Being your own boss
October 23, 2014 9:22 AM   Subscribe

You work for yourself. How did you get there? What is it like?

I've been fantasizing recently about working for myself, but I am also fairly risk-averse, and I have a hard time imagining actually being able to do it. I imagine not being able to afford good insurance, not being able to support a theoretical family... so I'm curious about how other people make it work for them.

I want to know how you decided to work for yourself, and what steps it took to get you there. I'm also curious about the day-to-day routines of working for yourself, and what issues come up that you didn't expect. Are you happy with your decision? Any regrets?

Anything from dog-walking to owning a store to being a tour guide to freelance writing, I want to hear about it!
posted by showbiz_liz to Work & Money (17 answers total) 38 users marked this as a favorite
Step One: Have enough money saved that you can live off for six months to a year while you make no money.

One day I'll achieve that. If I do I'll let you know what Step Two is.
posted by jeffamaphone at 9:29 AM on October 23, 2014 [2 favorites]

(for a freelance writer)

Step one: work for more than one company as an employee doing the thing you would like to do for yourself. Meet everyone. Make as many friends as possible. Friend them on all of the networks. Stay in touch. NB: Step one can take, like, eight years to do it right.

Step two: same as jeffamaphone's step one.

Step three: Grow sufficiently frustrated with your actual job that you move up your timetable a little. (This step is optional)

Step four: TELL EVERYONE. Don't just change your title on LinkedIn or whatever. Email, facebook, tweet, tell people you are looking to work for yourself and do X kind of work.

Step five: For a while, take every bit of work anyone will let you do. This step blows.

Step six: Realize that you have a few really great clients and a couple lousy ones; gradually it becomes possible to say "no" to the projects from the lousy ones.

Step seven: Save half of every paycheck even though it sucks to do that.

Step eight: OH FUCK, TAXES. Write a giant, giant check. But it's okay--because you can. That is why you were saving half of every paycheck.

Step nine: just keep on keepin' on for as long as the work rolls in.
posted by like_a_friend at 9:40 AM on October 23, 2014 [12 favorites]

I was full-time self-employed for 12 years. The secret is: There's really no such thing as working for yourself. You only get the flexibility to turn down working with people you'd rather not work with. There's still work to be done, every day. And there's lots and lots of unpaid 'meta-work' (researching/billing/reconciling payments/planning marketing/creating pitches/marketing yourself/structuring your business/taxes/insurance) involved. Working for yourself is like having two full-time jobs: one job is to actually do the work, the other is managing the person (you) who actually does all the work.

All of that being said, it can also lead to fantastic flexibility in terms of how you'll spend each hour.
posted by Wild_Eep at 9:43 AM on October 23, 2014 [9 favorites]

I decided to leave my very stable, Monday through Friday job at a big company because I got tired of the general BS of working for a big corporation. I also felt that I was not being offered the opportunities for growth and challenges that I deserved.

Before I took the leap to freelancing full time, I started freelancing as a second job. I made sure I had a big client who liked me, and that hired lots of other freelancers for me to meet and network with. I also had A LOT of money saved. I had over six months of living expenses available in cash, and more in investments as a Plan C. I reached out to my freelance client and asked if there would be more work for me if I wanted it. When they said yes, I took the leap. I have only been out for a year, but so far, so good.

Wild Eep is right in that a lot of your time will be spent managing your business, especially in periods where you are looking for more work. I typically need an afternoon per week just to catch up on phone calls, paperwork, and all the other stuff that your boss used to take care of for you.

The best part so far is that I am getting to do lots of different types of work, working for less time, and for more money. The instability and additional hassle has absolutely been worth it.
posted by soy_renfield at 10:03 AM on October 23, 2014 [1 favorite]

Self-employed as a consultant for 20+ years, and never looked back (except to pity the people who were still working at my former employer).

Step 1: Figure out what you want to do, then do the math. Can you earn as much as you want/need without working more than 40 hours per week? Do you have enough money saved up to support your lifestyle while you build the business? Your daily expenses will change, especially if you'll be working from home (e.g., dry cleaning and vending machine expenditures will go down, but your toilet paper consumption will go way up). Figure all that in. Find out what COBRA will cost you, versus getting health insurance through an exchange. Will you need business permits? Do you need to pay an accountant? What will it cost to incorporate, if you deem that desirable?

