extension of who they are. For me, as I insist on the possibility of great success in anything I undertake, the decision to go into business for myself took a lot of soul searching, discussion and research.
In the current economic climate, a lot of us are faced with the need to create opportunity for ourselves. Until quite recently, I was a senior executive at a division of a large, publicly traded company. When my company merged out of existence, I took some time off in order to regenerate and to pursue new business opportunities. When those opportunities failed to materialize, I began looking for the security of new employment. Unfortunately, the past twelve months have not been the best of times for job seekers, even for well qualified job seekers.
Although I did not find work in the past twelve months, I did find that I was turning away a large number of opportunities to work as a contractor. Last week, after turning away a fellow I know for the fourth time this year, it dawned on me that I needed to take a deep breath and explore self-employment. After all, I reasoned, my Dad was self-employed before he retired. My wife’s parents were self-employed. Indeed, the busiest people I know in today’s workforce are self-employed. Why shouldn’t I just open a business on my own?
Having at least opened the door to self-employment, I made a plan so that I could assess the viability of such a venture. I determined that I did not need a business plan, at least initially, but that I did need to know that there was a need for my services and that I could afford to work on my own. With that in mind, I determined that I needed to explore the following:
Will I Have Clients? It does not matter how highly skilled you are if you do not truly believe that you can attract clients. One fellow I know is doing minimal marketing for his business and relies only on traffic generated by his website, which is completely passive. I called a few of my business contacts to discuss their need for my services and found that they were far more receptive to paying me directly than they would have been if I had taken a job with a bigger company. They all quickly recognized that the value that they would get from me at my personal hourly rate was far better than the value that they would get if they had to pay the “going rate” charged by any company that would employ me. (For me, the “going rate” for my services would be between $300 and $600 per hour. One of the business people I contacted is paying close to $1000 per hour for services comparable to those that I would provide. I will likely charge about $200 per hour.)
Will my Spouse be Supportive of My Decision? In going into business for oneself, it is important that the decision be made with the full support of one’s spouse, especially for people who will be working from home. After I established that I think I will quickly have clients, I then approached my wife to make sure that she agreed that my decision was a good one. That allowed me to turn “My Decision” into “Our Decision.” That will do wonders for my piece of mind!
What Do I Need To Do To Start a Business? Having decided that I would start a business, I then needed to establish what that means. For people in regulated industries, there will be regulations that require compliance. Most people will also have to obtain local licenses. There is also the issue of forming an appropriate business entity and determining the best way to deal with tax issues. I suggest consulting with an attorney, an accountant and an insurance provider, at the very least in order to ensure that you have all of the necessary data on which to base a business. If you are part of a professional organization or association, you should also check with the organization or association to determine whether it offers any guidance.
Those are the three steps that I have taken so far. My goal is to establish my business within the next week and to start generating revenue within the next month. I shall periodically write about my experience as a small business owner on these pages and I hope that we can have a good dialogue about the pros and cons of business ownership.
How many of my readers are exploring business ownership as a way to stay ahead, or even just to catch up, in our current economy? Have you ever started your own business? What experiences can you share with us? What have you learned from your experiences?
You need networking and perseverance, also get ready to work 15 houds a day.
I did a little finance consulting after I left corporate, but that was strictly as an independent contractor and my “employer” found it easiest to put me on the payroll as a temporary employee, so I didn’t have to worry about additional estimated taxes, etc. But that wasn’t the area that interested me.
In setting up the sculpting/carving business, I did get a local business license and liability insurance and all that. I looked into different business forms — sole proprietorship, LLC, other forms of incorporation and had to make a determination regarding those, but, quite honestly, the biggest concern was the insurance and license.
I don’t, at this point, want my business to rule my life — too many pieces that I want to do! With that in mind, I’m approaching it slowly, though I will be doing some additional marketing next year in the form of shows, etc. and have taken to carrying business cards with me. I get a lot of questions, requests when I’m just out and about because of my custom canes.
In pricing, do remember to take into consideration that YOU will be paying both sides of social security, etc. and for your healthcare. You might want to bump your hourly rate up a tad to cover those, if the going rate is so much higher than what you’re thinking of. Just a thought.
LOL John is right! You work long hours when the demand is there, if for no other reason that it might be followed by a dry spell!
