Hey there, time traveller!
This article was published 21/2/2015 (1734 days ago), so information in it may no longer be current.
Frankly, I never did think of myself as being self-employed and/or being an entrepreneur, but here I am, all these years later.
To be honest, I simply needed a new challenge, and the only way I could get it was to go out on my own.
And, according to the latest labour-force survey published by Statistics Canada in January 2015, approximately 41,000 individuals had the same idea as they, too, moved into self-employment.
This represented a 2.2 per cent increase and was the biggest increase since December 2011.
Who are these new entrepreneurs? What is the nature of their business? Overall, in the past year, women between the ages of 25 and 54 represented the largest growth of new entrepreneurs. The next-highest growth saw men over 55 moving into self-employment. In terms of industry sectors, most self-employment was found to be in professional and scientific services, health care and construction.
While I know many individuals become self-employed due to job loss, I also find others envision and fantasize about entrepreneurship as their freedom and independence from management. While that may be true, to some extent there is also a downside to being an owner, and you have to be prepared for this as well. For instance, while you think you will have more control over your work, it will really be your customers who dictate your work schedule. And without customers, your business will not survive. The biggest challenge I see new entrepreneurs facing, especially those who go into the professional-services sector, is they don't recognize how important business development and marketing really is to the success of their business. Creating a steady stream of customers can create significant stress because as a sole proprietor, you are working in the business, managing the business and finding the business.
Not only that, you are completely in charge of your own time management. You need to keep track of your time so you can appropriately charge your client and make sure you don't spend too much time on any one project. In the entrepreneur, self-employment game, time really is money.
Also, when you think about managers feeling lonely at the top, I can tell you small-business owners can experience loneliness, as well.
Not only that, before you know it, you are spending less time with your family because you are working long hours to meet client deadlines.
And there are no large staff events where you can socialize with colleagues; you have to create your own fun. Thankfully, there are clubs and other associations where you can create friendships and support.
Another challenge for new self-employed individuals is the importance of managing the administrative part of a business.
Most important, of course, you need to invoice your customers on a timely basis. Neglecting this means the money is in your customer's pocket instead of your own. You also need to ensure you have written, signed contracts and maintain proper accounting processes.
Typically, administration isn't the favourite task of a self-employed individual, and so it is often neglected, leaving you scrambling at the end of the year.
Just because you can become a self-employed entrepreneur doesn't mean you should. Success requires you have the right skills, the right product or service, the right target market and the right reasons. Some of the skills that will ensure your success are as follows:
Financial management — You have to understand all of the financial aspects of your business, from invoicing in a timely manner and collecting your receivables to documenting your finances appropriately. Cash flow is the name of the game. As you grow, hire a professional accountant as you will be too busy doing other things.
Marketing and selling — Getting out in the field and getting known for your expertise and/or your product is what will bring you new and dedicated customers. Of course, using social media might help, but being successful as an entrepreneur means creating relationships. People want to buy from those they know and trust. Wear a marketing hat at all times.
Time management — OK, you are now in charge of your own time. Be sure to schedule yourself so you balance marketing/selling with doing the work. Search out time formulas for your industry sector. For instance, a consultant will slot three hours for one meeting. This includes preparation, holding the meeting and debriefing when you get back to your office.
Skill confidence — You need to be known for doing good work, so be sure to keep your skills at their sharpest level. Join a professional or industry association, take additional courses or become certified in specific programs and/or services. Use these to market your uniqueness.
Positive thinking — Never take no for an answer; in fact, the word no, simply means not now. Learn to accept rejection doesn't mean you are a poor salesperson, it simply means the fit with your client wasn't there. Believe me, if there isn't a good fit to start with, you won't be successful anyway, so it is best to avoid those situations.
Problem-solving — Being an entrepreneur means you have to solve your own problems, and if you have staff, they are counting on you. Develop a problem-solving framework and use this with every issue that arises. Don't let rejection, setbacks and unforeseen obstacles get you down.
Engage in training — The Entrepreneurship for Dummies book has been written, but I still recommend attending hands-on coursework to develop the skills needed to run your business. If you can, attend a full-time program where you will learn all about every element of owning and operating a business. This includes how to write a business plan, get a bank loan, managing human resources, managing your financials as well as marketing and selling. Several of the full-time programs also offer personal coaching over a period of time.
Many cities have a business enterprise centre operated by either the federal and/or provincial governments. These centres have excellent resources and often offer courses and coaching. Take advantage of everything you can to learn all the aspects of your new business.
Entrepreneurship can be exciting and fun, but it is also very hard work. So, before you jump into the game, be sure you have researched your field, analyzed the market need for your product/service and prepared your marketing and business plan. Then get out in the marketplace, develop relationships and have fun.
Source: Labour Force Survey, January 2015, Self-employed lead job growth in Canada, Globe and Mail, Feb. 7, 2015.
Barbara J. Bowes, FCHRP, CMC, CCP, M.Ed is president of Legacy Bowes Group and president of Career Partners International Manitoba. She is also a radio host, professional speaker and author. She can be reached at firstname.lastname@example.org.