Self-Employment: The Hardest Way to Make Easy Money

I heard this comment at a National Speaker's Association meeting last month: "Being your own boss is the hardest way to make easy money." Boy, isn't that the truth!

So many people I speak with dream of becoming self employed and starting their own small business. Don't get me wrong: being self employed is the best lifestyle I know. It has a huge range of rewards, from flexibility to independence to self-responsibility. I'm completely in love with being self employed and wouldn't exchange it for a corporate job for a million dollars! (Okay, truthfully, if you want to offer me a million dollars a year in salary, I'm willing to entertain a discussion.)

But self employment is hard work, plain and simple. After carefully studying and working with people who start their own businesses, my best estimate is that it takes at least a year to make a serious profit, and often it's more like two years. I have yet to see a "quick fix" for small business marketing that will land a lot of cash in your pocket in 30 days.

If your business structure and administrative process are not firmly in place, you'll crash and burn eventually. If your business strategy and plan are not fine-tuned, you'll spend an extraordinary amount of time running in circles trying to find the right customer and the right product or service to sell them.

So why do people look for (and purchase) products and services that promise a quick fix to their ailing small business? In the question lays the answer: they want a quick fix to the pain. Don't we all?

Running your own small business is a marathon, not a sprint. Stop trying to sprint your way to your first million without a firm foundation under you. Remember, marathoners train all year long for just one marathon; they don't wait until the month before to begin preparing.

Things to consider:

1. Make sure you have the personality to be self employed.
2. Make sure you have enough money to finance your dreams, and a good financial plan that tells you when you'll actually start making a profit.
3. Invest money and time in sound, effective marketing strategies and do them every month, rain or shine.
4. Have a written business plan and a business strategy, even if it's only three pages long.
5. Test your marketing ideas, your product ideas and your service ideas to make sure you've got everything on target.
6. And finally, have a marathoner's attitude: the finish line does exist, just over the next hill. Believe that you will make it to the finish line, as long as you keep putting one foot in front of the other and maintain a positive attitude.

It's Okay to Think Small

In nearly every business book I read and from the lips of nearly every business guru I listen to is the premise that you have to grow your business. Grow, grow, grow -- think big -- and you'll feel successful. More products, more services, more revenue -- and you'll be happy. Bigger is better, right?

Here's a secret that I'm going to start shouting from the rooftops: there's no shame in declaring that you want to keep your business small. This push for growing our business to the next level (whatever that means) might not be the right thing for many of us.

I'm not talking about people who remain small because they're scared, or because they don't have the skills or financing to grow big. I'm talking about the people who choose to keep their business small because, after careful analysis, it's what they really want. There's an unspoken taboo about saying, "I want my business to remain small," and I want to halt that taboo.

In his book The E-Myth Revisited, Michael Gerber says that if you elect to stay small and work in your business (instead of working "on" your business by creating a system where someone can run your business for you), you have a job, not a business. I don't understand his logic and I can't see where there's something inherently wrong with wanting to stay small and do the work yourself. Most self-employed people start their own businesses because they love what they do.

Gerber's principle is that a business should be created to get more out of life. Certainly the work you do should allow you to have the lifestyle you want. But I didn't start a business just to make heaps of money; I could get a corporate executive job and do that. I started a business to provide the services and products I love, that gives me personal fulfillment and creative challenge.

If you love the work you do, there is nothing wrong with wanting to continue to be the technician, as well as take on the role of manager and entrepreneur. You've got to do all three, so don't try to avoid it. But if you're willing to take on all three roles, you can find much meaning and satisfaction in running your own business.

Staying Small

There is a new way of looking at small business that challenges the notion that all growth is desirable. In Bo Burlingham's book, Small Giants: Companies That Choose to be Great Instead of Big, he talks about small business owners who had a choice to grow their business to majestic proportions and chose instead to remain small, to perfect their business to great heights without selling their soul to the "you must grow" mantra.

There are those business owners to elect to stay small, and create a great business. I didn't create a business in order to create a franchise-able model of it where someone else did the work. I created a business to be great at what I do, offering the best service and products possible. For me, the only way to do this is to remain small, boutique, and connected intimately with my customers. This allows me to listen to their needs and create solutions quickly. It gives me a kind of independence and joy that I never found in corporate life.

Seth Godin says, "Small is the new big because small gives you the flexibility to change the business model. Small means you can tell the truth on your blog. Small means that you will outsource the boring, low-impact stuff like manufacturing and shipping and billing and packing to others, while you keep the power because you invent the remarkable."

In fact, Seth wrote a book called Small Is The New Big. Maybe I'm on to something here.

Loving What You Do

While your business can be a means to an end (a lifestyle you want, or maybe to send your kids to college), why can't your business also be enjoyable in and of itself?

