Next to owning your own home, owning your own business has got to be the one thing most people aspire to. Both are underpinned by that sense of freedom, of not being controlled by others, that is at the heart of our very own identity.
Being in control of your time, your effort, and, hopefully, your income are very powerful driving forces. There is something about being self-employed that appeals to the vast majority of us, even though to most, it will sadly remain a dream.
Let’s explore the notion of being self-employed. What does it actually mean and what, if any are the characteristics of the self-employed?
This is usually the first jump on the entrepreneurial ladder and for most, it’s the only jump. In fact, most entrepreneurs never seem to get past this level of growth in their business.
The truth is you really can’t call it a business; you’ve really got to call it a job.
What’s more, this job is most probably one of the worst jobs in the world. I think its put best by his quote, taken from one of my live seminars: “Most people thought they worked for an idiot before they started their own business.”
I really don’t think most people who start their own businesses know what they’re getting themselves into. In fact, most look at it as something glamorous, exciting, and with such a sense of newfound freedom they’re fooled into believing wealth is just a few days, weeks, or months away.
To become self-employed, what usually happens is one of two things.
Either you’re unemployed and looking for a new job when one morning you have what I call a Blinding Flash of the Obvious.
“I know,” you say, “I’ll start my own business. Then no one will ever be able to fire me.”
And with all of the planning of the team that built and sailed the Titanic, you get started.
Or you’re working for someone else and you keep thinking these three things to yourself:
“I can do a better job myself.”
“How come they get all the money, when I do all the work?” and,
“If I owned this company, I’d be the boss; I’d make everyone else do the work; I’d play golf, relax, and I’d work a lot less.”
Either way, there is one thing running through the minds of everyone as they jump into the role of the self-employed entrepreneur:
“I m going to be the boss”
And with that the race starts.
It’s one of the biggest steps you’ll ever take, and believe me, the most rewarding you’ll ever choose, so if you’re about to take it, that’ great. Get ready to learn how to make it work for you.
Almost an extension of the mind–set challenges we’ve just looked at, most self–employed people’s relationships with money need to be examined.
As you may or may not know, the way you relate to money will determine your financial future. And, given you’ve only got one shot at this thing called life; let’s make sure you give it the best shot you can.
A self-employed person has a very similar relationship to money as that of an employee. And we all know that as an employee you earn money. What kind of word is earn? It’s a verb or doing word.
With the self-employed, the word changes but the doing-ness remains the same. They’re still trading time for money. And their word in relation to bringing in money is now, make.
They have to make money in their business.
The dictionary definition of “make” is: “To bring into existence, especially by effort.”
So by definition, with this relationship to money you’re still going to be working hard for every rupiah or dollar you get. You’re still trading time for money. Yes, you may be getting more money for each hour you work, but the see-saw effect of self- employment never lets you create financial freedom. More on that in a moment.
While we’re on definitions, here’s the definition for “self:” “Person’s nature, special qualities, one’s own personality.”
And the definition for “employed:” “Give work to, usually for payment.”
Once again by definition you’ve positioned yourself in a place that from a true entrepreneur’s viewpoint is not only guaranteed to mean physical involvement in your money-making activities, but also that there’s very little difference to being employed by someone else.
The only real difference is now you have the headaches of being both an employee and an employer.
Yet, I want you to remember this: becoming self-employed is the first step on the ladder of financial freedom, and those who have taken it are usually far closer to becoming financially free than those who never do.
So, congratulations if you have, and congratulations in advance if you’re about to.
Now it’s time to think through some of the reasons people have for becoming self-employed. And they must be powerful ones, considering all the uncertainty and hard work most will be putting themselves through.
So what are they?
To my mind there are at least eight very powerful reasons for being self–employed. Reasons that, simply put, are a must if you’re at all serious about getting yourself into the ranks of the rich.
Employees have absolutely no true leverage: they’re simply trading time for money. Keep this in mind.
When you’re selling for yourself, there’s no set hourly rate. You, through your skills, your level of work, and your passion or determination, are able to determine your level of income. No one else can make that decision for a self–employed person. And, while that scares some, it feels great to many who take this step.
In fact, that level of self-control promised by the “I did it my way” feeling is central to the decision most people make when becoming self-employed. While being your own boss, and the ability to determine your own hours and income, are seen as the main reasons why anyone would choose to become self- employed, they are not the reasons I would give you to make this step.
So, what are my reasons for becoming self–employed?
Reason 1 You’ll have to learn about company structure and setup. You’ll probably also need to understand the difference between a holding company and a trading company. Why you should always have two companies rather than one; one to own the assets, the other to trade and make the ongoing profits.
Reason 2 You’ll also need to learn accounting, bookkeeping, and how to interact with your accountant. You may, for the first time in your life, get yourself an accountant.
Knowing where to look for the answers to your questions about the balance sheet, the profit and loss statement, the cashflow, or any budgets you do is a must if you’re ever to aspire to bigger and better things.
Things of accounting as a background part of day-to-day business; it’s like the engine room. Without it you may as well be playing sport and not keeping score.
Reason 3 Probably the most important two things you’ll ever learn as a self-employed person (if you didn’t already as an employee) is sales and marketing.
Becoming a great salesperson is a must if you’re going to sell a lot. Sales means everything from face–to face, over the phone, cold calling, and even getting over any fear you may have of talking to people. Sales also means doing presentations to groups and selling to more than one person at a time.
