Elements of Successful Self-Employment

I have been self-employed for most of the last 25 years. Personally, I find self-employment to be critical to my psychological and financial well-being. Some people need structure, co-workers, and a boss to tell them what to do, however for many people, self-employment provides the creativity, flexibility, and challenge that can allow them to be successful beyond their wildest dreams. Here are some things to consider if you want to be self-employed:

• Choose a business structure that can protect you, such as an LLC. Corporations can get complicated and sole proprietorships usually don't provide enough protection.
• Don't have employees. They are expensive, and as one writer said, easy to get but hard to get rid of. If you need additional help, consider using contractors--people who own their own businesses just like yourself.
• Do something you love to do and that you do well. Picking a field because it is the current "hot" industry or because you think you can make loads of quick money is a quick way to business failure. Choose something you will enjoy doing even when you hit a rough patch.
• Get some clients. An intricate business plan and a great business idea are nice but the bottom line is you need to make money from this venture. In order to make money, you need to find people who will buy the product you are offering. Without clients (the people who will pay you for your product) you will not have any income!
• Keep overhead and expenses as low as possible. A home-based business is a great idea. Getting caught up in a commercial lease, furnishing your space, and paying for the rest of the business infrastructure (phone lines, fax lines, internet, etc) can run through your start-up cash in a heartbeat.
• Have money in savings to start your business. Many businesses fail due to lack of funding, especially during the first year or so. Of course, save the money you need to get started before you launch your business and don't use loans and credit cards because then you will be responsible for covering these debts as well as your regular business debts.
• Become a salesman. No matter what your business is, one of your primary tasks will be to sell yourself and your product. Although many of us are not born salesmen and the thought of "hustling" our product can be distasteful, you need to believe in what you offer and evangelize your product to others.
• Pay your taxes first. Before you pay yourself, before you pay the phone company, before anything else, pay your taxes. If you don't take the first 30% or so out of each chunk of money you receive and send it to the IRS, you will sink into the quicksand of tax debt.
• Always give your clients more than they expect. It's called "adding value" to your products and services. And remember its corollary, "under promise and over deliver" and you will have many happy clients.
• Realize that by being self-employed, you are responsible for everything in your life. Need a retirement program? You will need to invest in this. Need health insurance? You will need to provide this as well. Need an expense account, gym membership, and/or continued education to stay competitive? You are responsible for these items as well. Price your services accordingly.
• Rely on experts. No matter what I or other writers/friends/strangers tell you, you need to find your own set of experts (accountant, lawyer, etc) to guide you through the parts of your business that you don't understand. Accounting and legal issues usually require the services of someone well versed in these fields; skipping this process and trying to figure out legal or financial issues on your own can sometimes have horrible consequences--paying for these services could really save you money in the long run.
• Grow your business slowly and confidently. Some businesses hit on a hot product and expand with the force of a shooting star. Unfortunately, they tend to burn out just as quickly. Grow your business with a mind towards keeping it for a very long time. Don't take undue risks, remain flexible, have a plan, and look for ways to spin off your business (ie: if you make and sell wood carvings, consider teaching a class or writing a book on the subject) to create even more income.