If you love gardening, you don't just work "on" your garden plan, you work "in" the garden every chance you get. You don't try to figure out ways to delegate all the work just so you can sit back and get the rewards of a pretty garden. Instead you want to get your fingers in the dirt and do it yourself because the very act of working in the garden is enjoyable to you. And sometimes that means you have a smaller garden so that you can find joy and fulfillment in doing it all yourself.

Many self-employed people don't want to be an absentee owner. I don't want to lose touch with my customers or the reason I do this work. I don't want to manage employees; instead, I'd rather work with partners who love what they do. I don’t want to create a big business model that any low-skilled employee can implement just for some extra cash.

If you want to be the CEO of a big company with lots of people working for you -- go for it. But for me, I want to get my hands dirty every day. I'd rather stay focused and build a business that's small and great.

Go Look In The Mirror

Who creates your calendar and books every waking moment of your time? Who asks you to work evenings and weekends to grow your business? Who forces you to work with clients who are not really a good match, or pushes you to sell, sell, sell when you are tired or sick?

Being self employed means you are the boss. You set the agenda. Alan Weiss has written a good blog post about it here.

If you're unhappy with the way your business is going or how hard you are working, go look in the mirror. And ask yourself: Am I working hard because I have to -- or because I THINK I have to?

Sure, there are times when we have to put in that extra effort to get a project done before a deadline. But there are too many self-employed people who complain that they are working 60- and 80-hour work weeks, as if working hard (to the point of illness sometimes!) is going to get you "extra credit" points in Heaven.

StartUp Nation reports from a survey: "80% of small business owners planned to work during the holiday break. 56% said they would even interrupt holiday dinner for an important customer phone call. "

Did I hear that wrong??? You would interrupt dinner with your family to take a business call on a holiday???

The American Work Ethic tells us we have to work hard to be a good person, a good provider, a good citizen. I'm not against working hard, but if you are working hard all the time, perhaps now is the time to ask yourself, Have I taken the American Work Ethic too far? What's the point of being self-employed if my boss is a tyrant?

And the next time you are feeling overworked and overwhelmed, cancel an appointment and go for a walk or take a nap. You can't work at peak performance 24-hours a day.

(P.S. I give you permission to take next Friday off from work. I'm going to!)

Introducing My New Site!!

To all my clients, students, colleagues, friends, and family:

This is one of those "What I Did for My Summer Vacation" stories.

I took last week off from client work and teaching. I didn't get to go on a cruise or hiking in Yosemite this time. I specifically took that week off to get the Passion For Business Learning site complete.

Whew! This project has been in the works for over six months, and took 200-250 hours of work to finish. Now I know what it really takes to create classes, audio and ebook products (17 in all), and create an "education site" to house them!

I'm so proud of this site. I designed the site and course catalog myself (thanks to Annie and Angee for pitching in!). It's the culmination of a year-long dream for me, and I wanted you to have a sneak peek at it before I announce it to my mailing list:

http://www.PassionForBusinessLearning.com/

I hope you'll share in my joy and send "good energy" to the site on its birth day!

How to Choose a Virtual Assistant

For over 15 years I worked with an assistant who came to my home office and helped me with the administrative side of my business. When I moved away from the area 18 months ago, I lost her services.

I had two choices: look for another administrative assistant nearer to my new home office, or delve into the world of "virtual assistants." A virtual assistant does not come to your office. Instead he or she works from their own office and assists you via phone, internet, fax, and email.

When I looked through the list of all the tasks I wanted an assistant to perform, there was no reason why this person couldn't be located anywhere in the world. After careful research I hired an assistant who lives 2,500 miles away, and although we've never met in person, we've formed a strong foundation which helps my business run smoothly.

The Benefits of Using a Virtual Assistant

There are many benefits of using a "virtual" assistant versus bringing an assistant into your home office.

• You don't have to share your computer, or set up a second computer, for the assistant to use. A VA uses his own equipment and computers. In addition, you don't have to set up an extra desk in your office for an assistant.


• Instead of having a fixed schedule of hours each week, with a VA you only pay for the hours you use.


• You can hire a VA to work a specific numbers of hours per month on a retainer which guarantees availability. Some VAs work on a per-project or per-hour basis as well.
  You can find VAs with specific skill sets, from certified QuickBooks specialists to those with graphic, internet, marketing, or technical skills.


• VAs own their own business, so they know what it's like to be self-employed.


• A VA works as a consultant, not as an employee. Therefore, you won't have to pay employment taxes or benefits for your VA. (It's critical that you understand the government rules about employees versus sub-contractors; in the USA, check out the IRS website for the rules www.irs.gov).

