1. Benefits of Working for Yourself
The benefits of working for yourself are phenomenal and potentially endless. There are vastly more benefits, in my view, than drawbacks. Like many of you may decide to do, I quit my day job with a new home and heavy mortgage, less income from my new Accidental Business than anticipated, and a new marriage with additional costs and heavy home obligations. Still, the benefits of working for myself significantly outweighed the downsides. Personally, I was tired of the layoffs in information technology; tired of the constant boss changes that left us all wondering if we would be replaced by the new boss’s best friend from his or her former company. This, in many respects, was more stressful than quitting and “going for it” on my own. After careful analysis, you may come to the same conclusion.
So what are some of the benefits?
1.1. Stable Income
Did I just say stable income? Yes, stable. Why? Because you are setting your salary, not some random corporate representative from human resources in conjunction with an accountant who wants to cut costs.
How much are you worth? I don’t know—you tell me! Do you want an annual 5 percent raise? Give it to yourself. Do you want to run the financial show? Run it. You can actually have a more stable income by being self employed than by working for Corporate America.
1.2. No More Job-Loss Fear
One of my initial fears, leaving Corporate America behind and pursuing my dreams, was that I would lose contracts—the key to keeping my business alive. But what was more likely? That, due to a failed project or a missed deadline or office politics, a new boss would come in and would be accompanied by inconsistent, seemingly confusing changes that were not communicated to the rest of us, leaving anxiety running rampant? Or that I would be so complacent as to lose contracts and either not get them back or not replace them?
I finally decided to bet on myself, and I am glad that I did. Looking back, I wouldn’t change anything, except maybe not waiting so long to take that first step (or leap, as it were). However, the timing does have to be right, and I will help you figure out whether or not it is. Begin by thinking about what an ideal time would be for you. Figure out what is ideal and what isn’t—and what is an excuse for procrastination. Ask yourself what your job-loss fears are, and what you can do by being your own boss to mitigate them.
1.3. Additional Income
The additional income that comes with being your own boss, in my view, is the icing on the proverbial cake. The maximum amount of income is purely based on your business model, your ability to adapt to change, your effort, your decisions, your relationships and networking, and your business planning. Are you getting the picture? The additional income you can earn is literally entirely up to you. You may just want to earn what you’re making now but be your own boss and have some additional freedom, in which case, fine—the goal setting is yours to do. But the possibilities for financial freedom are truly endless.
It is a mazing how quickly you begin a business and then cannot stop thinking of ways to expand it. It seems that from the very same day the concept begins, the planning doesn’t stop and you are constantly, sometimes hourly, coming up with ideas on ways to make more money.
Ah yes, freedom—that thing we all so cherish, yet seem to freely give up when we happily sign onto new jobs as employees. Many of us have even been guilty of going out and celebrating this relinquishing of our freedom as a great new job with outstanding prospects, only to be disappointed in the feeling of being chained to our desk or BlackBerry. Maybe you have a six-figure job (or more) that you love and you have no reason to want more freedom—but chances are this isn’t your position. Freedom, as defined in this book, is the ability to make your own decisions and make changes as you see fit, when you see fit. Freedom comes from being your own boss, and setting your own agenda.
1.5. Flexible Hours
Do you want the ultimate in flexibility with regard to your hours? Being an entrepreneur might be exactly what the doctor ordered. Yes, you will need to work a lot to be successful—who doesn’t? We rarely hear of stories (aside from in infomercials) where an entrepreneur brags about how little work he or she did to make that half-a-million dollar business streamlined and efficient. But while you may need to put your time in, you will have flexibility in when you do so. One of my primary motivators for having my own business was my insomnia; managers weren’t happy about my odd working hours and my decision never to hold a
meeting before 9 A.M., despite knowing there was a solid chance I hadn’t gotten to sleep until 6 that same morning. So what happened after I started my own gig? I work more hours, but my hours work around me. This is a substantial difference, and in my case a medical necessity. I set my working hours and stick to them. I still don’t schedule meetings before a certain hour—only now that time is 10 A.M. This has led to less stress overall and a feeling of control over my own workload and schedule, which was and continues to be vital to me.
The type of flexibility you need will depend on your own situation. Many people are morning enthusiasts and do their most creative work then; others travel so much they forget what time zone they’re in or what time it is at all (this is my life these days). Many want the freedom to schedule their meetings, work, and appointments around their children’s plays and to work when they are most creative (2 A.M.?). You will indeed get this flexibility as an Accidental Tycoon.
1.6. Bringing Your Passions to Work
Every single day when you go to work for yourself, you will be doing what you love and, if you play your cards right, loving what you’re doing. This means that your passions don’t have to be left at home. Let’s say your passion is knitting— albeit probably not common, it is your passion nonetheless—so you decide to build your fortune around knitting (and yes, it can be done!). When you went to your 9 to 5 job, you most likely had to stop knitting unless it was your break time. In your own business, your passion is your business—or should be! Rather than leaving your passions checked at the office door, you’re taking them to work with you each day.
