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SOURCE: Tips from MCA-I Pro Track™ · POSTED: 03/24/05
For twenty years, I have negotiated the twists and turns of being an independent, a sole proprietor. You know, what you might call, ‘on my own.’ However, that is a misconception. I am not own my own. There are many people that have given me opportunities, and I thank them.
For those of you considering ’going on your own’ or for those of you that find yourselves ’on your own,’ here are some tips, hints and realities about the real world of sole proprietorship.
Fallacies: I am my own boss. I can take off anytime I want. I can control my own life. Remember: You are in business for yourself... for others. You are not your own boss. You have ‘hopefully’ hundreds of bosses. You work 24/7. You are on call when your customer needs you.
You must have an on-going:
Business plan: What is your product? How is it produced? Who produces it? Are you going to have employees or others working with you? Will you rent a space or do this from your house? Do you need to check with zoning about your business? Do you need a city, county or state license? How will you keep track of expenses, receipts and billables?
Marketing plan: Who is going to buy your product or service? Where is your customer base? How are you going to market your product or service? Are you going to produce the marketing materials yourself or do you have to outsource this?
Financial plan: Where is your capital including your personal expenses for the first 3 years going to come from? What income do you expect to receive in the next 6 months….1 year….2 years? Why do you think this? Have you researched similar businesses and found out how they started and kept their business afloat?
How long to get started?: 3 to 5 years to get started. Then another 3 to 5 years of paying off the first 3 to 5 years. And if you do not put money away, it never ends.
Equipment payoff: It used to be a 5 year payoff...then 2 years...then 15 months...now one or two projects. Make sure your equipment expenditure is for a real job. On-the-come or a verbal promise of business does not pay your bills. Speculative work rarely works.
Cyclic nature of business: The highs of income and the deep valleys of financial emptiness are real. Make sure you put money into a separate rainy day account. Some say a good amount is 10% of your gross. You ‘will’ need it.
Hit the ground running: You have the skill and the savvy of producing a quality product or service. Then, you must have the marketing knowledge and understanding of how to build relationships to: Get the job! Remember, after ‘what’ you know, it’s ‘who’ you know.
One customer does not make you a business: Even the IRS says this. You can not receive the nice deductions of a sole proprietorship if you only have one customer. Plus, what if that one customer dissolves your business relationship?
Success is when knowledge meets opportunity: Are your skills refined, your knowledge up-to-date, and your business in tact when opportunity presents itself?
For those of you considering ’going on your own’ or for those of you that suddenly find yourselves ’on your own,’ presenter Jim Powell provides some tips, hints and realities here about the real world in his MCA-I Pro Track™ session “Creating Business” - Wednesday, June 8, at 10 a.m. during InfoComm 05 in Las Vegas.