Over the last 10 years, there have been a lot of people who have decided to work for themselves. Luckily a few have succeeded, but the rate of attrition is over 95% for those who didn’t make it to 5 years. Self employment can be enjoyable, but it can also be hard. Like everything else, there are some things you should know about it before you start and once you’ve started. Here are some of those things.
1. No matter what you’re good at, unless you already have clients willing to work with you, your biggest issue isn’t going to be skill or product quality, but marketing. This takes place before selling because you have to get the attention of those who could possibly hire you to work with them.
This is the hardest thing you’ll have to deal with unless you have a built in type of product or service that people are clamoring for. If you do service projects like installing heaters of all types, or can do plumbing projects at least at a price lower than other companies, you have a chance to make a lot of money.
Marketing is the hardest piece. Very few people are going to Craigslist looking for people selling pretty much anything these days, including services. Marketing products like books, puzzles, or other things are still tough to find people to sell to. Your choices are creating a website, creating a blog, joining a local chamber of commerce, or find a location where there’s already some kind of traffic that appeals to your potential customers. A bakery would work great in an area like this; someone providing home services, not so much.
In other words, do your research before starting your business, especially if you already know and have the skills to do what you want to promote. Not only are there books, but there are organizations where you can learn skills as well as classes at local colleges.
2. The first thing you “shouldn’t” do is buy a lot of office supplies. That’s the tendency for a lot of people, because when they were working other jobs there was always a lot of things such as pens and paper around. Most self employed people find that they buy a lot of these things and, if they last at least two years in business, will still have a lot of those items hanging around 10 years later.
Because times change, you’ll find that many items you still have sitting in your office are things you rarely need to provide services. Only buy the essentials when you start and determine what you might need as things move along. Buy pens though; there’s never enough pens when you need one.
3. You can’t do it all on your own. Okay, maybe you can, but some things you should really think about letting someone else do for you. Paying an accountant to help you get started and to do your taxes makes a lot more sense than doing them on your own. Services such as cutting your lawn and snow removal are partially tax deductible. If you can afford it, hiring someone to come in and do some minor cleaning for you might alleviate some stress to do it all. Did we mention the tax write-offs?
Outside of things like that, it’s possible that you might be able to subcontract certain jobs that someone else can do to save you some time. Many web designers hire people to find or create images for specific websites, and some contractors will pay someone to deliver what’s needed to do repairs or create new structures. If you build some of that into what you’re charging your clients, it’s a pretty good deal and helps you be more efficient.
4. Figure out how you’re going to track both all of your expenses and mileage. There are many apps that can help if you have a smartphone, but many of them are going to cost you a little bit of money, and it’s a monthly fee rather than a one-off charge.
Smartphones, schedulers, even your receipts from having to buy supplies can help you figure out where you’ve been. Keeping a notebook or a calendar or even using an app like Evernote can help you out. If you’re already starting to generate income, something like Quickbooks can help, but hiring someone who’s more of an expert in using it will ease more of your stress; everyone who owns their own business has some kind of stress to deal with. Also, buy a binder of some kind to stuff all those receipts in unless you want to take pictures of all your receipts and save those files somewhere, which some people do.
Of course, you can always hire your local accounting firm to handle some of those things for you; let’s see, who do we know who can do that for you?
5. Try to never spend a lot of your money up front unless you know the equipment you’re using and that you absolutely need it to progress. This is where a lot of people hurt themselves initially, spending money while not bringing in any money and feeling an immediate monetary crunch. Stress is a horrible way to get a business going but there’s no getting around that. Adding money to the stress will make you burn out quicker.
Try to remember that you’re not an employee any longer, which means you have to pay for everything on your own. For the most part, only buying something when you actually need it is the smart move to make.
T L Wall Accounting Blog
