Self-Employment Tips

Self-employment:
A surprising solution for the leisure starved

By John O. Andersen

(First printed in Be There Now – A Zine of Budget Travel and Beating the Rat Race)


“You think you’re busy working for someone else, just wait until you work for yourself. You’ll never have time off.”

This is what I was told before I took the plunge into self-employment several years ago. While this may be the case for some people, I’ve found the exact opposite to be true. Running my own business enables me to both earn a comfortable living and have leisure time. Granted, this wasn’t automatic, and it did take some doing in order to achieve; But I believe anyone with the determination to go out on their own can make it happen.

Frustration was the initial reason I considered self-employment. I was frustrated with the pressure to choose a career and then spend most of my waking hours working in it until retirement. There was never one single area I felt passionately enough about and to which I desired to devote so much of my life. In college I changed majors several times and since then have tried out and enjoyed success at three unrelated careers. To some extent, I began to enjoy being a “career switcher,” and the decision to avoid a mortgage and other debt preserved my freedom to continue this sampling and dabbling.

The main reason for my “irresponsible” behavior was that I found conventional careers to be too much of a straitjacket. I couldn’t bear what I perceived to be the unwritten imperative to be a “team player” all of the time and to pretend to have mainstream interests – spectator sports, “shopping till I drop,” or drooling at the mere suggestion of taking an ocean cruise. To achieve success in a status career seemed to demand that I play a role which ran counter to my personal values by requiring me to “dress for success,” live at the right address and drive the right car. The harder I tried to “fit in,” the less authentic I felt, and the more it dawned on me that what I really wanted was a livelihood which would free me from all of those imperatives.

Self-employment seemed like the perfect escape from this dilemma. Before I left my job, I spent several months researching potential businesses I could purchase or start. Partially in my desire to do the unexpected, but mostly because I became convinced of its viability, I purchased a small carpet cleaning business. Quickly I discovered a major benefit of that business–LOW STATUS. In other words, a carpet cleaner is so low in the work hierarchy that they are basically exempt from having to play the status game – just what I wanted! When you tell someone you’re a carpet cleaner or a janitor, they usually don’t know how to respond. More than a few think you are some unfortunate schmuck who couldn’t do anything “better” for a living. What mostly escapes their notice is the fact that cleaning businesses thrive in both good and bad economic times and that as long as there are people, there will be dirt and messes, and hence, plenty of cleaning to be done.

Cleaning is one of those low status perennial businesses which really deliver when it comes to the bottom line. Unfortunately – or fortunately, depending on your perspective – few people discover these “gold mines” because they are so conditioned to thinking that certain work is “beneath” their potential. Parents encourage their children to go to college to get a “good job” – though it’s never exactly clear just what a “good job” is other than one with a fat salary – and the colleges condition young people to think that success is having a status career which in the majority of cases involves working for someone else. Hence, relatively few young people consider businesses requiring manual labor. Nor do they realize that such businesses can provide them with a comfortable living and lots of leisure time. Certainly it took me a long time to realize this, conditioned as I was to set my sights a bit “higher.”

This is why I would encourage anyone interested in self-employment, including those with advanced degrees and professional experience, to “re-check their facts” and take a serious look at the many seemingly dull or low status businesses which our culture conditions them to overlook. There is a great need for conscientious, articulate, and customer-oriented people in nearly every industry regardless of how little status it may carry. Running a profitable business, even if it’s just toilet cleaning, will challenge the most capable of people. Regardless of what you do for a living, if you’re trying out new things and always working on improvements, it’s very difficult to get bored.

The cleaning business has all of the elements I love: simplicity, low overhead, tangible results, and opportunity for an abundance of leisure time. I also discovered a hidden benefit: as a carpet cleaner, I have time each day – as I travel from job to job – to listen to unabridged audio books. In an average month, I can listen to no less than a half dozen books on subjects ranging from history to travel writing. While this may not be the same as actually reading a book, it’s a great way to gain a wealth of knowledge about a variety of subjects. A goal of mine is to get to the point where I only need to clean a few days a week and can spend the rest of the time in reading, research, service, and travel; though this will take some time to achieve.

During the first two years in business, I didn’t have much leisure time at all. To some extent, this was due to the usual difficulties in building a business, but mostly because I spent too much on “conveniences” such as newfangled cleaning equipment, advertising, office equipment, accounting fees, cell phones, live answering service, etc.

