Entrepreneurs pay heavy dues for years for a chance at success

Are you restless in your job? Have you been working in your field for more than ten years? Do you yearn for more balance in your life? Do you wish you had more control over your schedule? Are the corporate political games wearing you out? Do you have less desire to climb the corporate ladder? If so, you are probably dreaming about hanging a shingle and joining thousands who have started their own business.

But is it right for you? Last week, I discussed some strategies to help you redefine success in your current job. Today, let’s take a closer look at what it takes to get started as an entrepreneur. Running your own business is enormously satisfying. You are in control of your own schedule and you can pursue any opportunity you choose. The potential for growing your income and personal net worth is enormous, but you will have to pay some dues.

Becoming your own boss is an exciting prospect. But many wide-eyed wannabes plunge ahead without thinking through some of the following issues.

It’s not enough to be talented in your chosen field. You need to understand and run the whole business, not just the product or service you plan to deliver. Since most single-shingle entrepreneurs can’t afford a staff in the beginning, they must be willing to do it all. You will be the chief marketer, secretary, billing clerk, public relations spokesperson, bookkeeper, networker, negotiator, purchasing agent, graphics department, and service provider. Multi-tasking at your old job will seem like a day at the beach compared to running your own small business. Let’s take a look at some of those tasks.

Administrative Skills
You simply won’t have time during the workday to do it all, since you will want to be with clients (or potential clients) during the day. A friend of mine, who recently went into business for herself, said, "I had no idea I’d be up until two in the morning typing proposals and invoices. I’ve always had a secretary do all of my paper work!" As an entrepreneur you will have to organize some simple systems. For example, you will need to track who’s paid and who hasn’t, and you will also need a follow-up system for your marketing efforts. You would also benefit from some reusable letter and proposal templates.

Financial Skills
Educate yourself about the financial realities of running your own business. Talk to people already in their own business about realistic earnings projections and cash flow issues. Find an accountant and a lawyer who can help you figure out what kind of business would be best for you (sole proprietorship, "C" corporation, etc.), and who can educate you about licenses, taxes and systems you will need.

Doing your homework upfront will be enlightening. For example, a new work-at-home entrepreneur I know was shocked to learn that in order to pay himself $60,000 a year, he is going to have to bring in $120,000 in gross revenues. Although it’s a fairly simple consulting business, his administrative costs and overhead were more than he anticipated. The cost of buying a basic insurance plan and other benefits was a big shock. Another colleague, in the computer hardware business, found that he couldn’t pay himself for several years when he got started.

Often, single-shingle entrepreneurs underestimate how long it takes to get on stable financial footing. Many experts recommend having at least three years of savings one can draw from as the fledgling business gets established. The fact that most businesses fail during the first three years is a strong warning about the time it takes any young business to grow roots.

Marketing and Public Relations
A friend of mine, who works for herself, commented to me recently, "I used to think that because I was well-networked in the community, I would have no trouble stepping into my own business. But I found that wasn’t the case. I took it personally for awhile, but now I realize that first, my friends have to have a need I can fill, and second, I have to establish some credibility in my new role."

Marketing your products and services continues to be one of the toughest challenges of the new entrepreneur. You know you have something good, but how do you get the word out? It’s typical to hear a single-shingle consultant say, "I can’t find time to market and prospect because I’m too busy working with my current clients." Unfortunately, there is no choice, because when those projects are finished, there will be nothing in the pipeline.

New entrepreneurs find themselves attending more breakfasts, lunches and networking events than they ever thought possible. They discover that they will need to write articles for publications, they will probably need to do some public speaking, and they will join professional and business groups to cast a wider net. It’s not for everyone. Some find that they are great at what they do but lousy at selling themselves.

Getting paid
Another challenge is knowing how much to charge, when to bill and how to collect. Some entrepreneurs find that they don’t like talking about the "M" word. In their former jobs they were handed a paycheck and they never had to put a price tag on their own work and ask anyone for money. "I feel embarrassed somehow," one new entrepreneur told me. "I’m asking them to place a monetary value on my work. For me it cheapens the whole relationship. I hate talking about money." This is not uncommon. I know other self-employed individuals who undervalue what they do. They underprice their services, or give too many discounts, or avoid the conversation as much as possible, only to get into trouble later. Often, a client will expand a project in midstream, and entrepreneurs who don’t have the confidence to re-open the discussion will end up doing work for free.

Energy and Balance
One of the biggest disappointments for new entrepreneurs is the lack of free time they thought they’d have. Now the workday spills over into the early morning and late evening hours. Their families are irritated by their absence and the lack of money doesn’t help. "So, when are you going to make some money?" and "When can we take a vacation?" are common questions from family members. Typically, it takes three to five years to attain some degree of balance in your lifestyle. But the energy level will need to stay high. Business owners rarely sit back and coast.

Still interested in running your own business in spite of it all? If you are willing to pay the price for all the benefits down the road, then go for it, because you are a born entrepreneur! (A good web site to visit for more information is www.workingsolo.com)

Joan Lloyd is a Milwaukee based executive coach and organizational & leadership development strategist. She is known for her ability to help leaders and their teams achieve measurable, lasting improvements. Joan Lloyd & Associates, specializes in leadership development, organizational change and teambuilding, providing: executive coaching, CEO coaching & leader team coaching, 360-degree feedback processes, retreat facilitation and presentation skill coaching and small group labs. Contact Joan Lloyd & Associates at (414) 573-1616, mailto:info@joanlloyd.com, or www.JoanLloyd.com 
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