Working for yourself sounds like a dream, if you're tired of your same old grind, but it also involves a lot of work and a fair amount of financial risk.
You might not have a "boss", but there'll always be customers (and they're always "right"). You're not chained to a desk necessarily, but you're always working a little harder to stay relevant than a full-time employee.
You pay more taxes. You have fewer resources and you pay for them out of pocket most of the time. There are many reasons to work for yourself, and equally as many reasons to avoid self-employment.
Only you'll know the right answer for your situation but, since I've been on both sides a number of times, I'll share my own thought process for your consideration.
For a bit of background, I suddenly had the opportunity to go into business for myself again when the startup where I worked pivoted to start developing new technology. Since it won't be ready to go to market again for some time, mass-marketing of any kind would be premature.
They still have basic needs, but aren't looking to grow their marketing team any time soon, which gave me the opportunity to take them on as a client and then open my doors for business, so to speak. Evaluating that decision, and how this opportunity will affect my life, is what this post is all about.
Let's consider all the many reasons that working for yourself could be a positive change in your life...
Reasons Why You Should Work For Yourself
This is the aspect of self-employment that gets people most excited initially. Working for yourself means no one tells you what to do, right? Or when to work, how to spend your time, etc. Except all your clients, of course.
While self-employment does grant you a great deal of autonomy, your day-to-day reality will look very similar to working for any company. You still have to make ends meet, and now you can be fired for any reason at all, so this freedom comes at a cost.
Still, there is nothing quite as empowering being your own boss. As long as you're willing to endure the consequences, you have the ultimate say about how your time is spent, how hard you're willing to work, and when this work will happen.
And this freedom feels good.
If you're ever been involved in a project where your ideas were ignored or your contributions were under-appreciated, then you understand how difficult it is to be motivated when you've got no control, or influence, over the outcome.
I've spent literally hundreds of hours -maybe thousands- in soul-crushing meetings where I knew my ideas would never be put into action. It's not a good feeling.
By putting yourself in the driver's seat, you, for better or worse, are in control of the recommendations you make to your clients. This sets the tone for the type of work you do and how much impact it has. No more being ignored!
Need to clock out early to go pick up the kids? Feel like taking a day to get your life in order? Maybe you feel like taking a day "just because"...
These are all things you can easily decide to do when you work for yourself. As an employee, you're always forced to put your employer first -the best part of your day, the best years of your life, and so on...
If you struggle to sit at a desk for eight hours a day and hate the monotony of days that all look alike, then flexibility is one of the most important benefits of solo entrepreneurship to consider.
In this increasingly digital age, it's easier than ever to work remote and, thanks to COVID-19, more companies are embracing remote workers and freelancers/contractors than ever before.
This presents the possibility of working from nearly anywhere in the world (that has wifi), which means that you can also live almost anywhere you want and still have a lucrative and rewarding career.
Selling your services remotely can present more of a challenge, if you're accustomed to doing business face-to-face. But these are skills that can be learned and, let's face it, things won't be going back to the way they were before any time soon anyway.
If this year has taught us anything, it should be to take nothing for granted. When the global toilet paper supply is rendered unstable overnight, it's safe to say that anything can happen.
Resilience is defined as "the capacity to recover quickly from difficulties" which often translates into agility -or, more to be more specific, into optionality. The more options you have for how to solve a problem, the more likely you are to find a resolution.
Working for yourself typically means serving more than one master (client), thereby diversifying your income streams and increasing optionality -and therefore resiliency.
You can also offer a variety of products and services; another form of diversification that may be very useful in the financially volatile times ahead of us.
This doesn't apply in every case, or maybe not even in most, but some folks stand to earn substantially more money working for themselves because they possess certain skills or experience that are in-demand.
Either way, it's worth considering how your business model scales and how you might be able to sell the same work to multiple clients.
Most hourly labor won't fit this description but, for example, research you do for one customer may be applicable to another in a similar niche.
I used to write code for a living and I made a habit of building reusable libraries so that I solve common problems once and reuse my solutions with subsequent clients.
Profitability in a solo-entrepreneurial venture is NOT dependent on how hard you work. It takes thinking ahead and working smarter, not harder, but there are many ways to do work once and bill multiple clients for the same time.
There's nothing better than getting to do what you love every day. Some days will be better than others, as is the way with life in general, but when you follow your passion, even the difficult days can be rewarding.
Hobbies aren't passions; nothing ruins a fun hobby faster than making it your job. There's a difference between something you enjoy doing for fun and work you could do dawn-to-dusk, day after day, without tiring of the labor.