Like so many first time self-employed, I was unsure of myself, and thus an easy target for the hordes of salesmen who had all the solutions for my business, or as they put it, “to make it possible for me to do that which I do best which is to make money.” Many purchases were the result of fear of the customers I might lose if I didn’t have whatever service or piece of equipment I was “supposed” to have. With experience I understand how the newly self-employed – particularly if they’ve been conditioned to taking orders from others – can be gullible about such things. More importantly, however, I’ve discovered that making money is just one part of running a successful business which entrepreneurs must be “best” at. Another crucial skill is the ability to control overhead. This is often the more challenging of the two, and none of those friendly salesmen will do it for you.

Predictably, as soon as I stopped spending out of fear and started cutting my overhead, I discovered more in my pocket at the end of the month. My savings and retirement accounts started to grow and there was much more time for leisure pursuits. Somewhat to my surprise, none of these cuts affected the quality of my service. In fact, I found that with the leaner overhead and correspondingly lower pressure to make more money, the quality of service improved. I learned a very important lesson which is that customers care infinitely more about the results of the job, than how you achieve them; as long as you are honest, ethical, and safe.

After a few years of self-employment experience, I’m beginning to develop a philosophy about what works and what doesn’t. Through constant pursuit of the objective of earning a comfortable living and having a lot of leisure time, I’ve discovered five principles which work for me. Although some readers may disagree with these ideas, I believe that sharing them with others can stimulate thought and perhaps help someone to see their own situation in a new light. Breaking free from today’s straitjacketed career culture, and living in a self-directed way, are radical moves indeed; And they necessarily require radical steps in order to achieve them. Here are mine:

1. Find your niche.

If possible, avoid offering more than just one or two basic services. Too often, trying to be all things to all people needlessly complicates your business operation, increases your overhead without a corresponding increase in profitability, and turns you into a nervous wreck. A saner approach is to find a niche where you have a natural advantage over the competition and which matches your personality and needs. We live in an age of increasing specialization, and it is therefore imperative to be highly competent in order to be competitive. While new markets may seem attractive, I’ve found it wise to “stick to the knitting” for the most part, always increasing expertise in my chosen services. Too many small businesses make the mistake of adding extra services during slow times. A better approach would be to solidify their existing niche. One way to do this is to let your customers know how you differ from the rest; you may have a more thorough process or be available to work when the others are closed. There are a variety of ways to stand out from the pack and thus increase customer loyalty. While it may be true that being different is a negative when working for someone else, it is definitely a positive when working for yourself.

2. Be hawkish about expenses.

It’s a daily battle out there to hold onto your money. I control expenses by always being on the lookout for more cost effective methods to achieve the same results. In the carpet cleaning business, conventional wisdom says that truck-mounted systems , which are expensive to operate and maintain, are the only way to go. In certain under-served markets, however, truck-mounts don’t work very well – i.e. high-rise office buildings, mansions, and other areas requiring security. A good strategy is to identify those niche markets and serve them with lower cost, yet highly effective electrically powered equipment. I’m sure there are similar under-served niches in practically every industry.

Here are a few typical questions to ask yourself in scrutinizing expenses: Are you paying too much for insurance? When I broadened my definition of insurance to include such things as savings and lifelong learning, the need for low deductibles and riders for every contingency disappeared. What about your suppliers? Do you have to drive somewhere to pick up your order or can you order wholesale by phone and have the supplies delivered to your doorstep? On-line or catalog ordering saves precious time and reduces fuel expenses as well. Do you really need a cell phone? Or could you stop at a phone booth two or three times a day to make urgent calls? Do you really need a new vehicle or could a used vehicle with a new coat of paint fill the need? Do you really need to hire a bookkeeper, or could you learn to do your books on your own with a software program and perhaps a book or two from the library? Do you really need to hire an attorney, or could you obtain a book with forms which cover most common sitations which small businesses encounter?

To achieve and maintain a healthy bottom line, it’s vital to search for cost effective solutions to every need. It takes a commitment to scrutinize every aspect of the operation and cut those areas which don’t directly contribute to the quality of service to the customer.

3. Keep your business records and organization simple.

Don’t incorporate unless you really need to. This will help you avoid costly accounting, tax preparation, or legal services. If you’re afraid of the liability issue, simply incorporating isn’t going to stop someone from suing you and going after your personal assets. By far, the best “insurance” against lawsuits is to do high quality work, and secondly, to have a good liability policy.

