Transitioning From Employee to Entrepreneur
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Thinking of launching your own business? For those who have been on the fence for a while, there’s never been a better time.
With all of the uncertainty and devastation that’s happened this year; both at the start of the coronavirus outbreak and on through to today, there’s a good case to be made for at least having the freedom to work on your own terms.
Too many people are finding themselves without work or facing an uncertain future, thanks to the economic fallout from the pandemic and the response to it. And even six months on, things still don’t look entirely promising. According to the results of a recent Pew Research survey (Sept 24, 2020), some 25% of U.S. adults say they (or someone in their household) were laid off or lost their job because of coronavirus. Half of those who have lost jobs say that they are still unemployed six months on. About 21% say that they had to reduce their hours or take a pay cut, and most workers who’ve experienced this (60%) are earning less now than they were before the outbreak.
Many others who have managed to keep their jobs still face uncertainty and upheaval. Many have been forced to work from home, or on the flip side, are now finding that they have to go back to the office and need to contend with strange and unfamiliar protocols that are now in place. Stimulus packages have run out, some businesses are closing for good, and a number of industries aren’t even allowed to open, further compounding uncertainty and risk.
All of this has driven many to visit the idea of launching their own business, and at least claim back some semblance of normalcy. With the freedom to work when you can, as you can, own your own terms; it’s easy to see why this would be a tempting solution. But is launching your own business a good idea? Or is it just another risk that’s not worth taking?
Starting Your Own Business: Is It a Good Idea?
When it comes to starting your business, things aren’t always smooth sailing. There’s a lot to consider, and plenty of steps that you’ll need to take first. But if this is what you want, then don’t let the logistics get you bogged down. At the end of the day, the biggest adjustment by far is your mindset: and how prepared you are mentally to trade traditional employment for the often rewarding, yet very high stakes role of the entrepreneur. It just depends what you want, and how badly you want it. At least that’s what I’ve found.
The biggest, most crucial difference between employee and business owner is the level of control that’s in your hands. Rather than being subjected to the decisions of your employer, or knee-jerk responses coming down from corporate, you’ll be in the driver’s seat. For some, this can be exhilarating. For others, it can be a downright stressful prospect.
Owning your own business means that your decisions will directly impact your success –for better or for worse. Your successes, your failures, you’ve got to be prepared to step up and own it all.
But for every entrepreneurially-minded person, this autonomy coupled with the freedom to work on your own terms is what makes the concept of self-employment so appealing. No, it doesn’t mean three-hour work weeks and vacations every month. in fact, it often means longer hours, being on-call 24 hours a day, and wearing twenty different hats at the same time. But, the tradeoff is that you are in control of your destiny. That’s something that a true entrepreneur can’t really put a price on.
If you’re thinking about taking the leap, here’s a look at what I would consider to be some of the biggest mindset adjustments you’ll want to make. Having the right perspective is crucial to your success, so you’ll want to get that squared away first. I’ve also included some practical startup tips that you’ll want to bear in mind as you get started as well. See what I wish I knew when I was first starting out.
Overcoming Common Objections
First of all, let’s take a look at some of the most common objections that arise when people are thinking of starting their own business:
- No steady income or health benefits
When it comes to starting a business, don’t feel that it has to be all or nothing. Launching your business on the side is usually the best way to start, even if things seem to be happening at a snail’s pace. I usually recommend that people continue to also work at their regular job, though, when they’re first starting out. So if you have that option, it’s an idea to continue with regular employment until the business can cover your expenses plus more. This way, you’ll have an income and a backup plan in place in case your business doesn’t pan out.
2. Too many obligations (Too much risk)
Another issue that often arises is the feeling that you have too many obligations and that starting your own business will present a financial risk. If this is the case for you, then there are ways to mitigate the risks. Once again, if it’s an option for you, this is something that can be addressed by starting your business on the side, and slowly scaling it while at the same time continuing to work at your job. If this isn’t an option, then consider bootstrapping, starting and growing your business with your own capital to get things off the ground, until you’re able to validate the idea.
3. Don’t have the right skill set (Fear of failing)
Another fear that holds people back, is the feeling that they don’t have the right skill set. But while this might sound legitimate on the surface, it often masks a fear of failing. Skills can be acquired or outsourced. You have to be willing to try new things, and make mistakes along the way. It’s all part of the growth process, so don’t let fear hold you back.
Mindset Adjustments When Making the Transition
- Be Prepared to Work Hard
Are you ready to work hard? I mean really hard. Sure, one of the best things about owning your own business is that you can control the hours that you work. However, the fact is most business owners end up working more hours than full-time employees, especially when they’re first starting up. Some 33% of business owners report working more than 50 hours per week, while another 25% work at least 60 hours. This is especially true at the beginning; until you’re able to start outsourcing tasks.
It’s important to know what you’re in for before you take the leap. Don’t be under the impression it’s all vacations and Mai Tais in the sun. Maybe someday, but not when you’re a startup. Don’t be misinformed.
Few people understand exactly what’s involved with running a startup.
When you’re first starting out, you won’t always have the resources to bring on additional help, so you’ll need to put in the work yourself until you get off the ground. Be prepared to wear many different hats at first. You’ll need to be your own bookkeeper, customer service rep, tech support, marketing director, and salesperson when you’re first getting started.
2. Think Value Added Rather Than Hours Worked
Before you start, make sure you get into the mindset that you’ll be paid for the value you add, and not for your time. This can be a tough mental transition to make, especially when you’re used to being paid by the hour, but it’s important to understand. Constantly ask yourself: what can I do to add more value to my customers? It’ll help you to go far when launching and scaling your business.