If you love what you do then self-employment may offer you the opportunity to throw yourself into your work without making yourself undervalued in the process. Being passionate about a job is ok, but it's going to benefit others far more than you.
Being passionate about your business, on the other hand, may propel you to unanticipated heights of success.
Reasons Why You Shouldn't Work For Yourself
There are few types of employment that come with greater financial risk than self-employment. It's the nature of the beast...
When you have a job, there's at least a modicum of stability because firing, or laying off, employees has legal implications. On your own however, outside of an ironclad contract (a unicorn, in real life), there's nothing to stop your clients from discontinuing their relationship with you.
There's no guarantee you'll be able to secure enough work to generate the income you need either. Selling is challenging work at the best of times, and these aren't those times.
It's not entirely up to you, in the end. Market dynamics, seasonality, and many other factors can exert influence over your ability to generate revenue.
Still, where there is risk, there is often reward. Make sure you stand to gain as big as you stand to lose, when you're at risk, and it usually works out in the end. Cleverness goes a long way here...
A big part of the financial risk in self-employment stems from market dynamics beyond your immediate control. The economy, big changes in your industry, and other forms of systemic change cause large-scale instability that will occasionally trickle down to affect your ability to earn.
As a solo entrepreneur, you're a tiny boat on the big ocean that is the global marketplace. Your little dingy can be capsized quickly if you're rowing across troubled waters at the wrong time...
You can insulate yourself somewhat by diversifying your offerings and spreading your revenue over more clients; but instability will always be something you'll have to contend with as an entrepreneur.
There are plenty of motivational writers and speakers that make their living disagreeing with my views on this issue, but -from personal experience- if you're not extremely motivated to succeed at the outset, you're never going to be...
Motivation is most derived from either passion or fear. Fear is poison to professional success and should be avoided superstitiously. Passion, on the other hand, is a force multiplier for productivity and an attractor for success.
Passion gets people to listen to you, to follow you -to trust you. It's what inevitably gives people the confidence to spend their money with you. Passion is a prerequisite for success as an entrepreneur.
If you can't get excited about getting out of bed in the morning and rolling your proverbially rock to the top of the hill every day (an allusion to the myth of Sisyphus) then you're not going to survive the cold hard realities of running your own business. Full stop.
A traditional job might have a few different functions but you're most often hired to do a specific set of activities that you possess the requisite skills and experience to accomplish. Not so with entrepreneurialism...
As a solo entrepreneur, in particular, you are your own end-to-end business management solution. You find the work, pitch the prospects, close the deals, execute the work, chase down payment (getting paid requires constant vigilance), and are solely accountable for the outcomes.
Clients range from good to very, very bad; the worst of them will cheat, gaslight, and emotionally abuse you. The challenge of navigating office politics at a traditional job pales in comparison to the effort required to manage the complexities of multiple client personalities and relationship dynamics.
If you love what you do for work, you may not enjoy the constant distraction of those other demands on your time, such as selling, accounting, and client communication, for example.
Working for yourself means that you're almost never able to completely tune everything out so you can focus on a particular task. Emails or calls from clients may come at any time. Opportunities to sell can never be wasted. You'll always need to be weighing priorities and evaluating how you're spending your time.
If you want to focus 100% on your craft, rather than leveraging your skillset as a way to build a business, you may be better suited in an established company than as a solo-entrepreneur.
Not everyone enjoys being in the spotlight...sometimes it's the limelight and sometimes it's more like an interrogation -with you sweating in the hot seat.
Accountability exists at all levels of employment, and in all forms, but when you're operating on your own you take all the blame for the bad (and rarely much of the credit for the good).
In my experience, this either bothers you or it doesn't. If it stresses you out to be scrutinized on the basis of your value return (i.e. "what have you done for me lately"), then this isn't the life for you.
As a solo entrepreneur, you're typically operating in a vacuum, potentially coordinating with internal teams, but getting little to no social interaction as part of your day-to-day outside of calls and emails.
This never bothered me much, but it's toxic to the types of people who thrive in social environments. Extroverts, especially, struggle with the seclusion of working separate from other humans, but this can also be an issue for introverts that rely on group brainstorming, or external stimuli, for inspiration and feedback.
If it's not for you, it's not for you. Not every role lends itself to solo-entrepreneurialism, and not every person feels comfortable in perpetual isolation.
A Few Considerations For Getting Started
If you decide to take the plunge and start working for yourself, as I've just recently done (and done a few times before); I applaud your boldness and wish you abundant success!
I also recommend you consider a few points as you prepare yourself for this journey...
