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TEN FUNDAMENTALS OF SUCCESSFUL SELF EMPLOYMENT

A Special Report by A. William Benitez

Author of The Self Employment Survival Manual

Copyright A. William Benitez 1995

 

What is self employment? The basic definition should be;

working for yourself or being your own boss. It also means

running a small business. My vision of self employment involves

a one-person business which is different from the small

businesses most business experts usual talk about. The most

prominent difference is that it involves only one person so there

are no employees to contend with and none of the employee related

costs and problems. Low overhead is a prime advantage of self

employment over most small businesses. Some one-person

businesses can start with almost no capital because the person

may already own most of the equipment needed for the work.

 

If you have ever dreamed of the freedom that working for

yourself will bring, I think you will find this information very

valuable. If you have any questions after you read this report,

please don't hesitate to contact me. Self employment is my

business so your success is important to me. Complete

information on how to contact me is listed at the end of this

report.

 

This is a time of serious turmoil for many employees. Many

large corporations are downsizing and reorganizing to reduce the

bottomline. This often involves a reduction in employees. Every

day you can read or hear news about layoffs even by some of the

largest companies in the world. The days when someone would go

to work for one company, stay for thirty years and then retire,

are behind us. People change jobs much more often now. Because

of this homebased businesses and self employment have become much

more popular. If you have even considered working for yourself,

this is the best possible time.

 

There are several basic steps that are critical to

successful self employment. I can't cover all the intricate

details in a short report but I can list the basic information

that will get you started on the right foot. Even if you are

already self employed, this information will be of great value to

you. Let's start with the basics of startup and then cover

staying in business and being a financial success.

 

ONE - Some People Are Not Cut Out For Self Employment.

Unflinching self analysis is important before taking the step

into self employment. It definitely is not for everyone. Take a

good long look at yourself and be honest. Are you

self-disciplined and self-motivated. Remember, as a self

employed person you are the boss and, at least at the beginning,

the employee. You must set your own hours, plan and stick to

your work schedule, and meet your deadlines. There is no

boss or manager to check on you and make certain that things

get done. In the beginning especially, you will have to put in

long hours to take care of all the numerous details required.

Many people need someone to tell them how, when, and where to

work. Are you one of them.

 

Self employment requires the courage to face uncertainty and

the unknown. You will have to give up regular pay checks and

bonuses. You will have to handle your own health care coverage

and retirement benefits.

 

To be successful you must have perseverance because it will

take time to develop your business. The rewards are great, but

the question is, do you have what it takes. It is essential to

be honest with yourself when answering this question.

 

TWO - Choose the Right Kind of Business. Some people have a hard

time with this. If you are fortunate, you already know the kind

of work that you would really love to do. What is your heart's

desire? Close your eyes and visualize. What do you see yourself

doing? Your past employments, hobbies, and pastimes are good

indicators of your likes and abilities. It may be helpful to

make a couple of lists. On one list the things that you really

like to do. On the other list all the things that you do really

well and in which you have experience. List even those things

that you don't enjoy. It is possible that it isn't the work that

you don't enjoy, but the environment in which you worked.

Putting it on the list will give you the opportunity to take

a good look at it. Study both lists and find the things that

interest you the most. Narrow the list down and then decide

which would be best and easiest for you right now, and tuck the

others away for another day. If you were laid off because of a

new technology, don't overlook the old technology. Sometimes

when a company creates a new technology some of their smaller

customers can't afford to switch. You may be able to service

these customers.

 

THREE - Learn All You Can About Your Business. Now that you've

decided what you want to do, you are ready to learn all that you

can. Learning should be a never ending process. If you apply

yourself to this learning process you can quickly become a

recognized expert in your field. This may involve going to a

school full-time or just taking classes during the day or

evenings. There may be correspondence courses available to help

you get started.

 

You may be able to properly educate yourself by reading

books and magazine articles. Today there are many educational

and motivational tapes and videos available, which could be

another learning avenue for you. Seek out those people who are

doing what you want to do and get as much advice as you can.

Some of them won't help you but there are many who will be glad

to share information. Watch what they do and try to find ways to

do it better or more efficiently.

 

Perhaps you can find a mentor willing to help you for a time

and teach you all that he or she has learned. A combination of

these things may work for you. Whatever route you take, realize

that this is a most important step. The more you know about your

business, the more successful you will be. The learning must

continue after you get started. Stay open to new ideas. Keep

abreast of all the things that are happening in your field. In

business as in life, change is the only certainty and you must be

prepared for it with continuing self education. Knowledge is as

important as self-discipline, self motivation, courage, and

perseverance.

 

FOUR - Prepare, Prepare, Prepare. Now that you know what you are

doing, make all the other preparations. First of all, calculate

how much capital you will need to get started and get that

together. This figure should include enough to cover your living

expenses for at least six months and preferably a year. This is

not always possible, but do the best you can. In the beginning,

most of what the business generates will be put back into the

business for marketing and unforeseen expenses.

 

Once you get the capital together, find a good location for

your business. Avoid getting a lease for more than one year.

Operate from your home if you possibly can. If you do work from

home, set aside one or more rooms especially for your business.

This will be important to get the deduction on your income taxes.