Step 2: Plan your business, on paper or in your head. It'll have to be on paper if you will need to secure a loan, investors, or a line of credit. Otherwise, it doesn't need to be written down. But figure out how you'll get clients/customers, what your selling points are, and so forth. The contents of the plan will differ wildly depending on whether you're starting a consulting business, opening a store, or beginning a manufacturing concern. Get help from mentors, advisors, friends, etc. as necessary. Don't shortchange this step, even if there a number of unknowns. It's just as important to identify the variables as the certainties.

Step 3: Try to launch and build the business as much as you can while still drawing a paycheck from your employer. That greatly reduces the perceived risk. Keep track of all the associated expenses so you'll be able to deduct them from your taxes.

Step 4: When the business is solid enough to replace a substantial portion of your salary, or you get fed up enough with your employer/job/boss, hold your breath and turn in your resignation.

Step 5: Work like a dog and have more fun than you ever thought possible.

Your day-to-day life as a self-employed person depends heavily on your chosen field. In my case, consulting largely from home, my time is my own. I work when there's work to do, but have the flexibility to go shopping in the middle of the day if I like.
posted by DrGail at 10:11 AM on October 23, 2014 [1 favorite]

I work for my father's construction company, which he started when I was 11 years old. I know this isn't a first person account but I have been with him for 4+ years and we have talked a lot about the early days and I'm entrenched in every aspect of running the business, so here goes:

For him it was a matter of necessity. He had a great job working as a project manager for a company who were building a large residential subdivison. Company went bankrupt and all of the sudden he was 45 years old and unemployed with a wife, two kids, a mortgage, no university degree, etc. He couldn't find anybody willing to hire him, so he struck out on his own almost immediately. That was in 1990.

He came up with a business plan first. It's handwritten (he didn't even own a computer back then) and only a few pages long. He had a clear idea of what his strengths and limitations were. He also sat down on a regular basis and reviewed the books to see if he was making money, if it was all worth it, where he was undercharging for work, etc. From there he just kept going. As he told me, he really didn't have a choice but to make it work.

There were quite a few lean years (7-10 perhaps) until he really started making enough to save for retirement, savings, pay off the mortgage, etc. We didn't want for anything, but my folks were quite frugal in those days. Zero vacations and few nights out. We, his children, were fully aware of the financial situation. Sometimes in the first couple of years, if there was no money to pay a supplier, he would call them up and work out a payment plan. Dad always kept his word and nobody ever found themselves unpaid. He did everything himself for many years. He coordinated the work on job sites during the day and did the office work in the evenings. To put it in perspective, we now have Dad plus three full-time people and one part-time person who do what he used to do all by himself. Even though our annual sales are higher now, it was still a ton of work for one person. He never complained. He just did what was needed to support his family and become financially independent.

In the early days, there was very little work. Setting himself apart from the pack is what did it. He told me about a job he bid back in the early days. Probably the biggest job he'd done at that point (and something we would consider small stuff these days). He met the customer at their home and there were two other contractors there. He got the job. Years later on another project, the customer asked him "Why do you think I hired you for that job?" Dad said "Because I was the lowest bidder?" The man said "No, you were not the lowest. It was because of the three of you who showed up that day, you were the only one who seemed genuinely interested in what WE wanted. You didn't just start taking measurements. You listened to us." I'm paraphrasing, obviously, but Dad took that conversation to heart.

Employees, subcontractors, and suppliers were always treated fairly and with respect. One of our long term employees is leaving us to take work closer to his home community. He commented to me that he had never once seen my father get angry or raise his voice in the sixteen years he worked for us. Dad is friendly and professional at all times. He has a reputation as a good businessman and a lovely human being. He demands high quality work from our employees and subcontractors and our reputation reflects that. The company has grown significantly since then and we're doing really well. It was a long road but I could not be more proud or grateful to him for what he did for us.

I would ask him if he's happy with his decision and if it was worth it but I'll have to wait until he calls me from his house in Florida, where he and my mother spend 3-4 months a year now.
posted by futureisunwritten at 10:15 AM on October 23, 2014 [10 favorites]

Freelance writer and editor here.

I decided to work for myself in part because so much of my workday was being wasted on unproductive meetings, dealing with frustrating bosses and getting stuck with some projects that … well, let's just say they were a bad fit for me.

