Should you be the boss of you?
As jobs are more scarce in today’s economy, many executives decide to take the road of being self-employed, or forming a corporation with other unemployed executives. Sometimes, this is the best thing they can do. Sometimes, it simply burns cash and causes frustration.
How can you know if you are one of those who should be working for themselves? Here are a few tips.
1). Everyone’s a “consultant.” If the best you can come up with is “consulting,” you’re probably wasting your time. Everyone and her sibling goes into “consulting” when unemployed. Unless you have an incredibly unique skill that is in high demand, forget “consulting.” All “consulting” on your résumé tells an employer is that you were unemployed.
2). “I want to spend more time with my family.” We once had a client who told us he wanted to go into business for himself because he wanted more family time. We both pointed and laughed. Anyone who wants “family time” is not cut out to be self-employed.
Self-employment is like having a brand new baby. It takes time, nurturing and constant attention. You’ll miss soccer games, birthdays and anniversaries. If your family is not willing to understand (especially for the first few years), you’re doomed. Which brings me to….
3). A supportive family group. If your spouse is not behind you, forget it. You will fail at either the business, your marriage or both. Some spouses are cut out to be espoused to business owners, and others aren’t. If you’re married to one of those security oriented people who likes the illusion of stability and security that a corporate job brings, forget starting your own business. In point of fact, having your own business offers more real security than a job with Megacorp Inc. But some spouses can’t see it that way. If your spouse is not 100 percent behind you and cheering you on, better keep looking for a job.
4). How much structure do you need? Some of us work well with little structure. Others need to be instructed regarding what to do. Either way, it’s OK, but know where on that spectrum you fall. Many people who have been in corporate life for many years need to maintain some kind of rigid structure to their work-day and work-week. Others are very self-disciplined and can get even more done without structure. One compromise regarding working for yourself and structure is some sort of franchise. Understand that only a small portion of franchises involve flipping burgers. If you like the structure of corporate life, but not the hassles, look into a franchise. They’ll provide some structure while allowing you the freedom you also crave.
5). How much living expense and capital do you have? The number one reason that businesses fail is being under-capitalized. You should have enough money to live on and front the bills for your business for at least one year. Two is better. This need is less if you have a supportive, working spouse. Having a spouse with health insurance and a regular paycheck helps. If you do not have at least one year’s working capital that will provide for yourself and your business, please forget it until you do. And do not count on “getting financed,” unless you have wealthy and very friendly relatives. Financing is almost impossible to come by these days. Have your financial house in order before you start a business.
6). You are able to mix patience and urgency. There are two realities with a small business. Money always takes longer to come than you want it to. And, secondly, you must have a personal sense of urgency. You cannot afford to be patient on many things. But you must also realize that almost everything takes longer and costs more than “they” said it would. Learn to live with it.
7). Humility. The most successful businesses are often not the most glamorous businesses. Running a junkyard may well be far more lucrative than running a high-end consulting business. The more realistic and humble you are about these things, the greater your chance for success.
The most successful businesspeople don’t, however, just “fall” into it. They have a deep-seated desire to work for themselves, make a difference, and be free from the rat race. While working for yourself may be a viable option to another corporate job, it pays to know what you’re getting into and if you have the personality and temperament to go it alone.
Join me, a lawyer, a tax expert, a small business consultant, a franchise expert and financing folks for a workshop about working for yourself on Wednesday, Aug. 18, from 8:30 AM until 11:30 AM. More information and registration at http://www.roundhouseadvisors.com/transition .