Chicago is one of the best cities for self-employed individuals and entrepreneurs. Going off on my own almost four years ago now, I’ve had the chance to get to know the city in a different way. It became my office playground like many other people who are in similar career paths and work environments. I’ve explored different neighborhoods and found a few favorite spots to return to and a few spots that are better for casual coffees with friends. For a productive day “out of the office,” I learned quick that cafes and coffee shops with a strong internet connection are vital. It’s also a perk if they offer real food and not just snacks or pastries as well as plenty of outlets. To meet with colleagues or clients, it’s important to find spots with a lower noise level or at least moderate so you can have a conversation without screaming. Some of the best spots are tucked away in the neighborhoods of Chicago and others are right in the heart of downtown. All it takes is a little exploration to find the right ones!Read More
Monday we talked about deciding whether you should be self employed and how to determine if it's the right decision for you. Today is all about what happens once you take the jump and make a new career for yourself. This is the point I am at now and there is so much to learn that I never even thought about before. I'm sure many people who have entered self employment have been in the same situation. Now what? Before now, you had employers take taxes out of your paycheck for you. There were lawyers that took care of contracts and any important client relations. Expenses? Those were simple forms that you got checks back for every other week. All of this is now your responsibility and not only do you need to plan for it, you also need to budget for it. Hello reality,goodbye la vie en rose.
Where should we start? How about money. I am in no way an accountant or financial professional so don't ask me for budget advice or anything like that. My first piece of general advice would be to invest in an accountant. Unless finance is your trade, you should really have an accountant to deal with taxes, bank accounts and the whole financial mess. I go to my accountant first for everything. Get one you trust and who understands your business because the only one who will regret bad financial decisions whether you make them or not is you. Don't put yourself in that position. Next step, get a lawyer. I'm currently working on this. You will not need them often but you should have someone who knows what your business is at the ready in case something legal should ever come up. They will most likely only handle your contracts but preparation is always key. If law isn't your trade, it's aways in your best interest to have a professional draft contract templates for you and look over any contracts you need to sign. You are now a business owner. You need to protect yourself and your business.
Being your own boss has its perks but there are a lot of things you need to stay stay on top of or risk trouble. Taxes: I've been told several times to put aside 30% of paychecks and invoices aside for taxes. Consult a professional for a more exact estimate. Expenses: you need to keep all business and personal expenses separately and you need to document every single one. Income: you need to document all of it. You do not want to deal with the IRS because you forgot to include that invoice for a one time project. It all counts.
Clients. Remember when your boss used to take the heat when clients weren't happy? Remember when the company negotiated rates? Well, those days are gone and all, I mean all, the client management is now your responsibility. The good, the bad and the ugly. You need to determine your rates. How much is your time and expertise worth? What are the expenses you will incur to complete the project? Are you charging hourly or on a project basis? All these questions and more are important and you need to answer them. Charging is one of the hardest things for me personally and I know many people who say the same. How much is too much? You don't want to undercut yourself but you also don't want to to be greedy. All of those hard questions and daily inner debates are going to be your responsibility now and you're going to have to deal with it because this is your livelihood now.
Self-discipline. So you got all the above figured out and under control. Great! Now you have to keep up with your responsibilities, manage client expectattions, handle deadlines, last minute projects, and anything else without anyone really holding you accountable. Sure, a client might ask where something is ahead of schedule but you need to manage your time and workload to have everything done in a timely manner and always on schedule. Your name alone is on the line. You screw up, that's on you. Losing a client when you're self employed is different than losing a client at a company you work for. Your paycheck takes a cut and your reputation has the potential to be at stake. Sometimes relationships with clients don't work out and that's fine but you do not want to lose a client because you couldn't handle your responsibilities. You need to set work hours. You need to be responsive on emails and be accessible within reason.
On the other hand, you also need to set expectations. You can't let clients walk all over you. For example, I am accessible for the most part from 9-5 Monday through Friday unless in a meeting, on a phone call or unavailable for a reason I notified them about in advance. I will usually answer within an hour, if not sooner. However, at night and and on weekends I am "off duty" unless there is something important going on that I have been planning for in advance. If I see a email, I say that I will respond Monday morning. If you get into a habit of being available for anything 24/7, you set yourself up for disaster because you won't always be available and more importantly, you shouldn't always be available. End of story. Establish those boundaries early and stick to them. You know what's important and if it can wait till morning or Monday, let it wait. Unless you're in medicine, it's probably not going to be life or death. If it is, I doubt you're self employed.