As the others have said, save up as much money as possible ahead of time. Also consider the other side of the ledger. I cut my overhead drastically, in part by moving to a part of the country where it is much cheaper to live. Not everyone can do that, but my work can be done from anywhere and pays the same regardless. I try not to spend a penny on things I don't need.

I also started out targeting clients very similar to the place where I had been on salary. That's the market I knew best, and I had some street cred. I knew how much work I'd need to get, and where I'd be likely to find it.

One big difference in flying solo is that your primary job is to run the business, which can include a lot more than the Thing your business is all about. You get to do Thing, of course, but you also are the marketing department, the billing department, the IT department, the office administrator, etc. You put in a lot of non-billable hours. That's not necessarily bad or good, just be aware that it comes with the territory.

It does take self-discipline, especially if you do not have to meet or call people at specific times. I treat it like any other serious job, sitting down at the desk at a regular start time and wearing clothes that I would not be ashamed to be seen in outside the house. I have a work space that's just for work.

It's not paradise. I don't have the luxury of working only on projects that greatly interest me. Some clients can be as frustrating as some of my old bosses. But I can say no when I need to. I'm not an employee; I'm an independent business. I can flex my schedule as much as I want so long as the work still gets done.
posted by Longtime Listener at 10:28 AM on October 23, 2014 [1 favorite]

There is an argument for not over-planning.

Nine years ago the company I was working for folded. I immediately struck out on my own. I made it work because I had to pay rent.

For me, what makes being your own boss viable is not how good you are at your job -- let's just assume you're good at your job -- but how well suited to and capable you are at everything that goes into making a business a business. That's usually sales, marketing, networking, etc.
posted by DarlingBri at 12:04 PM on October 23, 2014

I got fired from Cubicle Hell back in 2005. They sure took their time about it...I wanted to be out of there months earlier, but that game plan didn't pan out.

Anyway, my hatred of bosses (and of being bossed) is of such a magnitude that it can be detected via Geiger counter. I vowed never to work for a pair of pants again, and what I vow stays vowed. I became a professional dog walker (lowest overhead of any new business, I think) and my bizz will be ten years old next year.
Up against the wall, Oppressors everywhere!
posted by BostonTerrier at 12:07 PM on October 23, 2014 [7 favorites]

1. Get skilled in full-time employment
2. Build social media presence, blog, github repository, whatever to show your portfolio work and exercise thought leadership. Preferably do this on your employer's time
3. Save money
4. Network
5. Line up your first client (or at least have some very warm leads)
6. Quit full-time job (or get laid off, unfortunately in this circumstance you do not have the opportunity to do 3 and 5)
7. Work on your brand and social media presence
8. Land a client
9. Get a good accountant and futz over paperwork, insurance, etc

Iterate on the following:
- Do work
- Find next client while doing work
- Invoice, taxes, accounting, etc
- Refresh social media, etc
- Network
posted by crazycanuck at 12:27 PM on October 23, 2014 [2 favorites]

Also, register your d.b.a. ("doing business as") business name. County clerk's office, I believe.
Business cards, letterhead, and crazycanuck's suggestion of a good accountant is key! Mine specializes in small business.
Keep good records so as to not cause your newly-aquired accountant to tear her or his hair out.
posted by BostonTerrier at 12:35 PM on October 23, 2014

The great thing about your worry about having to support your theoretical family is that... they're theoretical. If I first started working for myself and thought "but wait, some day I will have a spouse and many cats," well, I never ever would have done it. And then I'd be SAD and TERRIBLE.

I cannot imagine ever having a job again, although I certainly might! There's boom, there's bust, there's tears, there's naps in the middle of the afternoon. It's great, and horrible, and harrowing, and hilarious. I'd say you can't go wrong, but of course you can! But then you'll dust yourself off and get back on the horse.
posted by RJ Reynolds at 1:09 PM on October 23, 2014 [1 favorite]

You work for yourself. How did you get there? What is it like?

By a long, torturous route. But it's definitely getting better and I don't expect to ever go back to a corporate job.

Like you, I am pretty risk averse. While still a homemaker, I spent a lot of years reading books about being self employed, taking free classes from the local Chamber of Commerce and things like that. That background knowledge was and still is helpful, but for the longest time, it failed to turn me into a self-employed person -- in spite of, yes, registering a business name and opening a business bank account at some point.