 

Secure the necessary city, county, or state permits or

licenses. You can get this information by calling City Hall and

your County Courthouse. You may be required to collect sales

tax. For information about this call your state comptroller.

These things vary from city to city and state to state.

 

Purchase all the supplies and equipment that you will need

to operate. Remember to watch your budget. Check everything you

already own to determine if it can be used in your business.

Look at used equipment and buy only what is absolutely necessary

to get started.

 

FIVE - Keep it SIMPLE! Set up as modestly as possible. Keep a

tight hold on your spending. Be on the lookout for bargains, but

make certain that the product is in good condition. Be careful

with your reserve funds. You can begin simply and then move up

to luxury much easier than the other way around. Most people

start off their business with far more space, supplies, and

"splash" than they need. Pay as you go. Avoid opening accounts

until your business is established.

 

SIX - Advertise Consistently. Advertising can take a big chunk

out of your reserves but you can take a simple route. Advertise

in the small weekend or weekly papers, rather than a large daily

paper. The rates are lower and the message is in the potential

customers hands for a week instead of just a day. Pass out and

post flyers in all available locations. Tell everyone you know

and meet about your business and pass out business cards.

 

Prepare and send out press releases about your business to

local newspapers, radio stations, and TV stations. If you will

be marketing on a national basis, do the same with national

media. You never know when someone will find your business idea

unique and give you some free publicity. This is the best kind

of media advertising.

 

Open your doors for business and give outstanding service.

Your best advertising will come from the mouths of satisfied

customers.

 

SEVEN - Honer Thy Customers/Clients. Remember that customers are

the most important part of your business and always treat them

with respect. They need your service or product, but you need

them more. One of the greatest joys in having your own business

is the joy of serving or doing for others. Give your customers

the benefit of the doubt and handle their complaints quickly,

efficiently, and compassionately. Be there to help them and let

them feel that you genuinely care about them. Remember, if you

keep customers coming back you can reduce or even eliminate a lot

of your advertising cost in time.

 

EIGHT - Avoid Hiring Employees, Especially During the Beginning.

The best form of self-employment is a one-person business. If

you need help, get family members to assist you. Otherwise, hire

subcontractors and make certain you adhere to the IRS rules for

subcontractors. Having employees is stressful and costly. With

employees you have the extra costs of withholding tax, social

security, worker's compensation, and even health care. Finding

good employees is difficult and you often have to deal with

people who are incompetent, or simply don't take pride in their

work.

 

Many very successful self-employed people use

subcontractors. It's simple, all you have to do is make certain

they are competent. Keep focused on your goal to be self

employed. You made this decision in order to have freedom, to be

your own boss, to do what you really want to do. If you choose

to expand and hire employees, then also hire an accountant to

handle all your payroll requirements and advise you about laws

and rules concerning employees. Then prepare yourself for a lot

more stress.

 

NINE - Charge Enough For Your Work. Many self employed

individuals undercharge for their work. This happens through a

lack of knowledge of actual costs or a desire to be very

competitive. Undercharging can create serious problems for your

business. It is foolish to be competitive if you are losing

money. Calculate all your costs carefully. There are many costs

to consider including rent for your business space and the

equipment in that space. You must also consider the costs of

operating your business vehicle. Insurance is always a costly

item and must be included in your calculations. There are many

overhead items that are overlooked. Check these carefully in

your figures.

 

Don't forget to consider your income taxes. You should be

setting aside funds for this purpose. Make certain you are

charging enough for your time and the time of any subcontractors.

Then add a profit to keep your business growing. Your profit

should be at least 20% and preferably more.

 

TEN - Be a Good Householder. Keep good, up-to-date records from

the very beginning (this may be a part of the business that a

family member can take care of). Many self employed people put

off record keeping for months at a time. When tax time comes,

you will have to spend days putting everything together. Develop

some kind of regular bookkeeping system using your bank

statements, a store bought accounting book, or a computer

accounting program and then follow through. Bring your

accounting up to date at least once a week.

 

Take care of your equipment with regular maintenance.

Whatever your business, it will involve some kind of equipment

that you will depend on so it is essential that the required

maintenance be performed.

 

Draw a conservative amount from the business for your

salary. Keep as much money going back into the business as

possible. As time passes and your business grows your salary can

increase and even include bonuses.

 

Pay your income taxes when they are due. Preferably, pay

them quarterly so you will not face a large tax bill at the end

of the year. You would be surprised how many self employed

people are behind on their income taxes. This always leads to

costly interest and penalties.

 

Start by doing business on a C.O.D. basis, but once you

do open accounts, pay all your bills on time. Maintain a savings

account for your reserve funds. Try to make deposits regularly

even if they are small. This money will help during tight

periods.

 

BONUS - Be Good To Yourself. Take care of your health, both

physically and emotionally. Being self-employed requires lots of

stamina, emotional stability, and persistence. Eat well,

exercise daily, get plenty of rest, and take time off for

relaxation and play. It's very important to leave your business,

both mentally and physically, at regular intervals. Now go for

it and have fun as a self-employed person.

 

For additional information on Self Employment, you can

write billbenitez@ureach.com or visit my web store -

http://www.abenitez-ebooksandmore.com ...

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