I have done it before and I am thinking about doing it again ! If I had not closed up shop I would have been Retired and Dave you are Without a doubt In the top 1% as far as Smart people that I have ever met For you it is a no brainer to start your own Business and Failure will not be an option for whatever venture you choose because I am sure you will chose a good one. Good Luck!!!
Good luck, David. I have never been self-employed, and can’t imagine it as a retired teacher, but my brother did the same as you. He worked many years as a machinist for other people. A few years ago, he realized he was the one making most of the contacts that generated income, so he worked out a deal with a friend and opened his own shop. He is busier than ever, and he discovered that companies would rather hire him to do a job that he would get to directly than go through the layers of hiring another firm that might take three or four times as long to deliver.
I hope this works out to be succesful for you.
starting my own business is something that came naturally to me. its not to say that i have not made mistakes and lost a truck load of money because of stupid mistakes(read experience) but i have learned a lot out of the false starts and i wouldnt trade the lessons learned for anything. i love running businesses that i have a mad passion for. makes life very interesting and unpredictable
It is also important to check with financial and legal advisors. When I started a business I was surprised to learn about payroll taxes. I had to significantly revise my fee structure when I learned I would have to pay more than regular income taxes on my revenue.
I would have a hard time dealing with all of the administrative matters that go hand in hand with running a business. Stationary? Marketing materials? It would be a very scary world for me personally if I had to do it.
I’ll second John’s comment upthread. Prepare to work harder than ever before and network like mad. It’s definitely not for those who aren’t keen on self promotion.
I have had my own business for 12 years.
There are pros and cons and I won’t bore you with the list of each as I am sure you know. It’s not all it’s cracked up to be. . .but. . .a big but. . .there is some security in that you can never be downsized or laid off – you can only fail, semi-succeed or vastly succeed. You control your own destiny to a certain extent. You can also go in different directions and even sell it and make some coin if you play your cards right.
You didn’t provide details about your own business so I will just comment on mine – the majority reason of why many businesses in my industry fail is being undercapitalized.
In that, being a “savingadvicee” make work against you, in that doing everything on a shoestring and with minimal debt may not be the best course. There are times when your collections/revenue may be down and you need to survive on a free flow of credit. You may want to act counterintuitively and spend when you think you should save. Of course, nothing can drag you down financially like a failing business. . .but in your business plan, you should plan for months where there are lean times.
That’s all I can think of. Good luck.
Working in your own business is great but as many poeple have often heard it can go horribly wrong if not done correctly. I have run my own business now for about twenty years and if I knew when I started all the things I know now I would have made a lot more money.
One tip I have to offer is to make sure that you have a plan. Be careful about friends and family giving too much advice and try to associate with people that you know already run successful businesses. Don’t be scared to ask these people lots of questions. If you don’t know anyone then ask strangers. Don’t get too personal like asking ‘How much money do you make?’. Ask things like ‘You seem to do very well in running your own business, you must be very disciplined and hard working. Do you mind giving me an insight into some of the tips and tricks for new people just starting out in their first business?’
You may just be pleasantly surprised how willing that person may be in helping. I knoe that eveytime I have been asked similar things, I am only too happy to convey my own thoughts an experiences. Business owners are often very proud of their achievements and love to be recognised for this.
I can say from personal experience that working for yourself is a truly great feeling. Of course, it is not for everyone but I wouldn’t have it any other way.
Having your own business is the most beautiful thing in the universe. 🙂
Yes, it will be a struggle, and there is no easy way to go about it, but it is wonderful not being a slave to others and having someone else dictate your life.
I work more hours than most people who work simple 9-5, but I am Free-er. I can dictate my own schedule.
Plus, I get to do what I love, instead of doing what others love me to do.
If you work for yourself, you sell your self. And your job follows you everywhere. However, if you need to take a morning off, or deal with a personal issue its no big deal. And I would be miserable without that luxury.
I love working for myself.
For the last three years I’ve tried to hold down a full time job and work for myself at the same time. While I’ve been wildly successful as a career starter in my full/time job, my personal business has SLOWLY grown.
It’s a hard balance to strike – the security of full-time work vs the unpredictable self-employment realm. For now, I really enjoy the stability of my current job, and have to feel content to approach my side business as a hobby. I know it could be more successful with more effort, but I also want to have an enjoyable life and successful marriage – all which vie for those few spare nighttime hours…