Working for yourself makes you richer

I know it is not everybody’s cup of tea, but working for yourself and earning money for yourself is far more rewarding, financially and emotionally, than working for a company or another individual. It is often estimated that your employer earns more than 10 times from you of what he or she pays you, or even more. So if your employer is paying you say, $2,500, he or she might be earning more than $25,000 from your services!

I’m not saying people should leave their jobs and plunge into the uncertainties of self-employment, especially when their current jobs provide them financial security and they have no idea what exactly they want to do if they start working on their own. But in case you want to leave your job and start on your own, here are a few things you need to take into consideration:

Do you know what exactly you want to do?

This is very crucial because this can define your entire life. Clarity of purpose is the most important factor when you start working on your own. You cannot just leave your job because you want to freelance, or want to work for yourself. You should be sure of what you want to do. For that, you should ask the following questions from yourself

  • Do you know what product or service you are going to provide?
  • Is there really a demand for what you intend to offer, or can you create the demand?
  • Do you have the resources to manufacture the product or can you get it manufactured?
  • Do you have the ability to market your business enough to get you started?
  • Are you REALLY passionate about what you are planning to do or simply doing it because others are making good money from doing it?

The last point — about being passionate — sees you through most difficulties.

Do you have enough money to sustain you?

It’s usually very difficult to save money when you do a job. Money slips from your hand like sand in a fist. So you MUST have a saving before you even think of starting your own work. You won’t only need money for your business, you’ll also need it to sustain yourself and your family. Believe me, business costs are as unpredictable as the direction of an eddy. And so are family costs. You need more money exactly when you think you have handled all possible expenses. Here’s how you should (according to me, you can differ) calculate how much you should save, assuming, for a year:

Your saving = money for business + money for family + buffer

Money for business will include running and marketing costs for a year. You can very well make out what family costs could be, and if possible, this should also include emergency costs like illnesses or accidents. The buffer is, in case you decide that after a year (or whatever time you want to invest), if things are not working the way they should have, you want to find a new job. It may take a month, or two months, or three months. So you should have money for that period too.

Remember that financial ruin should be avoided at all costs, nothing (except for yours and your loved ones safety) is worth it.

Do you have what it takes?

You need great discipline to work on your own, because when you do a job, someone or the other is always breathing down your neck. You have deadlines, you have appraisals, you have to submit status reports and there are various project meetings and so many people are answerable to so many people. You are always being evaluated by your co-workers and your superiors.

When you do a job, you are assigned a task or a project, and you complete it and this is how far it goes.

When you work for yourself, you not only fetch work for yourself, you also need to make sure you deliver on time. Discipline and motivation are the key. Your every move has to be self-driven. Nobody is tracking you and nobody is forcing you to meet the deadlines. Of course there will be your clients and customers but they are not going to interact with you the way your boss or your colleagues do. It’s a totally different ball game when you work for yourself: you are your own boss, you are your own employee, and the only person you are answerable to is yourself.

It’s a difficult position to be in, no matter how rosy it sounds.

Will your immediate family stand by you?

Family is no problem if you don’t have one, or if you don’t live with your family. But if you live with your family, then your decision will have an impact on your family for sure. You will change, the way you work will change, and the way you spend money will change. You may spend more time doing your work in the beginning months, or years, and you may have to allocate more finances to your business and this may disturb the finances of your family. Your spouse and children may find you distracted and constantly thinking about your work. You may not have a social life for a considerable amount of time. There will be countless periods of ups and downs and your family will need to understand that and give you the needed emotional support as well as space. The household responsibilities will have to be reallocated and the priorities will have to be redefined. Your family may have to change its lifestyle if you plan to work from home.

Hence, it is very critical that you take your family into confidence. You cannot simply come home one day and declare you have left your job and have decided to work for yourself. I think the best way to approach this is to introduce the topic casually during one of the family dinners or outings. Something like, “you know what, I wish I could run my own business.” Have a plan ready. Get everybody involved, and let it be a collective decision.

Some other things you need to be good at:

  • Business networking: It’s always good to know right people at right places. If you know many people, it’s well and good, but if you don’t, you should regularly try to attend conferences, business meets and parties where you may bump into prospects and leads. Use your best charms to strike new business friendships and be as outgoing as possible. Business networking could be a crucial bone in the backbone of your business.
  • Awareness: Always know what’s going on in your business. Try to be an expert in your field.
  • Finances, accounting, taxation: When you do a job your company employs people to take care of all these things. Once you start working on your own you’ll have to take care of them. A basic knowledge of accounting and financial planning can save you lots of money and heartburn.
  • Technology: People that snub technology are arrogant fools. Technology drives the world. Use computers, laptops and all the gadgets that can help you organize and operate your business and personal life in a better way. Gadgets like high-definition phones and PDAs save you lots of precious time.
  • Inter-personal relationships: As your business expands, you’ll be interacting with more and more people, and you may even one day open an office and employ more people. Good inter-personal relationship skills help you manage employees, clients and customers well.

Does it work for everybody?

No.

So how does working for yourself make you richer?

My personal experience is that if you spend even 40% of the time you spend on your regular job on your own business, you can double the amount of money you can earn. First of all, you become focused when you work on your own, and hence more productive. You don’t waste time on travel and office politics. Your income depends on how much you work and how well your work: you can double your monthly income in a matter of a few months — this can never happen if you have a job unless something really drastic happens. Since your clients will be paying you instead of some company, all the intermediary costs will be cut, and even if you charge more, you’ll be actually costing less to your clients and customers.

The sky is the limit when you work for yourself. You can expand or contract your operations according to the need of the hour and there will no one to constrain or throttle your creativity. You become responsible for your own actions and this improves your quality of life.

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[tags]self employment, freelancing, home business, work at home, self improvement[/tags]