Nearly a year ago, thoughts of becoming self-employed were about to become a reality. What began with brief comments to my wife led to subsequent discussions followed by countless hours, spreadsheets, and sleepless nights mapping out a business plan. As a financial planner, I take great pride in putting together a road map for people to follow to achieve financial independence. But this time, things were different. This time, the road map was for my family!
As I reflect upon the past year, I can honestly say I have few regrets. Do I miss the interactions and camaraderie that existed at my previous employer? Absolutely! Shortly into my new venture, I realized being self-employed can be very lonely. However, as I mention below, I had already anticipated this feeling and had a strong support system in place to combat it.
My goal with this post isn’t to provide a step-by-step guide on starting your own business. Rather, my hope is to communicate three lessons I’ve learned this past year that may help as you consider becoming self-employed.
Your Support System Is Crucial
Perhaps the most important thing for anyone to asses prior to starting their own company is their support system. Whether this be family, friends, or a professional network, I promise you will need this group more often than not in the early going. As a business owner you will experience many highs and lows, some of which come a matter of hours apart! And for some reason, when you first begin, the lows seem to be more memorable than the highs.
Personally, I’m fortunate to have a supportive wife. Her willingness to listen, even to things that probably go way over her head, has been very important this past year. As a nurse, her professional experiences have nothing to do with financial planning, but her unique perspective has helped keep me grounded and on-track.
My support system doesn’t stop there though. Being part of NAPFA and the XY Planning Network has enabled me to stay connected with like-minded professionals. In addition, last fall I was invited to join a peer-group consisting of other fee-only financial planners at similar stages of their career.
Surrounding myself with these supportive groups and individuals has provided valuable resources to help me navigate the challenging moments. In addition, it’s provided me with other professionals to celebrate the victories with! Make sure you have a strong support system when deciding to become self-employed.
Understand the Secondary Tasks of Your Business
It’s safe to assume someone contemplating self-employment understands the primary function of their business. For me, financial planning and investment management are my primary responsibilities. However, not all of my time is spent focusing on these two things.
As you consider becoming self-employed, be careful not to let the excitement of your primary function completely overshadow the realities that exist when you own your business. Regardless of what your primary function is, there will always be equally as important secondary functions that require your time and energy. It’s these secondary functions you must identify and be comfortable with.
For example, who will handle your bookkeeping? What about IT? If you’re a service oriented business, what about scheduling? For me, I scan a lot of documents and have various other administrative responsibilities. I enjoy some of these responsibilities more than others, but all play a vital role in my business.
There are certainly some functions you may outsource to other trusted professionals, provided you have the financial resources to do so. However, when you’re self-employed there will always be some things left on your plate to tend to that you may not enjoy as much as others. Make sure you understand the secondary tasks of your business and are comfortable with what each entails.
Greater Flexibility Requires Greater Discipline
As someone with a young family, the concept of having more flexibility seemed very appealing as I contemplated self-employment. No longer would I have to put in the traditional 8:00 a.m. to 5:00 p.m. (does that really exist?). I’d be able to plan ahead and attend school functions, have a long weekend here or there, and even grab breakfast with my wife!
Admittedly, the flexibility has been a great blessing to my family. However, I will be the first to tell you it’s not for everyone. I now understand that greater flexibility requires greater discipline.
In 2009, when I tried a slightly different venture, I had no idea what this really meant. The additional flexibility quickly led to unproductive work days. And those unproductive work days led to a failed venture…for me at least.
It’s important not to confuse flexibility with working less. “Work smarter, not harder” is a statement one of my first bosses preached many years ago. While it’s been engrained in my mind ever since then, now that I’m self-employed I am fully embracing that concept!
I’ve probably worked more this past year than I did in years past. However, being able to better control my schedule has already presented wonderful opportunities for my family.
In summary, being self-employed isn’t for everyone. At times, there’s something to be said for a more traditional employment setting where your main responsibilities are clearly outlined in your job description. But don’t let that stop you from pursuing a dream. There will always be those that doubt your abilities or plans, but don’t let that hold you back either. Determine whether self-employment is right for you by seeking the support of trusted individuals or a peer group and considering some of the lessons I’ve learned.