Business Startup Tip: Recognize, Capitalize On Opportunity

Let Your Dream Of Self Employment Take Flight

Getting a job has been so culturally conditioned in our psyches that it’s almost inconceivable to think about being self-employed. Think I’m wrong? Exaggerating?

Consider your friends and family. How many are self-employed? Now, think about your high school or college classmates. How many chose to work for themselves?

If you are like most of us, you will come up with only a handful of individuals. Why? Because self-employment was not typically presented as an option for a working life in the last 50 years.  Now, it’s satisfying to see that colleges and universities are starting schools of entrepreneurial studies and at least giving students some insight into another viable, occupational alternative. 

To prepare you for the transition from employment to self-employment, there are a few key changes you will have to make in your thinking and outlook.

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___________________________________________________________________Understanding Opportunity. 

For many in the working market, or about to enter the market, opportunity is defined as security. The aim of many of these people is job security, or at least the promise of a stable work environment and a regular paycheck. This really isn’t opportunity; it’s a situation. In a more vintage version of a job description, it was said that one was looking for a situation, with the implication that you want to settle into your job/situation: one that will sustain you for years to come. Then, there is self-employment. When you are self-employed, you are driven by the opportunity, not the situation (think America, Land of Opportunity). Your “situation” is the enterprise that you create to capitalize on opportunity. Security is not the sole objective of creating an enterprise, but can be the by-product of pursuing that opportunity.

Retrain Your Brain

 In order to recognize and capitalize on opportunity, you need to first retrain your brain. Stop thinking like an employee and focus like an enterpriser.  When you see an opportunity, figure-out how to marry this chance with your talents, resources and products. Our conditioning – especially for those born and raised in the years since 1945 – has programmed us to avoid free thinking when it comes to careers, occupations or employment. For many of us, our collective experience in preparing for working life— from parents, elders, educators, counselors— has been to focus on obtaining a situation within a large organization. Corporations, governments, health-care institutions and similar organizations have been the suggested end points for young people seeking employment for as far back as I can remember.

View Yourself and Your World in a New Way 

As mentioned above, a large part of the transition to self-employment involves changing those neural pathways that were cut over decades. First, you  must learn to think like an entrepreneur, or perhaps a better word might be enterpriser. By this term, I refer to someone who views work as a series of opportunities. An enterpriser can still have a career— that is, working in one profession for a lifetime. The difference is that this career will be punctuated by a series of opportunities.

Know Your Business. 

Be sure to do your market research and get a clear picture of what you can expect. For example:

  • If you’re launching a product/service in an established market, then the task of introducing your brand may be easier and quicker to start earning.
  • If you’re entering a mature market that has a crowded marketplace, expect that it may take time to break through and begin earning.
  • If you’re introducing a new product/service, or even a new approach to a traditional product/service, you will have to educate prospective customers/clients before you can sell to them. This takes time.

Get Frames of Reference. 

Talk to business owners and managers who operate enterprises similar to yours. Find out how long it took them to succeed. Ask about problems/issues that they encountered. If you have realistic examples to draw upon, you will have realistic expectations for your enterprise.

Launching a new enterprise and hiring yourself for the first time is a daunting task. However, if you go into this task well-prepared, the angst and anxiety of the unknown can be minimized. Here are a few things that you can do to help you reduce the stress of converting from traditional employment to self-employment.

 

Build Your New Business On A Solid Foundation: Get Good Legal Counsel At The Start

It’s more tempting than ever to handle the legal set up of a new business yourself. Online forms. Web-based business entity registration. You have enough start up costs, so why not save money on legal fees now when your business is small. You can always hire a lawyer later to fine tune the details—right?

Not exactly.

“In the decades that I’ve been counseling and coaching business start ups I see people make this mistake over and over,” says Peter Ancone, self employment blogger — https://createyourdreamjob.com — and book author and lecturer on self employment. “Setting up a business is more than registration. You need to know what kind of business entity best fits, and will continue to fit, your business model in the future.”

The corporate entity documents you file will define your enterprise as it grows. Whether it’s an Operating Agreement for an LLC, or a Charter and Bylaws for a Corporation, business start ups often make their first mistake by trying to handle these steps themselves.

“When this happens, the owner manager of the start up doesn’t realize what went wrong until it’s too late. These business governance documents will set the procedures, and parameters, for running your businesses,” explains Stephen J. Labroli, Esquire, business law attorney and Partner in the Delaware Valley law firm of Leonard, Sciolla, Hutchison, Leonard & Tinari LLP (https://www.leonardsciolla.com/news/).

 

Stephen Labroli practices in the firm’s Business Law and Commercial and Civil Litigation practice groups. He is admitted to practice in both Pennsylvania and New Jersey.

Which business entity form fits your enterprise?

At this point, you should have considered which legal entity your enterprise should be. Below are the types of legal entities you should be considering.

Sole Proprietorship

A sole proprietorship is the most basic type of business to establish. You, alone, own the company and are responsible for its assets and liabilities. Learn more about the sole proprietor structure.