1.7. Pride of Ownership
Those of you who own your own home after renting for a while know what I am referring to here. Whether it’s paying off that car and owning it, paying off that college degree and owning the diploma you worked hard for, or owning your own business, there is a pride that comes with ownership that is hard to describe to those who don’t own what is most valuable to them.
If you think homeownership creates pride, imagine knowing that paying for that home does not come from income your boss gave you in exchange for hours, but from your own hard work, your ingenuity, your contributions, your dedication.
The feeling is nearly impossible to describe, but when you reach that destination, no matter the hours you put in, the sense of pride of ownership is overwhelming. I remember my first tax return at the young age of 16 that included my first Schedule C for $10,000 in the computer consulting that I had done in my small business, California Computer Concepts. It was more than I had made doing anything else (like working fast food) and the feeling I got when I fixed company computers and became their hero for the day (by getting their business back up and running) was like nothing else. It was then that I got hooked on self employment.
1.8. Earning Potential
Your earning potential is perhaps the greatest reward for many people, particularly if you are underemployed or tired of working for Corporate America and taking whatever they give you—waiting for that December review to see if your pay increase will even keep up with inflation or cost of living.
With your own business, your earning potential is whatever you want it to be.
Do you want to make a million a year gross? Net? No problem. Set your own goals. You will find ways to grow your business that allow you to reach these goals and successfully manage your thriving business. You may even find your goals changing as you get into your work, adjusting downward if family time begins to take higher priority, or upward if you find yourself more into your work than you thought—or if the kids go away to college. The key is to set your sights and go for it, and then adjust if you need to. I will never forget the HAM radio club and BBS owner (I am surely dating myself here, as this was the early days of the Internet, accessed by the 300-baud modem into what was known as a Bulletin Board System) telling me one day, “You’re very bright, but don’t set your sights on a $300,000 per year job. That is tough. $100,000 is more realistic.” I’d love to see that guy again now!
Don’t let anyone tell you what is or isn’t realistic. Whatever limit you are willing to work toward is “realistic.” You may not start off with your dream salary—in fact, chances are you won’t. But with some creativity and some time, you will find ways to branch your business out to earn something equivalent to what you’re willing to put in. Some people will tell you that luck is always involved, and perhaps a little bit is, but I believe in the value of making your own luck.
What about our survey participants? For those who left Corporate America, they were asked what drove them to that decision. They were given the opportunity to select more than one reason, and their responses were …
- Flexible hours, taking the cake at a whopping 72 percent!
- Higher earning potential, at 46 percent.
- Following personal dreams, at 36 percent.
- Long-term wealth potential, at 30 percent.
- The desire to do something new, at 28 percent.
- The cost of commuting was a factor for 22 percent of respondents.
- Being a “born entrepreneur” was a factor for 22 percent.
- The time of commutes was a factor for 18 percent.
- Wanting to be at home with young children came in at 18 percent.
- Seeing an employer do a bad job in the same industry registered with a full 10 percent.
- Illness was a factor for 4 percent.
What about other responses? Some noted the difficulty in finding a satisfying job in Corporate America, underemployment, not wanting to make others rich, wanting to travel whenever they felt like it, being in control of their own destiny, job loss, and flexibility.
Do any of these sound like you?
2. Downsides to Working for Yourself
Okay, so we’ve run through a plethora of upsides to working for yourself, but the reality is that many of you may not have pursued your dreams because of the downsides, or what you perceive as the possible problems as you begin working for yourself.
These downsides shouldn’t be downplayed—they are relevant and important and probably quite valid. Chances are they are based on your own life situation and therefore they need to be addressed. Here are some of the most common things I hear, and how to overcome them.
2.1. Feeling of Instability
The first day I didn’t report to Corporate America, a feeling of sheer panic set over my body—a series of what ifs. What if my clients didn’t renew my contracts? What if I couldn’t grow my business as fast as I thought, or needed? What if I couldn’t pay my mortgage? What if …? These thoughts plagued my mind, and several times I almost thought of taking back my resignation.
The truth is, you will probably feel a sense of instability for a while—this is particularly common in the early growth stages of any new business. You need to have confidence in your idea and in yourself, and this comes from doing the homework necessary to know that your plan is viable. It also helps (although is in no way a necessity, but based on your individual situation) to have six months’ worth of liquid capital in the bank so you can pay bills for six months if you need to go back to Corporate America before trying out a new job. Another option is to switch to part time work that will give you time to start the new business and begin generating buzz and income before you quit the rat race for good.
Your own life situation will change how you react to this variable. For instance, if you have children and a hefty mortgage, you might choose the latter option; whereas if you are single, in your twenties, and can rent from a friend if things go sour, you may end up dropping everything and just going for it from day one.
Don’t let this worry keep you from your dreams. The more upfront planning you put into your business, the less likely you are to experience financial instabilities. You also need to plan your income, track your revenue and expenditures, and keep expenses low at startup. I’ll go into all of this in later chapters.
