Saturday, November 24, 2018

Before You Become Self Employed

If any of you have read or listened to the teachings of Robert Kiyosaki, you will surely agree that he is a huge proponent of self employment. He declares that owning your own business is key in gaining wealth.

But today I just want to bring a few balancing thoughts to the table....before you quit your day job in a frantic rush to become self employed.

Self employed people require a certain skill set that not everyone has....and not everyone even wants the skill set that many successful self employed people retain.

What are some of these skills?

1/ The willingness and capacity to work extremely long hours without the guarantee of adequate compensation for your time.

2/ A personal life that allows for huge chunks of time dedicated to said "self employment".

3/ Many self employed people begin their self employed season of life with little to no financial safety cushion. It might become a nerve shattering, bone jarring, leap of faith into a world of risk. Are you ok with not knowing when you will receive your next paycheque? Or do you have other arrangements in place to pay the bills until your business can afford to pay you. Note... that self employment does not necessitate this kind of unpreparedness, but sometimes it does. If you are uncomfortable taking risks....think twice about self employment. Are you willing to bet 100% on yourself and your personal capacity to produce a good income for yourself and your dependents?If not....then stick with your day job until you are really really ready.

4/ Managing your own business requires an extremely high level of financial discipline. Are you good with money? Without the strictest of financial habits, your business will not be viable, and if, by some chance it becomes viable, it may not retain it's viability for more than 6 months. Will your business utilize leverage to bring it to the next level? How long could your business thrive if your account receivables were delayed payment by 60 -90 days? What would happen to your business if one of your main client accounts went bankrupt?  Businesses are connected to other entities and what affects those entities can deeply affect the success and longevity of your business.

5/ How good are you at saying no? Do you have the ability to focus 100% on your business? Focused people can sometimes be perceived as self centered or arrogant because they only have eyes for what concerns their business. But you must acknowledge that it is usually these special humans who can be singularly minded and goal orientated that accomplish great things. Focus requires a very high price to be paid in your entire lifestyle. There must be no compromise. All in. No turning back.
Are you willing to reject certain social expectations/ events to pursue your self employment goals? Do you have the character to graciously decline participating in groups or events that do not further your self employment goals? Can you handle it when people gossip about your stand-off-ish-ness and resent your total focus?

6/ Networking. If you are good at networking, you will be many hundreds of steps ahead of your competitors and can use referrals to your advantage in many departments of your self employed life.
You can be a brilliant inventor and creator, but if you can't connect with other good and ambitious folks, your hard work may never get noticed. Being self employed is not about becoming anti-social, but rather learning how to use social situations to further your goals.

7/ Self employment provides a certain kind of freedom that some folks relish. But at the same time, it requires that one is able to assess their own weak points in terms of what is required to make/keep their company successful. Do you know what your weak points are? Are you willing to learn from experts to compensate for these weak areas? Are you willing to read books, magazines, newspapers,websites etc and contact experts/professionals when you face questions that you are unable to resolve ? Are you willing to listen to audio books that build your knowledge base? Are you willing to attend seminars or three day events to build mastery in your chosen field?
Do you have the humility to work with or hire those who know more than you do? Where does continuing education fit in with your business plan? Even if you never utilize formal educational institutions, you must be always teachable....always willing to learn. Self led learning is key to continuing your learning trajectory. Pick good mentors who can help propel you forward.

8/ How high are your accounting/bookkeeping skills? Do you need to hire reliable help? Keeping accurate books is key, as well as having timely financial reports so that you can make appropriate spending/saving/investing decisions for your company.

9/ Each business has it's own's own hum. Are you good at sensing when it's time to
rush and conquer new territory or when it's time for a short break? Do you have enough
financial wiggle room to finance your operations if you or your dependents catch an illness/ injury?
Pace yourself....but always move forward.

10/ Do you have a legal team that you can utilize to protect yourself, your family and your employees from liability? Does your business have the right structure? What kind of insurances do you need and when?

11/ My last point is this. Do you know what your exit strategy is? Do you want to build the company to a certain size and then sell it? Or is your company more of a "pop up shop" that will thrive for a short time before being shut down so you can pursue something else. There is no right or wrong answer in terms of exit strategies. These are only choices. Choices that you will need to make at some point or another in your self employed journey.

Well, that's all for now folks. Thanks for your time. It isn't hard to find many books that advise us what we "should" do in certain periods of our lives. But that is easy for anyone to do. What is good and sometimes more difficult is to take a step back and think first, before leaping into something for which we may not be prepared.

 Be blessed. Be courageous.Be productive. Be prepared.