Limited Liability Company

An LLC is designed to provide the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. Learn more about how LLCs are structured.

Cooperative

People form cooperatives to meet a collective need or to provide a service that benefits all member-owners. Learn more about how cooperatives are structured.

Corporation

A corporation is more complex and is generally suggested for larger, established companies with multiple employees. Learn more about how corporations are structured.

Partnership

There are several different types of partnerships, which depend on the nature of the arrangement and partner responsibility for the business. Learn more about how these are structured.

Whichever entity you choose, make sure you hire a qualified attorney to form the entity. I have seen many enterprises end up with a truckload of troubles because they failed to spend the money needed to obtain good legal advice.

Are You Ready For Self Employment?

Assessing Your Core Skills and Personality for Success In The Self Employed Life.

For most of us, our working life impacts our daily life in many ways. Often, it determines where we live, when we sleep or eat, how often we see our family, or even if we can have a family, the quality of our life, as it relates to income and earnings, and the quality of life as it relates to personal time. These are very strong and attractive reasons for hiring yourself or starting a business. So, now you’ve done your homework, evaluated your product/service, matched it/them to market opportunity.

You feel strongly that your enterprise idea is a sound one and that the self employment life is attainable. The next question is: Do you have the core skills and temperament to do it? This is often where some new enterprisers drop the ball. They are frustrated with their current working situation, or they see a great opportunity and get caught up in the moment, moving ahead, into the self-employed life, without a thought of their personal suitability.

Here are a few key points you need to consider. If you answer in the affirmative for most of these, then you may make a good candidate for self-employment.

Results Matter to You. If you are ready to lead and focus on getting the job done, you will most likely do well as an enterpriser. Not so valuable, however, is obsessive tinkering or perfectionism. Success in self-employed enterprises depends on productivity and efficiency.

You Are a Proactive Person. If you are a planner, and the kind of person who sees opportunity and acts on it, then you possess one of the most important qualities for self-employment. If your personality is more reactive than proactive, or if you are one who prefers to let others take point, then you will be better served in a conventional job.

You Believe in Working Smarter, Not Harder. It has become fashionable to brag about working long hours at the job, and billing a high number of hours. This is fool’s gold that people wear as a badge of honor. Being a beast of burden is not an honor, it’s a slight. 

You Want to Benefit Directly from Your Ideas and Work. If you’re going to be putting in the time and effort, you should reap the full reward. For others, the trade-off of their time and talent for a regular paycheck is sufficient.

You Want the Opportunity to Determine Your Income. When you are self-employed, you are not limited to a salary set by your employer. Your earning power is, for the most part, in your hands. Of course, there are other factors such as market conditions and competition, which can impact your earning potential. Still, the sky is the limit in terms of what you can do to improve your earning situation. 

You Aren’t Afraid of Risk. It takes money to make money and business is risk. If you cannot handle risk, or if you freak-out about losing money, don’t even consider self-employment. Whether you are a contract-for-hire 1099er, or you run a full-blown business operation, it’s likely that you are going to lose money at some point. If you are the kind of person who cannot put such things behind you, then you’re better off in a traditional job.

You Are Disciplined.  Success as a self-employed enterpriser requires a dedication and focus that is internally driven. In most situations, you will be the person determining the schedules, deadlines, key points of completion, etc. This is good and bad. While you get to choose how and when the work gets done, it also leaves opportunities for procrastination and goofing-off. It’s essential that the self-employed individual hits his or her marks, setting regular goals and adhering to them. Whether you work alone at home, or you have a business with employees, it’s vital to maintain a working discipline.

You Are Resourceful.  Over the years, I have observed that when posed with a difficult problem, many people will point out the obstacles to solving the problem. I have also noticed that enterprisers, when posed with a similarly difficult problem, tend to focus on the solutions to the problem.  In the end, both may find the answer, but the typical self-employed person steps forward with ideas and support. Many employees have been conditioned in the cover-your-ass mode, and often, the first things from their mouths are reasons why they might fail. The enterpriser is oriented toward challenges and finding answers. 

Personality Types Who Should Probably Avoid Self-Employment

Procrastinators: Without someone forcing them to do their job, they will put off work until it drives them out of business and self-employment.

Perfectionists: Beauty may be in the details, but the obsessive pursuit of perfection will reduce productivity and lead to a loss of profit.

Poor Time Managers: People who lack the ability to efficiently manage both short- and long-term time will struggle to remain successfully self-employed.

Poor Planners: Those people who prefer to “wait-and-see” usually do not work well in a self-employed environment. Being an enterpriser means being proactive, being a dreamer/schemer (I mean that in a good way) who systematically seeks opportunities, then develops strategy and tactics to capitalize.

These are some of the personal considerations and assessments that you should make regarding your ability to start and sustain a successful self-employed enterprise. If you feel you have the capabilities to do so, then read on and learn the steps you will need to take to make this dream a reality.

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Learn more about self employment in my book, NEVER WORK A DAY IN YOUR LIFE.

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