3. Don’t Let Failures Hold You Back
Chasing your dream of owning your own business is filled with rewards and challenges. Every business owner makes mistakes along the way, but what separates successful entrepreneurs from everyone else is a healthy view of failure. Instead of viewing roadblocks or failures as a sign that you’re not cut out for the life of an entrepreneur, try to see them for what they are: just a temporary setback on the road to success. Most entrepreneurs will tell you that they had to try multiple times before finding success. Sometimes what we view as failures are actually opportunities in disguise, so be flexible, and open to the prospect of pivoting if a better opportunity arises.
4. Set Clear Goals
Setting goals is crucial, both for keeping on track and staying motivated. Clear goals give you something concrete to work toward. It’s a good idea to write your objectives down, and then break them up into monthly, weekly, and daily tasks. This will keep you motivated, and help to make those big, overarching goals more doable.
5. Take Action
There’s a phrase that you hear every so often: “Don’t talk about it, be about it.” You see this all the time in the world of sports, and it’s true when it comes to business as well. A lot of people talk about the value of ideas; but for the most part, ideas are cheap. It’s your ability to bring those ideas to life, and willingness to put the work in that counts. So outline your goals, make a plan, and start putting the pieces into place. Then take steps to make it happen. Don’t just talk about it, be about it. Create a plan and start laying the foundation today. Remember: done is better than perfect.
Practical Startup Tips
- Find Your Niche
Before you launch your business, you need to identify what type of business you’ll be operating. Many people get their start by expanding their service or craft, but while it can be a good idea to pick a venture that you are passionate about, make sure your idea is feasible for a business, and ensure that there’s clear market demand. So just because you enjoy craft beer, this doesn’t mean that opening a craft brewery is the best business venture to pursue. You’ll want to assess the market, to get an accurate idea about logistics, and supply and demand. On the other hand, though, take care when opening a business in a niche that you don’t know much about. If you aren’t tech-savvy, opening a tech support business may not be a solid idea.
Don’t select a niche market solely because you think it’s trendy or lucrative. Failing to know your niche market will make it more difficult for your business to succeed. Having insider knowledge, however, will give you an advantage.
2. Define Your Target Market
Identify your target market. If you don’t know who your target audience is, you won’t have any way of gauging demand and will have a hard time marketing as well.
So make sure you’re clear on who you’re marketing to from the start. If you are going to sell a custom line of snowboarding jackets, you should focus on marketing in locations that have winter sports and narrow in on age groups that are most likely to snowboard. Likewise, you should make sure your target market will be interested in the products and features that you’re offering.
3. Identify Your Mission
Companies that have a mission have an easier time identifying with and connecting with their target audience. Sharing the ‘why’ behind your business is a great way to connect with your customers.
For example, TOMS footwear’s One for One program ran for years, donating one pair of shoes every time a customer purchased a pair. While the program has recently been retired, it was a great way for the owner to share his mission of using TOMS as a means to improve the world, which also created a way to connect with customers. When consumers share your values or relate to the mission of your business, you’ll win them over more easily.
4. Start Saving
Even if you’re planning to work alongside growing your business, it’s still a good idea to try to set aside some funds to see you through the transition period until your business starts to generate a profit. Even though it’s difficult to save in these current times, you’ll need something to cover unexpected expenses that arise along the way.
Like I mentioned earlier, you may also want to consider bootstrapping when you’re first getting started. This will give you a chance to test the waters, gauge demand, and trial the viability of your business before you sink a lot of money into it.
5. Make Sure You’re Operating Efficiently
Time is at a premium when launching your own business, so make sure you’re not wasting time on tasks that are unnecessary or don’t add value in some way. As a side note, don’t confuse actual value with vanity metrics. Things like page views, for example, are useless unless they’re connected to a bigger goal; and taken into account alongside other data, like bounce rates, conversion rates, and more.
To identify high-value tasks, try tracking where you’re spending your time in a day. Write down where your time is going, and then see if there’s a way to simplify those tasks. You may find that you can automate some tasks, or simplify them in some way. Some tasks can probably be eliminated altogether. Others, you’ll want to consider outsourcing, especially once you start growing.
6. Research Your Competition
Do some research on the competition, so you know what you’re up against, but don’t get distracted. And don’t let fear or uncertainty cause you to never open your doors. At the end of the day, you don’t need to have an original idea, or be the only one selling that product –you just need a way to do it better –crucially, you need to do it in a way that your target audience will consider to be better. A healthy amount of competition can also signal that there’s demand for that product or service, so don’t be too discouraged if you see others doing the same thing.
Before you start your business, take a look at other companies in your niche that have done well. Consider using some of their strategies to strengthen and build your business. If you notice current businesses are failing to meet customer needs, it can demonstrate an opportunity for you to do better. Likewise, if you notice the competition is doing well in one area, don’t be afraid to try some of their methods yourself.
The life of an entrepreneur isn’t always easy, but for the right person, it can be tremendously rewarding. In fact, there will be many days where you’ll wake up and realize that you just can’t see yourself doing anything else. Just make sure you’re prepared to put in the work, and willing to rise to the occasion. Then get to work –when it comes to your own business, your success is (largely) in your hands. And the rewards of freedom, long-term financial stability, and the ability to live life on your own terms, will make it all worth it.
Are you on the fence about starting your own business? What’s holding you back?