2.2. Potential for Failure
Sure, you could fail at this new business. The business could end up failing you, either due to circumstance, poor planning, lack of interest, or procrastination— or something entirely different. The market could drop out of your perfect new product or service. The world could collapse into a black hole tomorrow. But the upsides are huge, so you need to weigh them against the potential for failure.
I found the best weapon against this fear was a contingency plan; hence starting my business a few months before quitting my day job. You will find a balance that is right for you by exploring your needs versus your desires and striking that just-right equation. Remember: The more you plan, the lower your chance of failure.
Part of the fear you may feel at some point in the process isn’t necessarily fear of failure, but fear of success! Yes, you read that right. Many of us, at some point in our lives, are afraid of success. I can almost hear you asking yourself, “Who’s afraid of success, and why on Earth would they be?”
George Will once said that “the nice part about being a pessimist is that you are constantly being either proven right or pleasantly surprised.” Many people, unbeknownst to themselves, are in some ways pessimistic, especially with regard to their own success, which ultimately becomes their largest hurdle. They believe so little in themselves, and in their own abilities to achieve success, that they never see ideas through to resolution, or perhaps don’t even take that proverbial first step.
Although the work required to reach your goal may be great, success is nothing to fear and will only be achieved by those who put in the time and energy required. I’m not saying that success is guaranteed, but I can tell you without reservation that failure is guaranteed if you give up on your dreams.
2.3. Unforeseen Costs
Probably a new business owners’ worst nightmare is the unforeseen startup or other costs that drain your savings account in the first two months while you aren’t yet generating revenue. It is absolutely vital that you do your homework to know precisely the type of costs that will be required of you and to plan, at least for the first two years, for every foreseeable cost—no matter how far fetched. Later in the book I’ll give you some tools for rating the risk of an unforeseen cost, which will help you determine the probability of it occurring and therefore the probability that you will have to face the issue, and how costly it will be if you do.
Again, planning helps to mitigate this factor. If you can line up one or two contracts before you go live, it might set your mind at ease. Assuming everything will cost at least 20 percent more than you are initially estimating will cover you in case of mistakes.
2.4. Potential for Long Hours
Finally, you’ve left Corporate America—no more 80-hour work weeks! Wrong! The most successful businesses are those that are based on great, feasible ideas and those that also have great effort put into them. Very few people make it on luck and good timing; most of us put in a lot of hours to be successful. The potential for long hours is there, so you will need to ask yourself the fundamental question: “How many hours do I want to work, and if I reach that number, do I want to hire an employee or bring in a contractor to get more work done, or just limit my income potential?” Remember that you don’t have to grow your business—if you’re happy with its success and would rather work less and just maintain, that is completely your call.
When my own business ran into this issue, I found that bringing in contractors to help was a great solution—it allowed me to grow my business with my core activities while my contractors took care of routine work like faxing, letter writing, mailing, handling packages and packaging for my eBay store, and so on. Since my business was essentially four businesses, there was plenty to keep contractors busy. This also allowed me to focus my energies on my passions and not on busy work.
2.5. Lack of Vacations
This one is probably a harsh reality, too. Unless you have an Internet-based business that runs itself or unless your business grows so fast that you can hire employees to run it while you’re gone, chances are, for at least the first couple of years, you’re going to have limited vacations—or if you take them, you’ll be taking your laptop with you. I personally believe this is a fact of being an entrepreneur and one it is best just to accustom yourself to early.
Another option, if your business doesn’t require you, is to hire contractors and let them run your business while you’re gone—but much like new parents who keep calling home to check in with the sitter, you’ll likely be constantly checking in with whoever is babysitting your business.
Still, I have found that no real vacation in over five years is taking its toll on my mental health; in my sixth year I have vowed to make myself let my contractors do my business for a week and leave for seven days that I am sure will fly right by.
2.6. Difficulty Building Your Business
Difficulty building your business is definitely something you should be concerned with. It isn’t easy to get those first contracts, and then turn the first few into many—and then those many into enough to pay the bills and grow your business.
As you develop your plan, though, you will also develop a strategy for handling this problem; you will find checks and balances to validate your progress and let you make adjustments before things become crucial or life altering. In this book we will work through strategies for building your business and your brand early, and then we will look at how to springboard quickly off that effort.
2.7. Work/Life Barriers
Ah, the lovely sound of children crying while you’re on a conference call. Work/ life barriers, particularly if your office is home-based (which it might be, at least for a while), is not an easy thing to handle.
So what do you do to overcome this? Set clear boundaries. In fact, this is so important that I will cover it in an entire section within the book. Managing work/life balance and making certain your office is nothing more than that—an office—is crucial to your success, and your sanity.
Contrarily, on the home front, you need to find a way to shut out work when it’s always waiting for you in the room down the hall, yet not become complacent taking two hours each morning to water the plants and trim the grass before working. I’ll offer you many tips throughout this book on how to balance your work and life at home, making sure work gets done—but not too much! Many of us still struggle with this and, after substantial growth, we have had to get offices outside the home to handle this conflict.
Source: Babb Danielle (2009), The Accidental Startup: How to Realize Your True Potential by Becoming Your Own Boss. Alpha.