someone who had an urge just like yours, who has gone through it already.
Why Listen to Me?
Why should you listen to me? Well, first of all, I am 48 years old and have been self-employed for nearly two decades. I am not some hotshot kid, fresh from school, with ideas about what being self-employed is like. I have lived it.
I have struggled through growing my own business from scratch. I did not buy a business from someone else.
My business happens to be a service business. It started out as an accounting practice and has expanded into a financial services business. The advantage to this type of work is that I get to see hundreds of other businesses come and go — as clients. Some of them have been successful, and others are no longer in existence. This experience has allowed me to learn in two ways:
• The hard way — by making my own mistakes
• The easy way — by learning from other people’s mistakes
The Self-Employment Alternative
I am not going to say that being your own boss is perfect — it most definitely is not — but there are more than a few reasons why I love it:
• Flexibility and variety. You are in control — you can decide what type of business you want to get into, how many hours you’ll work, and when you’ll put in those hours. The time before you start your business is a key point in your life because you have the power to decide what you would like to spend the rest of your working days doing. It doesn’t necessarily have to be what you are doing now. There are many success stories involving people who started businesses totally unrelated to the work they had been doing to that point: an engineer who started a lawn-and-garden maintenance business, for example, or an executive who opened a hair-salon franchise, a lawyer who set up a daycare business, or an insurance agent who established a bed-and-breakfast.
Even if you like what you currently do for a living, being self-employed in the same field can free you from the shackles of reporting to a boss. There is no one telling you that you will write a report on subject A and that the conclusion should be X. That’s probably what I like best — the variety of work and the fact that I can come to my own unbiased conclusions.
You are also free to change the focus of your business along the way. For example, I started off in my business as an accountant, but I do much less accounting work than I used to because I find writing and speaking on small business and other financial matters more rewarding.
• Work less, make more. Okay, I admit I like this as much as the flexibility. Let’s look at Lindsay Lawyer’s case as an example. If she were self-employed and billed less than the $250 per hour she does now, say $195 per hour, she’d only have to work 641 hours to bill what she is earning now — $125,000.
Of course, if she were self-employed, she’d have costs associated with running her own practice. She’d need a computer, software, office supplies, and an office, among other things. Let’s say she works out of her home and keeps her first-year costs to $30,000. She’d need to bill clients $155,000 to be left with $125,000 profit. How many hours would she have to bill at her hourly rate of $195? Only 795. So she’d be able to work 1,205 hours less than the 2,000 she is now doing to earn her current salary. That’s an amazing 60 percent reduction in the hours she’d need to put in.
That’s oversimplifying things a bit — she’d need to find clients first, for one thing — but I think you get the idea. (By the way, we’ll look at how to attract clients in Chapter 4.)
• Time off. When you are self-employed, you have a large degree of control over when you work. If you are a consultant and do your best work late at night, you can take the mornings off. If your five-year-old is performing in a play on Friday afternoon, you can take the time off and finish your work on the weekend.
This is especially important for me. My wife and I have a nine-year-old daughter, Cassidy, and a 13-year-old son, Kyle. It’s important for me to spend time with my kids before they are too old to want their old man around.
I have many special memories of seeing my kids grow up. When Kyle was in second grade, he went with his class on his first ski trip, and I was able to accompany them. Kyle was just learning to ski and had problems negotiating a T-bar (who didn’t at first?). I’ll never forget the sight of his gym teacher, Mr. Thompson, running up the hill by his side to make sure he got to the top safely. How do you put a price tag on that memory? You can’t. Sometimes the benefits of self-employment can’t be measured.
Do You Have the Entrepreneurial Itch?
I define the entrepreneurial itch as that basic urge to start your own business and be your own boss. Most people have the “itch” to some degree. Those who feel it the most are probably thinking seriously about venturing out on their own already. The fact that you have purchased this book puts you in this category.
The person with an average itch may have thought of the possibility of operating his or her own business, but for various reasons (i.e., financial pressures, fear of failure, etc.) will probably never pursue it. Those with a low-level itch do not spend much time thinking about being an entrepreneur.
If you have a strong itch, do yourself a favor: start spending time on it. The sad truth is that many people never get around to scratching their itch … until it’s too late.
How This Book Will Help Scratch Your Itch
This is not a how-to guide. It won’t detail the regulatory and tax rules for starting and running a business. There are already many books available that fill this need. (Self-Counsel Press offers Starting a Successful Business in Canada, by Jack D. James.)
This is also not a book full of theory, written by someone who has studied self-employment but has never actually been self-employed. As far as I’m concerned, those theories are for textbooks, and a lot of them are wrong. What sounds good on paper often doesn’t work in real life.
Instead, this book tells a story about what starting and running a small business is really like, warts and all.
I hope that by the end of this book you will be inspired to venture out on your own, armed with the knowledge you’ll need to make your business a success. I want to do all that I can to protect the entrepreneurial flame that is burning in your heart right now.
I want you to protect that flame so it doesn’t get blown out by bosses and other negative people who don’t see your vision or your value. In short, I want to help you succeed on your own terms and in the long run. I want to get you out of where you are now and into a lifestyle that is flexible and rewarding, much like your dream at this very moment.
2
What Does It Take to Succeed?
Before you invest a lot of time, effort, and money in starting your own small business, you’d be wise to think about whether you have the ability to be an entrepreneur. There are certain attributes shared by successful entrepreneurs, and you should consider whether or not you have them (or can develop them) so you can gauge how well you might fit into this world.
