So you want to run your own business?

Posted by: Lars Koudal In: freelancetips

Running your own business is a dream many people have, but few ever come through. Managing your own time, earning a decent living (or a killing) and not having to answer to anyone but yourself is a great dream, but many people fail, and that’s because the reality does not correlate with their fantasy.

In this article, I go through some of the misconceptions people have, and try to make sure people entertaining this idea knows what they are heading toward.

Misconception 1 : I will have more time with my family.

Wrong. You will not have more time with your family, you will spend more time working on your projects and your clients dont care if it is your girlfriends birthday, they want that project finished tomorrow, so you will have to suck it up, hunker down, and skip dinner.

Misconception 2: I don’t have to work those long hours at work anymore.

Wrong. You will have to spend even longer days now, since there is no boss or colleagues to share the workload/blame for failing.

Misconception 3: I will have a lot of clients from the get-go, so money will be no problem.

Wrong. Even if you have a client as well as a project from the first day, you still need to actually finish the project, have the client approve it, and then you need to invoice the client. When invoicing the client, you set a pay-by date, but are you sure that all clients will actually pay by this date? Most clients I have believe that they have a month by the day that they receive the invoice, and they usually wait at least that month before paying. Do you have money to live by until then?

Before starting your own business, you should make sure you have enough money to pay for all your expenses (rent, food, car, etc.) for at least 3 months. Start saving up money!

Misconception 4: I will be able to pick and choose between the jobs I want and the boring ones.

Wrong. Maybe in the beginning if you jump at the right time and have some interesting projects. But what will happen when you run out of interesting/fun projects? Will you stay the course and wait for a fun project, or will you accept less interesting/less paying projects? Of course you will. You need to maintain a fairly steady income even if you are single and you do not have the need to pay mortgage for a big house/car and/or maintain a big family.

Being self-employed is a state of mind. You need to figure out what kind of person you are before you walk down this path. Are you the kind of person who need security, you propably wouldn’t enjoy this lifestyle very much. If you on the other hand is the kind of person who enjoys challenge, and loves having the opportunity to manage your own time, you will love it.

After having been self-employed for 5+ years, I notice a lot of differences in the people trying and the people succeeding. If you have the skill, and the network, you will propably do well.

Don’t get me wrong. I enjoy being a freelancer, and I would not choose differently even if a very attractive job-position was offered me right now. (Well, maybe, but it had to be an extremely good one). My choice to become a freelancer and live purely on this basis was brought forward by me being fired from a good steady job due to lack of proper income, but the choice to remain a freelancer was my own.

What about you? When did you make the jump to being a freelancer? Was it a gradual process or did you jump feet first?

There are more misconceptions to add, share your experience with the rest of us!