There are enough books about running a small business that anyone disciplined enough to read them could set-up and operate a business requiring only infrequent professional assistance. Also, there are classes available to learn bookkeeping, tax preparation, and other skills. I’ve known many small business people who never learn to do their own books and taxes, and therefore must pay to have them done by others. While this may seem like a trivial matter, I think a small business owner who really wants leisure time should be as self-sufficient as possible. Not only does this cut costs, it’s also one of the best aspects of self-employment – the chance to get experience in a variety of roles and be a “jack of all trades.” I’ve found that wearing all of the hats which a solo entrepreneur must wear – salesman, bookkeeper, production specialist, repairman, purchaser, accounts receivable clerk, scheduler, etc. – is sometimes hectic, but always stimulating. And it certainly keeps me from getting bored.

4. Choose your customers wisely.

This suggestion may surprise some who believe that you just take who you get. In the early stages of running a business, this is mostly true; But if you are still taking lowball customers five years into the business, then there is no one left to blame but yourself. Some claim that you have to do the less profitable “bread and butter” work in order to get the better jobs. I disagree. People who follow that advice, often get mired in a rut of unprofitable customers forever, and thus, never make enough money to take any time off.

Never forget that your relationship with customers is a two way street; they choose you and you choose them. Louis Pasteur once said that “chance favors the prepared mind.” This applies directly to cultivating good customers. The best prepared business people always have a better chance of getting the highest quality customers. Prepare for those customers by offering the best service, paying attention to detail, and charging a fair amount for your services – if your prices are too low, the best customers will question your quality.

To the greatest extent possible, choose customers who pay upon job completion. Try to avoid receivables, but if you must have them, be sure to charge enough to make the wait feasible. When I purchased my current business, there were a lot of property management customers who were getting our services at rock-bottom prices and enjoying a liberal 30 day credit policy. This is a recipe for financial disaster even if those customers are keeping you busy. There is a huge difference between being busy and making money. If you lose money on each job, you won’t make money by doing a lot of them. This may be a truism, but I’m amazed at the number of business people who don’t seem to understand it. A much wiser move is to find the customers for whom quality is more important than price. In my business, residential customers do care about price, but when pressed, they are happy to pay more knowing they are getting a knowledgeable person who does top quality work.

5. Thoroughly question yourself whether or not you really want employees.

While some businesses thrive when they hire people, many others put themselves on a treadmill ever after, scrambling for the cash to make the payroll. Granted, having employees can be a big ego trip and certainly raises your status a few notches. However, these are foolish reasons for assuming the demanding role of employer.

New employers may find that as they take on employees, their ability to have leisure time will actually decrease. Speaking from experience, I remember the first time I drove away from a job where employees were working for me. It was great to know that I was making money without having to actually do the work myself. However, there were only a few days like that. Much of the time I had to “put out fires” with the customers, or fix problems the employees created. Twice, while I was away, an employee damaged a customer’s property – ruined a carpet with cleaning solvent and in another episode, backed the van into a metal garage door. Both incidents required an insurance settlement. After that I could never get away from the business without worrying that something would go wrong. Hence, I could never really “get away.”

A huge benefit of not having employees is being freed from the 9 to 5 schedule and having the capability to serve customers at other than normal business hours. This gives you a competitive advantage over other businesses with employees who don’t work “odd” hours. These days, more and more customers want their carpets cleaned in the evenings and on weekends when they’re home. I accommodate them and happily rearrange my schedule to have personal time while everyone else is at work.

Also, I’m learning to apply this principle to the seasonality of my business. By planning ahead financially, I’ve discovered that rather than dreading slow times, I can actually embrace them. For instance, every year my business goes slow after Christmas for about a month or so. Therefore, this year we decided to close up shop for 17 days and fly to London to spend time with my wife’s family. Enjoying the freedom to do such things at a moment’s notice is a great benefit of self-employment. On the horizon, I’m looking forward to a three week trip to India in the year 2000. As long as I’m healthy and in a position to do so, I intend to have many such adventures.

In a nutshell, self-employment is an excellent way for the right individual to achieve a lifestyle with an abundance of leisure time. Certainly, it demands a fair amount of motivation, discipline, and self-direction. And perhaps I’m optimistic, but I believe that those for whom the pursuit of leisure is a passion, and who choose self-employment with that end in mind, will usually find the way to make it all happen.

Copyright 1997, John O. Andersen. All communication should be sent to:
editor at unconventionalideas dot com

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