Thursday, December 30, 2004

Self-Employment

In my last post, I discussed the issue of Employment, which in the common parlance means accepting hire to a company for set responsibilities and wages. This provides the security of knowing where your next meal will come from, but it limits the opportunity for someone to advance their economic independence. Fortunately, that window may be opening up again.

Now, to anyone under the age of 30 reading this post, be very, very careful about anyone promising you that you can get wealthy fast. Wealth has always been difficult to build, and for valid reasons. First off, it's a basic rule of Life, that it's much easier to spend money than to make money. Next, money always attracts attention, from the Tax man to friends you never knew you had; holding wealth is just as hard as making it. Third, if you do not know how you make your money, even a hot streak will end meaning nothing, because you have to know how to get hot again. Fortunately, there is a pretty good way to become financially successful, and it comes down to four rules:

1. Do your homework. Plan, review, analyze, repeat.
2. NEVER lie, cheat, steal, or tolerate those who do.
3. Never forget your people, or take them for granted.
4. Stay humble.


I. First off, when you decide to get serious about making money, you're going to have to decide what you want to do, what you're willing to commit to make it happen, and where your heart is. Every financially succesful person who has made their fortune, has done it through a lot of hard work and persistence. You don't do that unless you are committed to what you're doing, and you can't make that commitment unless your heart is in what you do. You also have to be serious enough to realize, no one gets paid to play around; even professional atheletes and musicians and artists put a lot of work into their effort. So, you need to think about who you are, what you're about, because that's your foundation. You follow it up with putting together a Business Plan. Why? First off, unless you're already wealthy, you need a bank loan or something like it to make the business start, and for that you need a Business Plan. But also, you want a chance, and while some people may realize that 80% of all new businesses fail within a year, over 95% of businesses which survive that first year had a Business Plan, and over 98% which last more than three years had a Business Plan. No Business Plan, no chance.

A Business Plan is pretty simple in concept, but you really need to sweat the details. You need to come up with a realistic idea of how many customers you'll have, how much you'll make from those customers, how much you'll need to spend to run that business, and so on. And you need to be able to defend those numbers, with evidence. It's kind of like a really tough Term Paper, but an intensely personal one, too.

One benefit to drawing up the BP, is that once you start to get into it, you'll already be moving ahead. Getting that first loan is like passing a gallstone, but banks like loans and sooner or later, a serious BP will get a loan, at which time you will discover two feelings: the sheer panic of owing a huge debt, and the realization that you are going to do it. Because of the BP, you will already know where you will put the business, what it will cost and how long to get the supplies and equipment and hire/train your own employees. You will need to be inspected by various city and county departments, which has the additional effect of driving many new business owners to the conservative side of politics. But eventually, you'll be on your way.

II.
Sooner or later, you will wonder if you might pull a trick or two to get ahead. DON'T! There are only a few reasons why customers will give a new business a chance; convenience (which will only be true for a few people), lower prices (which your competition will match, or quality. For some reason, businesses sooner or later often fall into lowering the quality, cheating a little on their promises, or some other little bit of shadiness. That makes the honest ones stand out. If you want to be around ten years later with a good reputation, NEVER let your standards or ethics slip.

III.
No matter what you will be doing for your business, you'll depend on people, especially three groups: Your customers, your employees, and your suppliers. Always be courteous, always reward extra effort, and always treat them the way you'd want to be treated, if you were in their place. Because you either were once, or you will be, and in any case, networking includes making sure everyone who knows you, knows you at your best.

IV. Nobody like arrogance, but it's more than that. When everyone knows you don't have a big head, your success makes your business like a family, and your network of contacts like a community. You'll sleep better, and you'll never have second thoughts about your decisions.

OK, simple rules, but awfully hard to put into practice. What was that window, though, that I was talking about? INFORMATION. Once upon a time, if you had a job, you were pretty much stuck in your routine, no time or chance to find out what else you could do. Now, part-time work is a real possibility, and more than a few people have been able to start their own business by researching the web and building their Business Plan in their spare time. Right up to the point of commitment, you can recon your options and decide your course.

It's worth thinking about.

12 comments:

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