Bill Watts - October 12, 2015
It's a GREAT idea to be your own boss. Some of my favorite benefits: Control Respect Appreciation Money Flexibility. There are many differences between the employer-to-employee relationship and the professional-to-client relationship. The future of the professional world may be self-employed service providers working a variable schedule.
My recommendations for setting up your business:
- Come up with a business name!
Take yourself and your business seriously. Create a brand for your busness. Your professionalism will establish a better and more-respected working relationship with your clients and your community. Use:
- meeting invitations and agendas
- official invoices
- a business website and email address
- business cards
- Setup an LLC. It's VERY easy, and it's pretty cheap. Register for an LLC before creating a contract. That way, the contract will be between your LLC and your client (instead of you as an individual and your client). Your name won't be mentioned at all in the contract, it will just be your LLC name.
- Identify a Business Model, a Business Plan, and a Target Customer/Client. How will your business be successful? How do you make money? Focus on that. Be aware of that when planning and making decisions. Identify what you want to target, and what will help you succeed in that target.
- It's not about you, it's about your customer. The 'strength' that you feel helps you might not actually be helping you. Make your marketing about your customer. Alleviate a customer's pain. Find a problem they have, and solve it.
- Consider General Liability insurance (i.e., physical activities such as laying cable) and Professional Liability insurance (skilled labor that is the main business activity), as well as Workers Compensation insurance, Comprehensive Automobile Liability insurance (for client visits), and Commercial General Liability ("CG") insurance. Appropriate insurance will often be based on the percentage of time you spend on each business activity (training, sales, meetings, labor, development, etc.).
My recommendations for working with clients:
- At the start of the project, write DETAILED documentation that explains the goals of the project and what the deliverables/endgame will be, to help provide clarity and understanding. This should also indicate when you will get paid.
- Manage client expectations. Be VERY clear about what your responsibilities are to the client. i.e., What will you help them with, and what will you not help them with. Draw clear boundaries.
- For your first project, do a fixed-bid payment at the end of the project (instead of an hourly rate). It's too tough for you to estimate how many hours it will take, unless you have extensive experience with the client and the involved work.
- Communicate via email. It will create a paper trail, in case issues arise later. Respond quickly to emails, just to let the client know you are available, even if you only say "I'll get back to you shortly".
- Always be available to your clients, and let them know when you won't be.
- With each new client, raise your prices. You've worked harder and built a better reputation with each new client. Each new client will require you to work more. Make sure that you are paid accordingly.
- When starting a new project, estimate how many hours it will take you to complete the work. Based on that estimate, and other factors such as client availability and your own availability, determine when you can complete the project. Set the project deadline accordingly. If the client pushes back and tells you that they want the work completed sooner, hold firm - delivering a project correctly and on-time is better than overworking yourself or missing your own deadlines. Don't overwork yourself! Be aware of your deadlines and manage your time wisely.
- Determine what your hourly rate is, and use that rate when working with clients. Use an hourly rate that is consistent with other professionals of similar experience in your field. If your rate is too high for a specific client, then you might not want to work with that client - they might be too focused on the bottom line, instead of getting the job done correctly.
My recommendations, from a personal perspective:
- Figure out what you you love to do. Make that your job. Read "4 Hour Work Week", and recognize that some suggestions in this book are faulty.
- Make quick decisions. Do things, get them done, and move on. It will save you time and money, both a precious commodity. "A good solution applied with vigor now is better than a perfect solution applied ten minutes later."
- Be aware of what you are doing and what you are spending your time doing. Focus on what is important. Ignore the unimportant. Don't let extraneous or unimportant ideas worry you. Learn to "let go" of certain concerns and responsibilities.. You can't worry about everything, or try to.deal with everything yourself.
- Write things down, instead of trying to remember them.
- Stay in contact with your network.
- Always portray yourself as more than you are. Whenever referring to your work, don't refer to yourself as an individual, refer to your business.
- You will fail at least 9 times out of 10. If you succeed one time out of ten, you are doing well.
- I used to say, be confident and client focused. I used to say, never show weakness or apologize or ask for vacation time or say "I Don't Know". I used to say, the client should think of you as a reliable resource, like a computer monitor. Then, I read "Getting Naked" by Pat Lencioni, and I learned to be open and vulnerable to my clients. It helps build better relationships. Be vulnerable. Let your clients feel good about trusting you. Become a part of their community, so that you can work together and identify the right solutions.
As for hiring employees? I say, don't do it. When necessary, partner with other people/companies to complete a project successfully.
A great article on this topic:
How To Figure Out Which Kind Of Self-Employed Worker You Want To Be