Being your own boss can be the best decision you ever make and nothing should keep you from following that path. There are realities to it though and you can't ignore them. I've been fortunate enough to be surrounded by great people who can point me in the right direction but not everyone has that. Owning a business is a big deal and you need to get your priorities straight otherwise you might just be setting yourself up to fail. What's the point of going through the trouble if you're not going to do it the right way? Chances of of a lifetime don't come often so don't take advantage of one when it comes around.
Miss Part 1? Make sure you check it out. I also included several links to great articles on self-employment and being your own boss in part 1.
Becoming an entrepreneur is much more common today than it was twenty years ago. It's much more common than it was even ten years ago. With an economy that hasn't been exactly steady, low salaries and corporate lifestyles being a thing of the past, people are freelancing or starting their own businesses at increasing rates. I am one of those people. Corporate wasn't meant for me just like it isn't meant for lots of other people and that's completely fine. There are a lot of jobs and employment opportunities between corporate and self-employed though. You can work in-house, non-profit, for small businesses. There are plenty of options but for me, self-employment was it. However, I'm now learning (several months later) the hardships of being your own boss.
Before getting into the nitty gritty of actually being self-employed, let's talk about qualities you need in order to be your own boss. The job has its perks, I won't deny it, but it's not as easy as everyone (even me) assumes. Most resources say that to be self-employed you have to be a go-getter, great networker, positive, hard working and adaptable and have self-discipline and vision. From my personal experience, I agree. But I can also say that sometimes it's hard to embody every single one of those qualities. So as with anything in life, I honestly feel having a good balance of each of them regularly is key. You're not always going to be positive about the work you're doing. You will scream and you will put your head in your hands wondering, why did I think I could make this work. But then the next day you'll accomplish something that seemed impossible, your client will love it and you'll forget about the messy bits. Great networking is also key. It's one of the most important things you need to succeed at if you are going to be your own boss, in my opinion. Self-discipline is equally important. If you can't keep yourself in line, if you're not a self-starter and if you cannot manage your responsibilities, you have no business being self-employed. If you need to be managed in order to be productive, chances are you won't make it when you need to handle things yourself. There's no one to hold you accountable but yourself.
Being self-employed seems like the dream. I can't tell you how many times I've had people say to me, "It must be nice being able to wake up whenever you want." "How stressed can you be? You work at home." "Why are you tired? You don't have to be in the office at 9am every morning." News Flash! Studies show that people who are self-employed and/or work from home work longer hours than people in regular 9-5 jobs. I will admit, I'm not a morning person so I'm not up working at 6am but I am at my desk between 8am and 9am every. single. morning. However, I work well into the evening, sometimes till 1am. I know several people who are self-employed and do the same. In fact, I don't know any people who work for themselves and work at a limited amount of hours. So if you have a friend that is their own boss, do not ever ask them why they're so tired. Do not ever question their stress levels. That's a sure way to encourage a freak out. Another misconception: "You seriously don't know what it's like to have people constantly demanding stuff of you." HA! Just because someone is self-employed does not mean they aren't answering to other people. We have clients just like you and they need things, sometimes last-minute, within the hour and yesterday. The difference? Unlike people who work in companies, there are no "underlings" to pass the work down to when things are crazy. We do it ourselves. In other words, making the impossible happen is a daily feat.
I'm not trying to put those who are self-employed on a pedestal because every job, no matter where the job is, has it's ups, downs, challenges and successes. However being self-employed takes, as TheSelfEmployed.com puts it, tenacity. I truly believe that comes with passion. Whereas my friend in corporate America might hate her job so everything seems like the end of the world, I love my job. So every challenge is just another opportunity for me to succeed and show what I'm made of. It's all about state of mind. It's not can you do it because you CAN. It's about do you want to do it. Do you care about the work you're doing? Does it mean something to you? That's why I left to become self-employed. My work had lost it's meaning and I was sick of doing something I hated. I wanted to feel passion again. The people who feel rewarded from their work are the ones who are living the dream. The fact is that it's going to take a lot of work to get there. Are you willing to get that work done?
Come back on Wednesday for part 2! We're moving on from whether you should be self-employed to what you need to expect once you are. Hello, taxes, goodbye, sanity...
I did some research on how to tell if you're ready to be self-employed and if you're cut out for being your own boss. Forbes and Entrepreneur are great resources for those in small business but there are plenty of other resources out there. Here are some of my personal favorite reads:
7 Signs You're Ready To Be Your Own Boss - Inc. 10 Pitfalls of Being Your Own Boss - Entrepreneur The 4 Ways To Become Your Own Boss. Which One Fits You? - Forbes Why You Should Be Your Own Boss: 10 Reasons You Should Work For Yourself - Elite Daily The Ugly Truth About Being Your Own Boss - Huffington Post 5 Traits Of A Successful Entrepreneur - The Self-Employed