You say you want a revolution? Or at least to quit your lousy job and become self-employed? Below are talking points from my recent talk to DRIVE, the Minneapolis Chamber of Commerce’s emerging leaders group.
Like what you read? Sign up for my upcoming class, Going Solo: Self-Employment and Small Business Fundamentals, in which I’ll cover much of this material and answer your specific questions.
DIY: The battles and benefits of being your own boss
I come from fantasy land called CoCo. If you work in a cubicle farm, you’ll scarcely believe that there’s a place where most everyone you run into loves their work and works on what they love. Every day. All the time.
But its true. At CoCo, we have over 600 members who are mostly self-employed, as tech and creative freelancers, consultants and startup founders.
- I’ve been self-employed myself for over 20 years.
- I’ve convinced a number of people to make the jump.
- And I’ve counseled many more people in how to survive self-employment.
So, here’s what I can tell you.
It’s not for everyone.
People who do better at self employment tend to:
- be self-directed, or intrinsically motivated
- like open-ended creative challenges
- chafe at being micro-managed
- prefer guidelines to hard and fast rules
And it’s harder than it seems.
- You’ll spend more hours than you’re used to, only half of which are probably billable
- You’ll do a wide variety of tasks, some of which you definitely won’t like
- Self-employment can be anxiety inducing, unless, of course, you enjoy public speaking, sales, accounting, rejection and negative cash-flow.
How do you know you’re meant to do this?
- If it’s all you can think of.
- If people telling you “you can’t” just makes you want to do it all the more.
- If you find yourself becoming insubordinate at work because you’re “too entrepreneurial” or “too creative.”
So, let’s say you’re about to jump ship. How can you be sure you’ll be successful? Let me share with you what I think are the keys to self-employment success.
Start with the end in mind
Try to look ahead in time and ask yourself:
- Will this forever be a freelance practice?
- Do you imagine that you’ll hire employees?
- Will you sell the business?
- Can you create something that will thrive without your daily involvement?
Be original. Don’t copy everyone else.
You need a unique angle.
- Be more specialized
- Be ridiculously cheap
- Be outrageously expensive
- Be more comprehensive
- Be more convenient
In other words, build something remarkable. Geek Squad founder Robert Stevens says, “Marketing is a tax you pay for being unremarkable.”
For more about this, I highly recommend Seth Godin’s book “Purple Cow.”
Don’t confuse yourself with the business
Many of us go into business because we love what we do. I was a really good copywriter. I know brilliant chefs, programmers, dog groomers, handymen. What we share is that we’re great at the craft. But when you go into business, it’s no longer just about the craft. It’s the craft, wrapped up in business. That changes everything. Or it should. For some perspective on this, I recommend “The E-Myth Revisited,”by Michael Gerber. That book alone will help you graduate from self-employment infancy to adulthood.
Don’t be cheap
Invest in your branding, in getting set up as a corporation, in having the proper insurance. Business is all about confidence. And it’s hard to have confidence in someone who doesn’t invest in themselves.
Charge the right price
Spend time calculating your rates and on your pricing strategy. If you’re gonna freelance or consult, be sure to use different online rate calculators, such as the ones at Freelance Switchand MBO Partners.
Prepare to charge more than you think you should. Making $80k a year working for the man? Prepare to bill upwards of $150k to even have a comparable lifestyle.
Don’t just sell time
Move as quickly as you can from selling time…to selling product, licenses, subscriptions, seats, etc. Time is your most precious commodity, so you want to invest your time in a way that you create things that can be sold in multiples. Built it once, sell it many times.
Take your finances seriously
- Don’t be your own accountant. Paying a good accountant is worth every penny.
- Don’t fuck with the IRS. Pay your taxes…all of them.
Don’t go it alone
Finally, be sure to find a community of people who are going through a similar journey. They’ll provide you with emotional support, new ideas, feedback on your ideas, resources and new business leads. Disclaimer: I happen to run just such a community. Memberships available
Some additional thoughts…
- Don’t play small. The market is crowded with people with uninspiring, undifferentiated offerings. And they are are killing each other in a race to the bottom. You want to offer the thing that people will gladly pay top dollar to have. Whichever direction you choose, understand that it’s a self-fulfilling prophesy.
- Don’t put too much stock in the small-business press. I’m talking about magazines like Inc, Wired and Fast Company. Their job is to attract eyeballs, not help you succeed. Consider that the people who write the articles are writers, not entrepreneurs. They write breathlessly about all the great emerging businesses. They never follow up and tell you how many of them have failed.
- Be open to partnerships and joint ventures. If you’re a creative, an operations-minded partner (or vice-versa) is a godsend. If you’re great at the doing, but another business is great at the selling, you might have a potential partnership. Warning: don’t entrust the financials and taxes to your partner without regular and formal oversight.
In closing, being self employed comes with lots of built-in benefits. Like to work late and sleep in? Like long weekends? Like to travel? Like to have a few pints over the lunch hour? Then do it…because you can. When you’re self employed, there’s nobody to give you permission or reward you for good behavior. Only the market will punish you. You’re truly free to fail…or succeed on your own.