All of that stuff is the trappings of business. It can become really critical to have those things -- but mostly after you actually have a business. Before that, it can be a little like playing dress up: Fun, but sort of purposeless.

The main thing you need in order to have a business is paying customers. If you do not have that, all your plans and hours worked can amount to essentially a huge time sink of a hobby.

Two things that have helped me enormously with figuring out that critical piece of "show me the money" are a) doing freelance work through a service and b) collecting recyclables to supplement my meager income.

Doing freelance work through a service means I am responsible for a lot of the meat of self-managing my work, but they do things like bill customers so I get paid. There has been a very long growth curve there for me. All the A's and academic honors and shit like that from high school and college never taught me what I really needed to know to do independent work that someone will pay you for. It taught me to be a good student, but it taught me nothing about how to make money (or even get a job, but that's another story and not relevant to your question).

Collecting recyclables has been a huge education in things like opportunity cost and whether or not doing this work is worth the pay involved. The pay is pathetic, but if it isn't competing with other things, it is better than making nothing at all. So I have learned a helluva lot from that.

I spent a lot of years trying to figure out how to make an income on the side or whatever while married and, later, while working a corporate job. And I honest to god believe there was something about being a full-time homemaker and, later, a corporate drone that actively interfered with the thought process necessary to making money in a self-employed fashion. If you can manage to develop a side income that has the potential to become a full-time business while still employed, that is the conservative way to go. But that never worked for me and I finally just quit one day, on a day when (for various reasons) I felt clear "it is now or never." (I am not recommending that as a method.)

So, from the school of hard knocks, a few thoughts:

a) Look to your health.
When you are self employed, if you aren't working, you aren't getting paid. There is no sick leave, no FMLA, etc. If you make enough money to take time off whenever you please, fantastic! But early on, you probably won't be in that position. So start now with eating right, exercising, and having good sleep hygiene.

b) If at all possible, find something to do independently now for money. Make it your goal to be doing something independently for money by the end of this month. Sell crafts at a local bazaar or online. Sign up for a freelance service. Put up flyers for tutoring something. It doesn't matter what it is. It honestly does not matter. But if you always worked for a wage, then you need to learn a different way of thinking about your relationship to money. And the best way to learn that is by doing it. Putting in the time and effort and making nothing is a huge education and can help you finally screw up your courage or do whatever it is you personally need to do different that you never knew was a problem before then. Everything before the point where you figure out how to make money at it is just theory.

c) It's also cool to do things like read those books and take those free classes from the Chamber of Commerce and find a forum to hang out with other like-minded entrepreneurial types and so on. Just make sure you are doing those things in addition to making money independently at something and not in place of making money independently at something. When you are risk averse, it's extremely easy to spend years and years preparing for someday being self-employed. But at some point, either the rubber hits the road or you just have a hobby and pipe dream.

So I will suggest you skip "preparing" for it and just go do something to make money independently in the here and now, and sort out for yourself over time how to fully transition away from your job on terms you find palatable. (I did more or less succeed at that: One of my goals was to quit my job rather than end up fired. I did quit and was not fired, though I also kind of felt like circumstances forced my hand with regards to timing and some other details.)
posted by Michele in California at 1:57 PM on October 23, 2014 [2 favorites]

Once upon a time, some years ago, a friend told me that a bookstore in the cutified section of town was for sale. I had been working in bookstores, so I knew a certain amount about them. Reader, I bought the business. I met with the broker selling the business; he had enormous teeth. I met with the local rep. of the Small Business Administration; incredibly helpful, they gave me a Pro-forma Profit/Loss Statement, and the advice "Fill in your own income 1st." I labored over that spreadsheet, with pencil and eraser and calculator, as this was in the days, O Best-Beloved, before personal computers were readily available. I met with everyone I knew who owned a business or who had business expertise. I came up with an offer; they accepted it, and within a month of hearing it was for sale, I owned it. (Seller loaned 1/2 of the purchase price, family loaned the other 1/2.)

