My first year of self-employment
When I left my company, my last email said that, in the words of Bilbo Baggins, “I am going on an adventure!” With my first year of self-employment behind me, I can concur – it’s been a journey of a lifetime with ups, downs and everything in between.
Being sort of in the public eye, the reaction to my business has been quite mixed. I’ve had people defending their right to work for a boss for no reason and customers asking for loads of documentation and declining at the last minute.
This is the story of my first year of running my own business.
Managing my own expectations
Though I was able to cover my expenses every month for the last year, it’s been challenging at times to manage my own expectations. After leaving a toxic work environment, I often waited for my customers to start verbally abusing me. In the last year, I’ve only had 2 cases where there was a slight disagreement.
It’s a process to rewire my brain.
And being in control of finding clients, doing the work, testing, and invoicing can be taxing.
Transitioning between clients and not having much to do can also be difficult and stressful.
My service offering
Don’t spend a million to see if the idea would work.
As you know, I do software development. Many people think that they need my services right now – for free. To avoid this, I’ve had to not only learn to say no to unpaid engagements but also refine who my ideal client is – and what I can offer them.
Refining my service offering
I started out being a normal “software developer solving clients’ problems”. Though the idea was cool, the issue was that it wasn’t specific enough. I targeted everyone and spent quite a lot of money on marketing and making connections on LinkedIn.
I’ve refined my business strategy quite a bit to focus more on small businesses and startups – helping them push out minimum viable products. As I am discovering who I am, my marketing is becoming cheaper and more effective. I am now having meetings with people aligning with my company vision and mission.
Saying no when the offering doesn’t align
It’s fascinating that people don’t know the stages of starting a business. I would get these people asking for software development services without them having a clear direction for their project. After a year though, I have been able to identify people who are on their journey and I am able to point them in the right direction if we don’t align.
An example has been people wanting a WordPress website. My business is about software development – and though I have the skill, I decline the request and refer them to someone on my network.
I even added cool lines on how to say no.
I had to manage clients
When you’re self-employed, you’re not under any obligation to be on standby in case your clients have an urgent query – unless your contract explicitly states this. I answer clients’ queries after hours on my terms, not on theirs.
Managing clients and adding boundaries can be challenging – especially when there are deadlines and you have a team that is behind schedule. When this happens, communication is key: you need to make sure you communicate effectively. In the above scenario, I had to manage expectations by frankly stating the facts and planning a way forward from our current reality.
Make that call.
Send that email.
It’s better to say it as it is than to wait until just before the deadline to break the news.
One of the biggest challenges in my small business has been finding clients. I have found that referrals tend to work best, even if they come through Twitter followers. I have tried paid-for marketing, but I have seen mixed results with regard to the quality of clients.
It is however important to know who you are and what you have to offer. Once you know, you can filter clients more accurately. Remember: you don’t have to say yes to every customer!
When engaging with clients for the first time, I try and establish if they are passionate about their idea, if they have a budget and if the idea is viable.
Doing the actual work
In my day I have eagles and vultures. Eagles are the most important things I need to do. Vultures are the unimportant/not urgent things that need to happen. Focus on the eagles first, then look into the vultures.
I tend to set certain days apart for focus time, whereas other days are for admin and general tasks.
For the projects I am collaborating with other people, we have regular status update meetings so that we can manage client expectations. Depending on the project, this ranges from three times a week to once in 2 weeks.
Loneliness and boredom
In self-employment, money and time aren’t always connected.
When working with big projects, it can happen that you are waiting for one of several deals to come through. This can be a frustrating time as you’re sitting doing nothing for a while. I often feel like I need to do something more to be productive.
It becomes important that you manage yourself well when things are quiet.
Money, admin and invoicing
In software development, it’s important that you factor in things like testing, training, documentation and admin time. Though not directly billable, you need to work this into your fee of you will spend half your time doing unpaid work.
For me, even before I left my job, I had accounting software to assist me with sending recurring invoices and tracking estimates. I prefer spending my time on things that are more important than paperwork and admin. I recommend using Sage – check this link here for your free 30-day trial!
I also found it valuable to have a business emergency fund available in case things go wrong. Fortunately, I have not had the need to use it yet!
It’s been a year since I’ve left full-time employment – and I am happier than I was. I have been able to cover my bills every month, without the need to dig into my emergency fund.
Though it has not been easy, it has been worth it.
I don’t think self-employment or entrepreneurship is for everyone, but for me, it is rewarding.
Article reposted with permission from Frugal Local.