My version of self-employment
This week I made the decision to close one of my businesses that was, quite frankly, just not performing.
It is hard to explain people who are not, or have not been in business very long, how freeing letting business related things go can be.
I have been seriously self-employed since November 1995. I say “seriously” because there were lots of “side hustles” in the lead up to the purchase of my first bricks and mortar store and the determination that I was never going to work for a boss again.
That first business was a Kodak Express One-Hour Photo shop. For the 15 odd years prior to that point I had worked in One-Hour Photo shops, so I did know what I was doing ? I had been a manager for at least 8 or 9 of those years. I made a pact to my family that, as I did not ever need to bring work home with me when I was a manage, I could see no reason why I would have to bring work home now.
I stuck to that pact and right up until VERY recently have not even had a “work” computer at home. iPads with just my person email address is just fine. Work can stay at work.
It is all about boundaries.
The other pact I made to myself was that my wage must at all times be at least that of the job… For me that meant that the shop MUST be able to pay me as the manager of a photo shop. If it could not do that, why was I doing it? I may as well get a job.
As a couple, we decided that my husband would go out on his own and became self employed in 1999. Same rules applied. No silly hours, and same pay as the “job” required.
One business decision we do in all our businesses is to have a really close look at the profit and loss numbers at the beginning of both the financial year and the calendar year (So July and January) to determine what needs to change. We look at what has done well and how can we improve on that but also what has done poorly. We look at products, services, staff, clients, time we are spending in the businesses and profit margins as well as actual dollar profits.
Over the years we have seen many a product or service be introduced only to realise that it was a drain on resources and be let go in 6-12 months. Sometimes they have not been as profitable as we planned. Sometimes it might be a good dollar earner, but took too much staff time to create. We have tweaked staffing levels to be fairer for all concerned. We have “sacked” clients that are less than ideal. Those one’s that we might need to be constantly chasing for payment, or one’s that are just a general pain in the rear.
Working my way out of a job
My lifestyle plan began a number of years ago and involved trying work out a way to replace 1-2 hours of work consistently over a 4-6 month period. The idea was that in the beginning I did 40 hours a week work, then 38 then 36 then 34 etc etc over time. The money needed to stay the same.
This has worked pretty well and I now work about 15 hours a week
I am not at the point of being able to “sit on a beach with a laptop” type lifestyle, but I am creating businesses that do not need the owner in them all the time. This makes for attractive businesses when it comes time to sell.
The Question of Money
This is a very personal issue. How much YOU want to make to live your lifestyle will most likely be totally different to what I want.
Most people VASTLY over estimate the amount of money they actually need o create their perfect life.
My advice is to always start with a “Be-Do-Have” Perfect Day exercise and when you have completed it, price that day out.
Now, remember, in your ideal day, you might have that you are going to a café by the beach for breakfast…but do you REALLY want to do that EVERYDAY??
Unless your ideal day included a far bit of workout time, those café breakfasts are going to be pretty detrimental to your health eventually ?
As a good guide though, start with the salary you have and think what would it look like if you had that same salary but only worked ½– ¼ of the hours
Where to now?
If you are working fulltime and trying to become self-employed, but can’t afford to buy a business or try to create a product or service that can replace a few hours work. Once you can do that, it might be possible to reduce your hours at work. Keep going until you replace all your hours
Business can be hard, there is no denying it, but you do have to be doing something you enjoy. If you wake up in the morning and dread the day ahead, you may as well go back to a job and take advantage of the benefits that this might bring – sick pay, holidays, superannuation etc
I can honestly say that I do love being the master of my own destiny. If mistakes are made, I know they are mine and mine alone. Conversely, the rewards are welcomed with pride that I created them.