RSTech
12-17-2006, 12:33 PM
Are you considering self-employment? As a self-employed individual I get lots of people asking me how easy is it to do, and what do they need to do to get started and they have always wanted to have their own business. The first thing I like to tell them is to "Run the Numbers" and develop a business plan. It's surprising how many people drop the idea of self-employment when they go through this exercise.
Running the numbers - If you are going to be self-employed you need to make enough money to sustain yourself and any overhead costs you may have. Seems obvious right? A lot of people just figure if I make $50 or $75 or $100 per hour I will have it made. Well, depends on your overhead costs.
- Write down all your expected upfront costs. Depending on your business this may include items such as computer, fax, cell phone, tools, vehicle, office first/last month lease, etc.
- Write down your monthly ongoing costs. This may include office phone bill, cell phone bill, vehicle lease, vehicle fuel, software subscriptions, liability insurance, worker's compensation insurance, etc.
Now you need to ask yourself some questions based on the data you have wrote down. Do you have enough money in the bank to cover your upfront costs? If not, can you get a line of credit to cover it? It can be difficult for new businesses to get a line of credit. Ask yourself how much business will you need to get to cover your monthly operating costs; you'd be surprised at how much of your income may go towards these costs. Now ask yourself how much business you will need to get to obtain the wage (income) you would like to make.
After you run the numbers if you haven't scared yourself away from the idea then you need to move on to making a business plan. A good business plan should include investigating your potential market. Who will your customers be and how much work do you expect to get from them. Don't fool yourself and assume unrealistic goals because at the end of the day if you can't achieve those goals you will suffer for it.
Once you have run the numbers and have a realistic business plan that you feel you can achieve then you may be a good candidate for self-employment. Good luck!
Running the numbers - If you are going to be self-employed you need to make enough money to sustain yourself and any overhead costs you may have. Seems obvious right? A lot of people just figure if I make $50 or $75 or $100 per hour I will have it made. Well, depends on your overhead costs.
- Write down all your expected upfront costs. Depending on your business this may include items such as computer, fax, cell phone, tools, vehicle, office first/last month lease, etc.
- Write down your monthly ongoing costs. This may include office phone bill, cell phone bill, vehicle lease, vehicle fuel, software subscriptions, liability insurance, worker's compensation insurance, etc.
Now you need to ask yourself some questions based on the data you have wrote down. Do you have enough money in the bank to cover your upfront costs? If not, can you get a line of credit to cover it? It can be difficult for new businesses to get a line of credit. Ask yourself how much business will you need to get to cover your monthly operating costs; you'd be surprised at how much of your income may go towards these costs. Now ask yourself how much business you will need to get to obtain the wage (income) you would like to make.
After you run the numbers if you haven't scared yourself away from the idea then you need to move on to making a business plan. A good business plan should include investigating your potential market. Who will your customers be and how much work do you expect to get from them. Don't fool yourself and assume unrealistic goals because at the end of the day if you can't achieve those goals you will suffer for it.
Once you have run the numbers and have a realistic business plan that you feel you can achieve then you may be a good candidate for self-employment. Good luck!