It was a risk, but it was a calculated, well-researched risk. I learned an incredible amount. Learning is really fun. I worked my tail off. I didn't have reliable holidays, as retail businesses are busy on holidays, especially in November & December. I didn't take vacations, except for a few days to go to my brother's graduation. I didn't have reliable sick days; I once had to close the store for a couple hours because I was the only one working, and I had cramps so bad I was throwing up. Buying health insurance as a small business sucked a lot. The store did well, and I doubled sales in a 4 year period. I was able to pay myself a decent wage. Working in a bookstore in a pleasant area is an excellent way to live, esp. in the days before Amazon.

In the early 90s, no bank would loan me money to buy a house, because I was self-employed. I got married, I got pregnant, and I didn't want to be self-employed with a baby. I sold the store profitably.

It was a completely worthwhile experience. I learned a lot, I made an income, I lived well. It was fun a great deal of the time. Unless the fuckers on the Right take it away, health insurance is available and pretty affordable. There's probably not money available to borrow from banks, but if you have a good business plan, you should be able to hustle up a lender. Make a plan. Do research. The answer will be made clear to you.
posted by theora55 at 2:43 PM on October 23, 2014 [2 favorites]

The most important thing I've learned is this: From 9am to 9pm is people time. Call people, talk to people, work with people, sell to people. Before 9am and after 9pm is paper time. Do paperwork, balance the books, plan the next day and week and month and year. Outside of people time, you're the boss, planning the work. During people time, you're the employee, working the plan.
posted by The Almighty Mommy Goddess at 3:00 PM on October 23, 2014 [3 favorites]

My husband and I own a small specialty retail shop. We opened in 2008 and we're still here, so we must be doing something right.

The Downsides
  • Massive financial investment: rent/mortgage, capital improvements, business systems, inventory, it never ends
  • Stress. If you go down in flames, it's YOUR FAULT
  • Separating work from personal time: my friends know where I live but my customers don't. Friends != customers, and vice-versa
  • Jack of all trades, master of none. AKA: Chief Cook & Bottle Washer. No matter how good you are at doing $thing, you will spend at least half your time doing not-$thing. I spend more time doing bookkeeping, writing ad copy, sorting our insurance and dinking around in the database than actually doing my $thing
  • Be sure to make any credit purchases (house, car) before you go out on your own. You won't be able to demonstrate income for a couple of years and credit is very hard to come by for the newly self-employed
The Upsides
  • I take my dogs to work with me
  • My co-worker is the best in the world (my husband!)
  • I get to set the BS level. I held related jobs elsewhere in my industry before we opened our shop and this weirdo stalker guy kept bothering me. I couldn't 86 him because my bosses wouldn't permit it, no matter how creepy he was. A week after we opened weirdo stalker guy showed up in my shop. I politely told him to GTFO and not come back. That felt SO GOOD.
  • Flexible schedule, to a point. Freelance editing would be more flexible than our retail shop so YMMV with the enterprise Feel free to MeMail me any specific questions you have.

posted by workerant at 7:21 PM on October 23, 2014 [1 favorite]

I had a good job that sucked. That is to say, I think I'm pretty good at teaching ESL and my students like me and do well, but my boss was pushy and I was on a visa which didn't permit me to change employer. So we decided to start our own school, and Do It Right.

What changed:
  • No more paydays. Money comes in when clients pay, not when you need it, and not predictably. It goes out pretty predictably, though.
  • Chief cook and bottle-washer. So much! Finding clients, buying adverts, deciding how many textbooks to buy before knowing how many students will come, organising groups of busy people to all be in one place at one time, tax-compliant receipts, keeping the floor mopped, building the bookcases. Any time in your job where you start a thought with "someone should" is now a time when you are that someone.
  • I choose who to work with. No under-12s, no dogs...
The good definitely outweighs the bad. Taking a holiday when you decide to, having no uncertainty about goings-on in the business, and getting all the money you earn are all huge pluses.

The bad is that it's bumpier. Employers that suck mildly all the time and pay all the time are good when you need stability. The other big problem is that you have to deal with all aspects of everything all the time. The weird clients that your boss filtered out, the non-payers that accounts would chase up - all yours!

I quite like having different roles, designing things, taking care of the site, teaching, and interviewing new clients.

I don't like organising classes, books, and paperwork.

As far as Doing It Right goes, I think we're doing a better job, but I find myself empathising more with my former boss about some of the decisions which I disagreed with at the time.
posted by Wrinkled Stumpskin at 6:21 AM on October 24, 2014 [1 favorite]

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