Posted with permission by Skip McGrath
What It Takes to be Successfully Self-employed
If you are selling on eBay or Amazon – you may not realize it, but you are self-employed. You may also have a job that pays you a salary, which means you are part-time self-employed. If this is your situation, or if your online business is your only venture, what do you need to know to be self-employed -and be successful at it?
The first step is to realize that you are both the boss and the employee. When you work for a company, your boss sets the tasks and gives you your marching orders. He or she may even set your goals for you -or if they are a good leader they work with you to help you set your goals. But as a self-employed entrepreneur you have to do all of this.
The first thing that most newly self-employed individuals struggle with is the self-discipline to do this. Every day (preferably in the morning) you have to think through all the stuff you need to accomplish – write it down and then start doing it.
If you choose to just wing it, you will look around one day and everything will be falling apart. It really takes a lot of discipline to do this – but it is absolutely essential if you want to succeed.
Another big factor is time management. It is one thing to set out your list of tasks but you have to manage your time and resources to make sure everything gets done. This is harder than it sounds. It’s easy to become distracted by phone calls, Facebook posts and emails. One of the things I do is set a schedule for answering email and the phone.
I rarely answer the phone before 10 or 11 AM – I just let it go to voice mail. I spend the first hour of the morning reading and answering email from the previous day then I stop and don’t go back to my email for at least 3 hours.
In the meantime I am doing all the tasks I set for myself that morning. On any given day it could be anything from working on this newsletter, to product sourcing to creating shipments to FBA among numerous other tasks.
The hours can really add up so try and divide your tasks into things that you can outsource to a virtual assistant. Another thing to do is invest in automation. For example I use a feedback service to solicit feedback. Since I am selling 30 to 40 items a day it would take quite a bit of time each day to email every customer requesting feedback. By automating this simple task I can spend my time on more important tasks that make me money.
Besides a lot of self-discipline the other criteria is learning how to pay attention to all those pesky little details that beset every business. It might be inventory control, doing taxes (both sales tax and quarterly estimated tax payment), or just organizing your files and paperwork so you can find things. But not doing these things can really add up and cause problems.
Another critical area is cash flow management. A lot of people focus on margins and profits -and those are important. But not paying close attention to your cash flow can really get you in trouble. Almost all new businesses run a negative cash flow in the early days – that is normal. So make sure you have enough cash to weather the storm until your cash flow turns positive. Be careful going into debt – that is another thing that can sink a new business. Debt is like a guerrilla fighter that can sneak up on you and attack you when you are not looking. (See next article about financing your business).
Lastly, is learning to take responsibility for everything. And, I do mean everything. One of the fastest ways to fail in business is to blame your mistakes and shortcomings on others. We all know that Amazon and eBay are not your friends, but it is their sandbox and if you are going to play in someone else’s sandbox you have to play by their rules – no matter how unfair or silly you think those rules are. Blaming your problems on eBay and/or Amazon (or your vendors or other things) is a sure way to fail.
Once you decide to quit your job and go full time one of the things you will need is health insurance. Since your income will be pretty low the first year you may qualify for a subsidy under ObamaCare -but once you start making good money you will find out just how expensive health insurance is. One organization that can help you is the National Association for The Self Employed – NASE. You can get information on their benefits here. They also offer a lot of other discounts on products and services for the self-employed. (Note – I am not endorsing them – just providing a link to their services).
So far a lot of the things I have dealt with sound like negatives, but there are many positive aspects to being self-employed. First of all I like the idea that I am completely responsible for my success or failure. My commute consists of walking up the stairs and sitting down in front of my computer. I no longer have huge gas, parking and dry cleaning bills. And if I want a raise, I don’t have to ask for it. I just work a little harder and longer.
I can take break anytime I want and I decide how big or how fast I want my business to grow. I set my own goals. While you are struggling to start your business and get it to profitability, you may not appreciate these things. But, as your business stabilizes, you will realize how good it feels not to answer to others and be the master of your own destiny.