It’s been over seven years since I worked my last day as a permanent employee, packing up my belongings, giving back my keys, and walking into the unknown world of self-employment.
In the UK over 20% of companies fail in their first year, and around 60% will fail during their first three years. Reading about the potential pitfalls of going it alone, it’s a wonder any small businesses survive.
I’ve made a few discoveries this year, things I wish I’d read about earlier on. Here’s my advice for keeping your head above water and holding on to your sanity, which I hope might be helpful if you’re just starting out on your own.
Having sole responsibility for developing a business, sorting out technology and website stuff, finances, marketing, social media – and the rest – can be overwhelming.
Whether you’re opening a bricks-and-mortar business, or offering a service or consultancy, you don’t have to do everything on your own. Even on a tiny budget, you can get help.
On my first day as a self-employed person in 2014, I went to a networking event. I had to give a one-minute presentation on my business. I obviously didn’t have a business on day one, but I set out my intentions and met a group of inspirational entrepreneurs, some of whom I’m still in contact with.
During that first year, when I didn’t have the money to pay suppliers, I bartered – trading my services in return for theirs. I went to all sorts of events, coffee mornings and talks, introduced myself to entrepreneurs and built my network.
Networking groups can be expensive, so free services like Meetup and local business groups on Facebook are a good place to start.
Although there is no substitute for meeting people face to face, online networking is essential these days. Using platforms such as LinkedIn is a crucial part of your business strategy, not just for seeking out clients and referrals for your business, but for helping you build a network of suppliers.
In my recruitment work, I share operational responsibilities with my business partners. We are all self-employed, but to the outside world we’re colleagues operating as one company. I’m responsible for marketing and social media while my colleagues handle the IT and finances.
Are there other people you can collaborate with on a barter basis?
Be in control of your money
Not having a regular income can be the most challenging element of self-employment. It can take anything up to four months for recruitment fees to land in my bank account. But the payment model for coaching is completely the opposite, with clients paying for their courses upfront.
If you can find a way to mix up your payment terms in a similar vein, it will help with your cash flow.
To control my spending, I transfer a basic salary from my business bank account to my current account at the end of each month, based on my guaranteed outgoings plus a slush fund.
Don’t forget unlike permanent employment, you need to keep money aside to pay your tax bill. Knowing what you owe in tax and ringfencing that money will make opening that brown envelope slightly less painful.
Get yourself a good accountant and ask for their advice on how you should manage your money throughout the year – not just when HMRC comes knocking on your door.
Don’t compare your beginning to someone else’s middle
Whatever stage your business is at, there will always be others who appear to be more successful than you.
But however similar your business model might seem to theirs, they aren’t going through the same challenges or peaks as you, and you don’t know what they’re going through either. You may be earning less money than the next entrepreneur, but perhaps you’re spending more time with your family.
We all have different goals, timescales, commitments, setbacks. There are so many variables, there’s just no point comparing yourself to anyone else.
You do your thing as best you can, OR in whatever way makes you happy.
What is your ‘why’?
I have changed my focus several times since leaving my permanent job. I’ve gone from being a makeup artist (short-lived) and blogger (also no longer) to going back into recruitment and beginning my coaching journey.
I imagine the balance will shift again before I hang up my boots.
Think back to why you left your permanent job and focus on your motivation. My motivation was to spend more time with the kids, to be in control of my own destiny and to be able to dictate when and where I worked.
All of my business incarnations have met those needs, but the earlier versions weren’t going to keep a roof over my head. So I had to change direction.
It might take a few attempts to figure out what you want to be when you grow up (even if you’re in your late 40s like me). Don’t regret those attempts, they will have given you valuable skills and shown you where you can develop and improve. You needed to take those steps to get here, to this part of your career.
Self-employment gives you the independence to change your goals, as well as how you get there. Figure out why you’re doing it, and if what you’re doing isn’t working – change it.
Keep on keeping on.
All of this takes time and effort. Success seldom comes overnight. So many businesses close during the first year, simply because people give up.
The only certain way to fail is to quit.
Perseverance pays off. There will be bumps along your professional path and you need to be willing to take the rough with the smooth.
I would really love to hear from you if you’re self-employed. What have been the biggest challenges and the best rewards?