Get Your Mind Right / Get Excited
Going back to my prior points about the importance of passion and motivation, it's essential that you get excited about this transition -and all its messy imperfections.
Dread and procrastination will kill your chances of success faster than hand sanitizer kills 99% of bacteria. Keep these demons at bay at all costs.
Protect against their siren song by psyching yourself up with positive affirmations, gamification, and actively celebrating your future success occasionally (dinner "out", fancy bottle of your favorite whatever, etc.).
Don't Rush, It's A Marathon Not A Sprint
Take your time preparing to launch your business. I don't mean with all the legal stuff; you can operate under your name and SSN in most circumstances.
I'm referring to doing the mental work of becoming very, very clear on what you offer, to whom, and for how much.
Too many entrepreneurs are eager to offer their services and skip the essential process of finding their niche, crafting a (personal) brand, and developing a go-to-market strategy.
Take your time, educate yourself in the areas in which you aren't an expert -and copy liberally from others who are experts in those matters.
Write A Business Plan
Create a business plan, entirely for your own benefit, to help you think through all the aspects of growing your business in advance. You can find business plan templates very easily online -read a few blog posts on the subject and then start building your own. Strive for comprehensiveness, not perfection, this is only a thought exercise.
Think through your mission (why you do what you do), your unique value proposition, who your customers will be, how you will reach them, convince them, and convert them.
Detail your potential expenses and revenue streams; figure out how much profit you can make and imagine future scenarios where you could increase that margin.
Write a convincing narrative for how you will achieve your goals (self-sufficiency and profitability, at a minimum) and demonstrate (mostly to yourself) that you have worked through every challenge you can anticipate.
Build A Revenue Model
Your success or failure in business often depends on your ability to accurately represent your revenue model in a spreadsheet. Think of it this way, if you can't show how you're going to be profitable "on paper", you'll never achieve it in the real world.
That's because the real world always throws you a curveball. You need to demonstrate how you'll generate revenues in excess of what you require, so that when that curveball comes, you can swing and miss but still make ends meet.
A revenue model is, in the simplest terms, all your costs versus your anticipated revenues (in very specific detail), the resulting profit, and how you'll reinvest or extract it (pay yourself) from your business.
My approach is to create a "spreadsheet calculator" which lists the services I'm offering, the hours they typically require, multiplied by an hourly rate, less hard costs, and conveniently sums these into totals so I can see the resulting revenue and profit margin. Then I play with the numbers and watch the effect it has on my financial outcome.
I've found this essential to understanding how my business works and what "levers to pull" to increase profitability, and thus my income.
How To Get Your First Client
Your first client is rarely someone you don't already know. In my case, I've been able to leave two jobs and take those companies on as clients. This provided stable ground in which to grow without fear of going broke in the meantime.
Obviously this was a unique situation (twice), but I mention it to demonstrate how thinking outside the box can help you find that first client quickly -from people you already know.
This is key. Marketing yourself is extremely difficult if you can't provide examples of your work for other clients. When you first start, you have no portfolio, no testimonials, no reviews...nada.
No one is going to pay to work with you if you can't prove your value in advance. The best (and easiest) way to do that is with customer testimonials and case studies; which means that you need at least one client before you can get other clients.
Be willing to work for free to get your first client. After that always try to get paid something, but initially, do whatever you need to do to have that first bit of positive social proof.
Who do you know? Who do they know? Dig deep, be aggressive. The first one is hard. The second one is hard too usually, but when you can start replicate your successes, the process starts to get easier.
How To Get Your Next Client
For most of us -and I hate to say this- our LinkedIn networks are the very best place to start looking for potential clients, or people that would be willing to refer you to their networks.
Do a great job for your first client...and document it.
Then package this into attractive, easy to consume, sales and marketing materials (PDFs, landing pages, etc) and start reaching out to the people in your LinkedIn network that might need your services.
Be humble, but not self-derogatory. Pleasant, but direct. Let them know that you've made a transition that you're excited about and if they, or anyone they know, is ever in need of services you provide (insert link to your PDF or landing page) to please keep you in mind.
Hit up enough of your network with a thoughtful message, and links to your marketing materials, and you're bound to get a response at some point.
These things take time so have a plan for how to grow your visibility, and your network, in the meantime. Make snackable content demonstrating your expertise and share it on LinkedIn. Look for speaking opportunities (over Zoom these days), offer free consultations, and produce thought leadership content.
The point is to get your name in front of as many eyes as possible -some you already know and some you don't. Be loud. Be excited. Get noticed.
When you do generate new business, repeat the "do a great job and document it" approach. Rinse and repeat; until your business is growing faster than you can manage.