Category Archives: Self-Employment

Are You In Business or Enslaved to Self-Employment?

Oddly, the ultimate goal of self-employment might be to work yourself out of a job.

Many people start businesses simply to create jobs for themselves. Self-employment offers many benefits, not the least of which is the opportunity to develop basic business trade skills, while getting paid for work you love to do. Self-employment is everything some owners want, while others use it as a stepping stone to build sustainable, stand-alone businesses.

What’s the difference between self-employment and being in business? Here are some signs that you are self-employed.

1. You are the business. When customers think of your business they think of you, and they usually count on you to be one delivering the goods.

2. You might be tied to a roller coaster, feast and famine schedule. You work long hours while contracts last and you’re unemployed when they end. You are at the beck and call of your customers and dare not turn down any jobs because you never know when they might stop coming in.

3. Your pay-cheque is tied to the amount of hours you personally spend serving customers. When you stop, the revenue stops; when you get tired the business stops.

4. You spend all or most of your time working in the business, with no energy left over to work on the business.

5. You likely don’t have financial systems in place, probably do your own bookkeeping, and treat your accountant to the occasional shoebox bulging with receipts. You fly by the seat of your pants for the entire year before finding out if you’ve earned a profit.

Here are a few indicators that a business owner is moving beyond self-employment and on to building a business.

1. The business is separate from the owner. Customers don’t necessarily expect the owner to be on the front line. The business takes on more of a team approach, involving people who share the owner’s vision, mission and values.

2. The team will necessitate human resource responsibilities, systems and processes. Jobs have written descriptions and are staffed by the right people, instead of the other way around. The owner’s job shifts from the front line to leading the team.

3. Although the owner will probably still work a considerable number of hours, his pay-cheque is not limited to the number of billable hours worked.

4. While the owner might still choose to work in the business, more time is invested in designing systems for efficiency and growth.

5. The business has proper accounting and financial controls, with regular monthly financial statements and methods for tracking the flow of all monies in and out of the business.

The transition from self-employment to business doesn’t happen by accident. It is brought about when the owner consciously decides to invest in building the systems that form the backbone of the business. Once the infrastructure is in place the owner will be positioned to reduce her work hours, or possibly even sell the business and move on to other pursuits.

Age or Attitude

age-attitudeA decade ago, I cheerfully plunged into the second half of my first century on this terrestrial plane. I used to view anyone over the age of 30 as “old.” Today, my more than 60-year-old eyes see very little age difference between myself and my 80-year old parents.While I have the good fortune to be self-employed, I see more and more baby boomers being displaced from the work force. Downsized, right-sized, fired, bumped, replaced, early retired, bought out, kicked out or given the hairy handshake (not many folks seem to get the golden handshake anymore). A slap on the butt and it’s out into the big world.

What do you do with an unemployed baby boomer? I had a fascinating chat with a friend recently who is in his mid-fifties and is competing for a number of management level jobs after 25 years in business for himself and a one year sabbatical. After reaching the very short-list and losing a few major competitions, his question was, “Does age count?” Continue reading Age or Attitude

Financial Reports That Help You Understand Your Business

Too often, business owners who get into trouble don’t even know they’re insolvent until the landlord puts a lock on the door.

A business plan sets the owner up with a basic understanding of business financials, and helps avoid the carnage. All business plans should include a cash flow forecast, pro forma income statements and balance sheets. In addition to these three critical components, there are a number of other financial reports that can help entrepreneurs understand how their business works.

Here are nine financial reports and a brief explanation of each.

  1. 1.    Sales Forecast. A first year, 12-month projection of the number of units and the values for each product or service you will sell. A good sales forecast shows slower times, busier times and growth or shrinkage – it is the basic building block that enables owners to determine whether or not the business will bring in enough money to meet their financial expectations.

Continue reading Financial Reports That Help You Understand Your Business

A Self Employment Checklist

Entrepreneurship has always been a key driver for job creation in our marketplace, and small businesses will continue to generate the lion’s share of new jobs in the future.

When it comes to job creation, there’s no playground quite as exciting or readily available for new entrants than the world of self-employment. While stepping into business is not for the weak or weary, it holds great promise for anyone with skills to market and a modicum of get-up-and-go.

Here are a few questions to ask yourself as you consider joining the ranks of the self-employed. Continue reading A Self Employment Checklist