It’s easy to say, but becoming great at sales requires a lot of reading, learning, and application. It may even take you a few years, if you’ve never done it before as an employee.
And marketing, well what can I say that hasn’t already been said? Together with sales, it’s the lifeblood of any business. A true entrepreneur knows that, while cost reduction is important, bringing in the cashflow is by far the most important area for any company.
You can cut costs to post a profit, but you can only sell your way to prosperity. While “sales” is the ability to turn a lead into a sale, ”marketing” is the ability to generate prospects at a reasonable price.
Reason 4 As a new business owner, you get the privilege of doing everything yourself, and one thing you really get to learn is the meaning of the words ”hard work”. You’ll often complete 16– or 20- hour days, six or seven days a week. Not because there is just so much work to do, but because you are having fun, you are learning, growing and most of all, because you’re working out how to design a business as you go along. Growing a business is like riding a bike: Once you’ve done it a few times, it gets really easy.
Think of all this extra work as your entrepreneurial apprenticeship being done after hours.
Reason 5 One of the most important lessons every new business owner learns is cost reductions. As a self–employed person, you’ll be forced to scrimp and save, to recycle, to borrow, to use old second-hand stuff and to do whatever it takes to get by.
Once again, while its most important for a company to bring in money, lack of control over your costs is a certain death knock for a small business. Learning this ”tight” way of doing business is great: you’ll need to remember it, especially as you get bigger.
Reason 6 for becoming self–employed is to simply make contacts. The more people network, the easier you’ll find it to do business – any business. Or, to put it another way, join as many networking groups as you can, go to as many seminars as you can, to not only learn, but to get yourself out there meeting other businesspeople.
In business, the old axiom of “who you know” is extremely important, so learn to meet lots of people.
Reason 7 As a self-employed person, you’ll also have to relearn the meaning of responsibility and accountability. Nowhere else is it as important to learn these virtues than as the boss of your own company. The ”buck” really does start and stop with you.
Far too often the world of the employee is littered with “pass the buck” people. When these people start or buy their own businesses, it’s almost certain that they’ll fail. Only those with the passion and desire to lead a life of total ownership will ever succeed in their own businesses.
Reason 8 The most important reason is so you at least start to learn technology. Hopefully, like many others, you learned these lessons at someone else’s expense, as an employee, but if not, prepare for a lot of learning and growth as you get your first company up and running at a profit.
Technology is here to stay and it’s a painful business life for people who decide not to make it an integral part of their knowledge base.
To finish off-while most think the reasons for becoming self-employed are to take control and to be the boss, the exact opposite is true for the serious entrepreneur.
Start your small business now, even if it’s part-time, to gain the knowledge you’ll need in a few years when you’re playing with big bucks and running your big business.
Now, before I forget –
Remember I mentioned a concept called the see-saw of the self-employed?
As a self-employed person, your business life will feel just like a see-saw. While it’s often true self-employed people can make more per hour than they ever could as an employee, the challenge comes down to how many hours are actually used in the background.
You’ll spend half your life chasing the work doing marketing, sales, and administration, and then you’ll have so much work to do you’ll have to flip over and start doing the work.
Doing the work is one side of the see-saw and sales and marketing is the other.
Chase the work, do the work, chase the work, do the work, chase the work, do the work-and so on.
It’s the see-saw that stops a self-employed person from ever really getting ahead, once again, you’re still in a situation where there’s no real leverage. You still need to do the work.
It’s also this see-saw that gets most self–employed people to make one of two decisions: to either give it up and go back and get jobs, or to take the plunge, jump in the deep ends of businesses, make the decision to grow their businesses, and to hire team members.
You see, what you should be aiming at here is to grow your business.
The first step to doing this is to think about your vision. Understand that as long as you can only ever see yourself running a one–person business, you’ll never be anything more.
You’ve got to build a vision of a big business, one that needs to be big to achieve the vision you set. Maybe your vision is to change the world, to change your industry, or to be the best in your industry. Whatever your vision, the bigger it is, the bigger your business needs to become to complete it.
Set a vision of what your business will be like when you’ve finished building it. You see, you have to plan it from the start so at some stage in the near future, your business will run without you. Plan for it from the beginning.
While we’re on change, one of the most important changes you’ll need to make is to your identity. You’ll have to stop thinking of yourself as a worker and start thinking of yourself as a business owner.
For example, you may need to stop thinking of yourself as a plumber and become the owner of a plumbing business – an entrepreneur who’s currently building a plumbing business. Or even think of yourself as a big business.
One other thing here, stop thinking of yourself or your business as being small. Calling yourself a small business is extremely limiting. You can be a growth business, a prototype business, or even think of yourself as a big business. Don’t just change your own identity; change the identity of your business as well.
I know this all seems overly simplistic, and it could even be just a mind game, but it’s by far the most important step you need to take on your way to becoming a successful business owner. Set your vision as soon as you can.
The next step you need to take is to change your goals.
Set larger goals, much larger goals. Ask for more and then be prepared to get it. There’s nothing worse than the limits you place upon yourself by setting small goals. Goals that may at the time seem a stretch in reality might just get you to work a little harder.
You see, when you set goals that are entirely massive compared with your current results, it challenges you to think entirely differently and to do things entirely differently. And that in itself is essentially what this growth process is all about.
So there you have it-a quick overview of what being self-employed is all about. Still convinced this is the route for you to take?
Erni Margiono ActionCOACH 