Invest in You: Part 3

Being self-employed is often a bit too much of a roller-coaster ride for many people, both emotionally and financially.  It's worth noting that the impact of self-employment insecurity will extend to those closest to you as well.  Despite their stated and demonstrated support of your new venture, your loved ones may be experiencing similar highs and lows as you are, as the aspiring entrepreneur.

An important message for anyone wanting to try their hand at self-employment: if you are still working for a salary, mitigate the risk of lost income by starting something small on the side that does not impact your relationship, trust, or earnings potential, as it relates to your current employment.  In other words... don't bite the hand that feeds you!  View an attempt at an entrepreneurial venture as an opportunity cost expended in lieu of idle time spent watching TV, or weekends when you may have time to do something useful that may generate an income (after you've mowed the lawn at home).

Here are just a few guidelines:

1. Always ensure you have enough money set aside to cover at least 6 months of expenses - one year's worth of expenses would be even better!
2. Start with what you know, and start to sell your services and/or products to people within your network, whether you're making cupcakes, or selling services related to a skill you have learned and mastered.
3. Create a comfortable workspace if you're planning to do some work from home.  Make sure others know and respect the time and place where you do your work, and make sure you create family & friends time, sufficient to allow you to enjoy life while you're working multiple jobs!
4. Be thrifty.  New technology, like social media, reduces start-up costs, especially as it relates to marketing yourself.  Most social media tools are easy to use an inexpensive, or free.  Use these to promote your services/products, while you avoid further fixed overheads by working from home, in your spare time.
5. Make sure that people can find you.  In addition to old-fashioned networking, ensure that you create an online profile.  'Websites' are available for free, like this blog, or a business page you could create via FaceBook.
6. Present a professional business image.  Look the part - whatever it is that you're doing - dress appropriately, offer a store-printed business card, create a business email address with a formal signature, etc.
7. Look for more work than what you think you are able to bear.  If you make cupcakes, look to sell and deliver to ten stores every Monday morning (so that you can bake over the weekend).  If you try and sell to ten new customers, don't be offended if only 1 or 2 place a small order, especially at the start.
8. Charge what the market will bear.  Do some homework!  If a shop sells cupcakes for $3, you may be able to sell your freshly baked cupcakes to them at a wholesale price of $1 each - don't sell yourself short.  If you have a salaried job, divide your gross salary by 2,000 (hours; as in 50 weeks x 40 hours per week).  Using this example, if your salary as a technical writer for your employer is $60,000 annually, your hourly rate is $30.  Add a 50% mark-up for freelance work.  If you are offered and accept a gig to write an instruction manual for a manufacturing company's product - work that's not in conflict with your day job - quote $45/hour and estimate the number of hours in order to offer them a quote for the job.  20 Hours earns you $900!
9. Source help if you need it.  Use friends, family and students if you have more work than you're able to do, by yourself.  Pay them.  They'll help your business prosper, and after all... you already have more work than you can manage on your own.

If you follow these simple steps, take control of your own future, work a little harder to change your situation, find enjoyment in creating work for yourself (and others), turn your hobbies and/or passion into cash, and so on... you're at least one step closer to achieving financial sustainability.

In the next post (Retirement Fix: Part 4), we look at a few more formal steps for budding entrepreneurs to explore.