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5 truths about self-employment

By Jake Martin

3 min read

Toying with the idea of taking the plunge into self-employment? Before you to persevere. Entrepreneurship can get lonely and exhausting, so you might want to think about enlisting a partner to lighten the load.

Here are the five truths about what it’s like to leave the rat race, be your own boss and roll with the hard knocks.

1. Multiple roles

One of the toughest aspects of self-employment is the versatility that’s involved. You could find yourself wearing many hats at once, playing the role of marketer, accountant or even motivator.

Before you take a leap into the dark, ensure you are self-reliant enough to persevere. Entrepreneurship can get lonely and exhausting, so you might want to think about enlisting a partner to lighten the load.

Otherwise, you’ll need to make sure your job-juggling skills are up to the task.

On the bright side however, being required to partake in different roles will increase your overall experience and it can be a great learning experience.

2. Low income

A common obstacle for the self-employed is low cash flow – especially early on. It can be hard to turn a profit as soon as you get out the gate.

Start small, and keep your overheads as low as possible. Discipline is vital here. If you can, spend virtually nothing. Aim at building a powerful prototype and focus on service, then after a while, the money should come naturally.

You should also take advantage of the tech that’s available to help you during a period of low income. Using a mobile-based cloud accounting tool like QuickBooks Self-Employed can help you manage your expenses and grow your business.

3. Customer turnover

No matter how much attention you pay to your product or service, you’ll always have customer turnover.

You need to accept that some clients are picky and you can only do so much.

Instead of taking lost business personally, be ready to learn from it – recognise whether you need to lift your game in an area.

The best way to do that is through research. The Loyalty Research Centre advises regularly seeking input from clients, because they – rather than any assumptions you have about how good your product is – keep you in business.

4. No personal life

It can be difficult to sustain an optimal work life balance. A 2014 report produced by the Australia Institute think tank found that the balance between work and life was going downhill for four in 10 people.

Expect long hours and even some overnight sessions. As any successful entrepreneur will confirm, hard work is vital. If you operate in a crowded market, you can and must outwork your competitors.

Ask yourself just how much appetite you have for the startup grind and how much you are willing to put into the business. To paraphrase Richard Branson in a TV interview, entrepreneurs who only chase big bucks but lack determination will fall flat.

5. Emotional meltdown

However tough you think you are, be prepared for the occasional meltdown. Your business partner might storm out in a huff, exhaustion might kick in or you could go a week without doing any business.

For sure, you will experience stress, because it is integral to entrepreneurship. A recent study by the consultancy Sandler Training looked at 2000 small business owners and found that 66% of male entrepreneurs had experienced stress during the previous 12 months. The same applied to 60% of female entrepreneurs.

Pressure and dejection are an inevitable part of the start up journey. Remember that despite all the profiles glorifying success, the perfect entrepreneur had to work to get there.

Be prepared for discouragement, because in the end the lows will be worth it. With a little luck, you will wind up living the fulfilling and, hopefully, lucrative life you desire.

Always seek out opportunities to make connections. Keep networking, because you never know who you might meet – a mentor, a customer, a new and invaluable recruit.

To read more articles related to self-employed, click here.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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