I was recently talking with a friend who said he’d be scared to try to start his own business because it seemed so insecure. I asked, “How is that any different than what you do working for someone else?” After a moment’s pause, he admitted that it really wasn’t.
When it comes down to it, you work for yourself, regardless of who is the owner of the company that cuts your check. It is your responsibility to market yourself, develop your skills, identify trends and position yourself to profit. Abdicating these responsibilities doesn’t somehow put you into an “employee” category where you have more job security.
Most successful people see their jobs like this. They are in a business relationship with their employer, but they see the employer as their client. This represents a significant change in mindset for most employees, but if you can get your mind around it, it can be one of the most powerful changes in perspective you will ever have.
Here are some ways that being an employee is very similar to being self employed:
- Your employer/client can get rid of you at any time.
- There is minimal job security from any one employer/client. You need diversification.
- Economic forces often determine if you keep the job/contract.
- Clients and employers aren’t required to be rational – even if you make them money and are valuable, you may lose your job/contract.
- Your ability to command large sums of money is directly related to your ability to “walk away” and find another client/employer.
- Employers/clients want people who bring significant skills to the table.
- Even if you are 10 times more productive, it may be hard to convince people to pay you 10 times more. (Although it is harder as an employee.)
If this is true, why aren’t more people their own boss starting their own business? It mostly comes down to education. Most people have an employee mindset. They don’t know how to get the things that their employer provides for them and assume they need to work for someone else to get those things. Here is a short list of some of the things that people tend to rely on their employer for and keep them from starting their own business:
- Retirement plan
- Health insurance
- Tax witholding
- Vacation and sick pay
- Marketing (finding clients)
None of these are particularly hard to get/do for yourself if you start your own business, but you have to put some effort into learning how they work. If you think you may want to be in business for yourself at some point, it is time to start researching the above list and learning how you can provide those things for yourself. You are a lot better off having a solid knowledge foundation ahead of time. Not only does it take away some of the fear of the unknown, but it can help you understand how to structure your business in a way to maximize your profits.
Maybe you shouldn’t start your own business. However, everyone can benefit from acting as if they are in business for themselves–regardless of who actually signs their paychecks.