Could You Be Your Own Boss?
Nine years ago, when my life had gone from rushing to get to the office by 7:30am to rushing to feed a baby who was awake at 6am, I realized two things: One, I needed to work for reasons that had to do with my financial health as well as my mental health. Two, the last thing I wanted to do was to have to be anywhere at 7:30am ever again.
They seemed like competing ideas. How could I return to work without having to punch a clock? The answer was a bold one: I’d go into business for myself.
I had more than 10 years of experience as a professional writer. Plus, I had grown up watching my father run his own business. I knew it was doable and felt I had the skills to do it. Trouble was, I had no idea how to find people who would pay me to write. So I approached the problem as I would any story I was reporting: I called people who were doing what I wanted to do and asked, “How did you get there?”
I was warned of the pitfalls and the risk. I learned what it means to sell yourself and not just your skills. I took a marketing class that paid for itself many times over. Through networking with friends and colleagues, I nabbed my first freelance writing assignments. I identified the market I wanted to pursue, researched it and then finagled my way in.
The first couple of years were lean. But I also learned to manage my expectations and set growth targets for myself. Today I’ve reached the initial goal I set out to reach: to earn twice as much as I had been at my full-time job while working half the hours.
Without question, getting started is the hardest part. Here are six steps that can help you make the leap from being an employee to being your own boss.
Identify Your Target Market
No matter what product or service it is you are trying to sell, the biggest mistake you can make is to think: “Everyone will want this because it’s such a great idea.”
No, they won’t, says small business coach Denise O’Berry. Wanting something and being able to pay for it are two different ideas. A select group of people will meet both criteria — be wanting and able — and if you can identify who that group is and fine-tune your marketing toward them, you now have a starting point with potential.
“You want to do some kind of back-of-a-napkin financial figuring,” says O’Berry. “Who will want your product? It could be 1 percent of the target market or it could be 20 percent, and there are so many influencing factors. The economy can be an influencing factor, what’s going on in the world, what’s going on in the local space. But be conservative. Entrepreneurs are so optimistic. They think, ‘Oh, well 50 percent of these people will want what I have,’ and that just is not the truth.”
Fine-Tune Your Idea
When I first started my writing business, I identified my target market as “magazines.” I was a jack of all trades, and in my mind, if an editor needed a story on a topic, no matter what it was, I could write about it.
It was a bad approach, as many wasted marketing hours taught me. My “I’m a writer and I can do stuff for you” sales angle did not make me stand out from the many other writers saying the same thing. With the help of a marketing class, I realized I needed to focus on my strengths. At the time, I had just left a job as health editor for a daily newspaper. Health writing was the niche I needed to pursue. Then I narrowed it even further: I was a new mom, and pregnancy and children’s health and nutrition interested me greatly. Once I started focusing my marketing to those ideas, promoting my professional experience along with my personal, sales started rolling in.
“A mistake people make is that they look at the issue too broadly, both in terms of what they can offer and who’s going to buy it,” says O’Berry. “The bigger you want to start out, the more capital it’s going to take. And why would you do that anyway? It’s so much better to test a small idea and tweak that and expand on it, than it is to start really big and have to narrow it down.”
Write a Business Plan
Something amazing happens when you’re forced to turn the idea in your head into written words on a page. One, the idea becomes real. And two, the idea is now ready to be scrutinized. Both will help move your business from idea to reality.
Your business plan should be an explanation of the product or service you hope to sell and your financial expectations. What is your market? Where is your financing coming from? How did you come up with the idea? And why are you the person to bring it to market? “I usually tell folks to write a three- or four-year business plan,” says Mohit Chopra, business banking sales manager for PNC Bank. “These are all projections: the income that you’re expecting to come in and what your expenses are and, before that, the capital that’s needed to start the business.”
That plan should include contingencies for events that can impact your business’ bottom line. “You will have things come up that will be unexpected and so, from a financial standpoint, you’ve got to be prepared for it,” says Chopra. “That could mean that you aren’t going to get a paycheck for a period of time. So a business plan really does play a key role.”
Once you've completed a shell of a business plan, seek out a successful small business owner in a related field in your network to review it. These business owners are more likely to respond if you offer to pay a consulting fee, as their time is in high demand.
Invest in Your Idea
Make sure that for whatever service you are planning to provide, you have the infrastructure in place before you take on clients. If you want to become a life coach, you might need to purchase a high-quality webcam so you can videoconference with clients. If you’re starting your own accounting firm, you might need certain software programs for client work. If you want to open a bakery, you’re going to need significant cash on hand to lease a storefront, buy equipment and hire staff.
Knowing where that money will come from is crucial to your business’ success. Will it come from your own savings and assets? Will you ask friends and family to invest in your idea? Don’t hang your hopes too high on getting a small business loan, says O’Berry. “Out of hundreds of clients I’ve worked with, I can probably count on two hands the number who have gotten a business loan,” she says.
Take a Risk
Small business aspirants often find themselves in a spiral of spending so much time thinking and analyzing their launch that they never actually take off.
“There’s a lot of busyness around doing research and finding things out,” says O’Berry. “But doing that type of stuff is activity. It’s not action. You want to be really careful about confusing activity and action. Action is actually taking that idea and the information that you've collected and putting it out there for somebody to purchase it.”
Set up a task list or give yourself a deadline, and once you reach that point, launch yourself. You don’t have to start big. In fact, sometimes starting in a small way helps you fine-tune your product and business plan so you can grow in response to the market.
Manage Your Expectations
The idea of running your own business is exhilarating. Doing it can be exhausting. You have to remain optimistic in the face of disappointment and rejection. For every 10 cold calls you make, one might lead to a sale. Sometimes a client won’t be happy with the product and his response will sting, but losing the future income from that lead will sting more.
But then you’ll have days where everything goes right. You’ll meet your monthly sales goal by the 20th of the month; a referral from a happy customer will lead to a huge sale. Savor those days. Bask in the relief that a fat bank account and steady customers bring. But never get lazy and never stop marketing. A small business is an engine that needs to be constantly fed. Once you get the routine down, you’ll not only have started a business, you’ll be poised to make it grow.