Some of the Drawbacks of Hiring a VA

Not all VAs are created equal and you don't want to be paying someone to learn on the job. Some are new to the assistant industry and have a lot to learn about helping a self-employed small business owner. Some have excellent technical skills while others labor with using a computer or the internet. Some have great customer service skills while others struggle to keep in touch with you about the status of your projects. Some work part-time and are only available for limited hours per week. We'll talk further about selecting a VA below, but be aware that it's up to you to interview the VA and determine if his skills match your needs.

Some VAs are taught that they should be a "partner" with you in your business. On the surface, this sounds great. However, I have heard too many horror stories about VAs who did things without asking permission, from modifying website text to changing established class titles. Make sure you are clear about the boundaries of what your VA can do without your permission. I prefer that my VA takes the extra time to ask my permission, rather than taking it upon herself to do something that might negatively impact my business. Many self-employed people are not looking for someone to "take over" running their company; instead they want a professional who can assist them with specific tasks and projects.

When Is It Time To Hire A VA?

It's a rare entrepreneur who doesn't feel overwhelmed wearing all the hats and doing all the tasks alone. But when is the right time to hire a VA?

First, look at your task list and determine which tasks should be delegated. Don't fall into the trap of thinking, "I can do this so much faster and better, I won't delegate this task." The question isn't whether you can do a task; the question is whether you should be the one to do the task. Think how you will use all the time you free up from administrative tasks to create more income for your business.

Second, look at your budget. How much can you afford to spend? Remember to add into your budget calculations the fact that you'll be able to generate more income, and design more products and services, with the time that is freed up by hiring a VA.

• Read the rest of the article to learn how to find and select a VA, and what to expect to pay them.

Do 50 Percent of Small Businesses Really Fail?

Legend has it that 50 percent of all small businesses fail.

According to an article on MSNBC, two-thirds of small businesses make it past the two-year anniversary. However, only 44% reach their four-year anniversary. Ouch.

The news isn't all bad. Built into this model are 10 industries that seem to have the highest risk. Failure rates are not consistent across all industries. (See article for this list of 10 industries.)

According to most sources, it seems like the same things bring down a business: lack of business and marketing skill (both planning and implementation of plans), poor cash flow, and heavy debt. Factoring in the risky industries, it may be that some industries are way above that 44% survival rating, while others are drastically below it.

The Continuing Self-Employment Boom

From the National Dialogue on Entrepreneurship:

New Census Bureau figures confirm what many experts have long suspected. The US is in the midst of a major boom in self-employment.

2004 data show that 19.5 million Americans are self-employed, and their numbers are growing. Between 2003 and 2004, the number of self-employed grew by 1 million (about 4.7%). Overall, these businesses without employees account for 70% of all US businesses and generate annual receipts exceeding $887 billion.

E-Bay is clearly having an impact as electronic shopping and mail order houses are among the fastest growing sectors (up 12.7%) for new self-employment ventures. Even faster growth can be found among building finishing contractors (up 22.5%), Internet service providers (up 18.7%) and nail salons (up 14.7%).

The July 2006 U.S. Census Bureau report, Nonemployer Statistics 2004, can be accessed at: http://www.census.gov/prod/2006pubs/ns0400a01.pdf.

Are You Cut Out To Be Your Own Boss?

I had an interesting discussion this week with one of my clients. She's been in business for six months and is ready to quit. (I have permission to share her story.)

She writes,

"I give up. Starting a business is so much harder than I thought it would be, so much more time-consuming. I was hoping to be making a profit by now! There are so many things to do and I'm totally overwhelmed. People don't seem to want to buy my products and I feel totally rejected. I don't think I have the personality to be self-employed."

Hmmmm...interesting. Are there really personality traits that separate born-entrepreneurs from people who can't hack it?

I'd say yes. I've been self-employed in one way or another since 1981. I've known many self-employed people, and have been coaching and consulting them for years. And over the past 25 years, I see a pattern in successful entrepreneurs versus those who pack up and exit their business.

Here's my must-have list of personality traits for the successfully self-employed (in no particular order):

1. Tenacity.

2. Self-worth.

3. Humor.

4. Willingness to do the dirty work (the tasks that you hate to do).

5. Willingness to learn new skills.

6. A deep desire to be independent.

7. Willingness to take acceptable and calculated risk.

8. An ability to deal well with people.

9. A passion for what you do or sell.

10. Resourceful and creative.

11. Willingness to ask for help.

12. Self-disciplined.

13. Self-motivating.

14. Willing to do the personality "foundational work" to help yourself and your business.

Notice that I didn't list any business skills here. You can always learn the business skills you need, or hire someone to do the work for you who does have the business skills you lack. This list is about who you are and what habits you have. Changing your basic personality style will take effort. That's why #14 is so important: are you willing to do the groundwork, the personality foundational work, to set the stage for your success?

Naturally, there are some personality traits that are business killers, but that's another blog entry! :)