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Whether you call yourself an entrepreneur, freelancer, self-employed or independent contractor, the fact is that your dream of being your own boss is shared with a growing number of people. According to the Canadian Statistics, approximately 100,000 small businesses are started in Canada each year. Yet, somehow, an equal number shut down as well. Those aren’t exactly great odds for a newly minted entrepreneur.
Maintaining a self-employed career is no leisurely venture. Despite producing work of high quality, many people find themselves coming up short and unfortunately having to go back to a conventional job.
My personal goal is to work with, support, partner, and help small businesses succeed. Remember to subscribe to Your Numbers Guy.
1. Fear of Failure
Self-employment is the same as starting a new business, with just as many hurdles to clear to keep the doors open. But while some people can use fear of failure as the ultimate motivator, others succumb to the pressure and spend more energy on worrying than on planning for success.
Fear can even kill your career before it starts. So if you find yourself worrying too much, shift your attention to your career’s immediate demands instead of your potential failures. Your odds of success will increase.
2. Falling to the Competition
The pool of talent is growing, especially if you’re a freelancer, which makes some industries extremely competitive and difficult to get your foot in the door. Many freelancers apply to numerous job openings and never hear back. You might produce the same quality of work as some of the top performers out there, but sometimes quality alone won’t be enough. You have to make an effort to stand out.
There are many options for opening doors, including becoming a better salesperson, having better marketing or providing a unique product or service. If you are just starting out, you can even reach out to companies you’re familiar with and offer to do an assignment for free to prove your worth. Don’t forget about building your network too, as satisfied clients make great referral sources.
3. Not Having a Business Plan
Having a plan is about setting a timeline of goals and finding ways to reach them. Just as with any other business, the best way to ensure success is to create a plan for your business.
This will allow you to strategize and understand your objectives. If you have a clear vision of where you want to be, you’ll be able to recognize, tackle and move on from any failures that may occur.
4. Lack of Marketing / Awareness
Your personal brand is your best marketing tool, and it’s your responsibility to build it up. As you know, there is no sales or marketing department that will promote your work. Though you may want to devote your time exclusively to your specialty, you also need to focus almost as much energy on making yourself known.
A cost-effective way to promote your personal brand is to create a blog or website to showcase your portfolio. Using social media sites like LinkedIn or Facebook can help you promote your product to the world. Remember to take your efforts offline. Attend industry events to build your network, and let your results speak for themselves through word-of-mouth marketing. Also, don’t forget your business cards!
Don’t forget about building your network too, as satisfied clients make great referral sources.
5. Procrastination
Having a plan is about setting a timeline of goals and finding ways to reach them. Just as with any other business, the best way to ensure success is to create a plan for your business.
This will allow you to strategize and understand your objectives. If you have a clear vision of where you want to be, you’ll be able to recognize, tackle and move on from any failures that may occur.
Believe me, I know how dangerous and easy it is to fall into the trap of procrastination!
6. Poor Prioritizing
Getting used to being your own boss can be tricky. You’re on no one else’s schedule except your own, so it’s understandable that you may first gravitate toward activities that are not essential to work. But this gravitation is why many people fail; they don’t prioritize.
The longer you put off your work, the less energy you’ll have when you need it most, and consequently your work quality will suffer. If you want your work to be sustainable and successful, it’s essential to keep a schedule and put your responsibilities at the top of it.
7. Not Seeking Family/Household Support
Life for the self-employed need not be lonely, but it can feel very solitary at times. That’s why family or household support is worth seeking. It helps maintain your mental well-being, especially in times of crisis. You might not think you need it now, but the romanticism of the lone entrepreneur isn’t worth the possibility of harming your relationships through prolonged absences. If you’ll be working from home, make sure everyone can make the adjustment when it comes to things like personal space and scheduling.
8. Not Understanding What to Charge
For many, determining your worth is a delicate but brutally consequential aspect of your career. It’s not much different than the stress-inducing conversation that precedes asking your boss for a raise. But we all know that if we don’t set a certain bar for ourselves, no one else will.
Recognize what goes into accurately pricing yourself. If you’re new to the game, charging a lower rate than the competition can be a great way to build a client base. If you’re a seasoned pro, then charge like one. If you’ve been working with a company for a reasonable amount of time, you can begin to raise your rates. Also consider the size of the company you are doing work for, as well as the budgets of their individual projects.
9. Being Financially Disorganized
It may be hard to understand at times, but for most self-employed people, having the books in order gets harder the more successful you become. Think about it. It’s easy to keep track of income and expenses when you are just starting out with a few clients. But as things begin to pick up, your accounting becomes something you do late at night when all your real work is done.
This can spell disaster when you stop paying attention to the expenses and costs of doing business. When you don’t have a clear picture of your financial health, you won’t know when you’re in trouble. Don’t let your finances get out of control, even if it means outsourcing the work to an expert.
This is an area we can help. Check out our full website HERE and learn how we can help you get your business numbers organized financially. With technology today we can also work with you virtually to save time and money.
10. Failing to Pay Quarterly Taxes
Speaking of expenses, many self-employed people overlook the tax situation that comes along with working for yourself. According to the CRA, “As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.”
If you ignore the quarterly requirement and owe more than $3,000 in taxes at the end of the year, you may face fines and penalties.
Starting and maintaining a self-employed career is like owning a business. Though it can afford you many freedoms, you will also face more demands. You will be your own C-suite employee of every stripe. But if you are prepared for what’s to come—including potential hiccups—then your chances of surviving by practicing your true vocation will drastically increase.
For other blogs by Your Numbers Guy you can find the list on our blog summary page.
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