Be Your Own Boss?
During a recent career coaching session with a fellow named Charles, an Army major who was about to retire, I asked him what he would really like to do in his civilian career. He replied that figuring out the answer to that question was his biggest stumbling block.
That is not uncommon for people in his situation, so I asked him the same question, but in a different way. I said, “OK, forget about the titles and instead just give me the elements or characteristics of what you would be good at and what would make you happy.”
He smiled and said, “That’s easy, Tom. I want to control my own destiny. Sink or swim on my own merits. Call my own shots. Get my hands dirty. Work hard, and get paid for it. Be home most nights for dinner and not have to relocate.”
I asked, “Charles, have you thought about going into business for yourself?”
Self-employment offers many advantages. You get to call the shots, decide where you want to live, wear what you want to wear, associate with people and products that matter to you, determine your own working hours, hire and fire as needed and according to your standards, and reap the rewards of your success.
The appeal of self-employment is understandable. But be careful—you may have a clear view of the tip of the iceberg, but you also need to take a look below the waterline.
Here are eight factors to consider as you learn more about this type of employment:
1. Risk
According to the Small Business Administration, more than 70% of self-employment business ventures fail in the first two years. Can you afford the risk?
2. Accountability
There will be a big scoreboard up there with your name on it. The numbers next to your name are your numbers. Nobody can take credit for your success, but nobody will cover up your failure.
3. Financing, Cash Flow, and Credit
Starting your own business requires seed money. Do you have it? If you have to borrow it, how is your credit rating? Some franchising opportunities require an up-front investment of $5,000-$100,000. Many business failures can be attributed to running out of cash in the first year.
4. Time Off
How important is time off to you? Have you been using those 30 days of annual leave? Being off work on those federal holidays is kind of nice. But guess what? Self-employment often means no vacation, no holidays, and no weekends. This can be true until your business is well-established and you can entrust the keys to trusted employees when you are out of town.
5. Working hours
Yes, your military experience has you very familiar with 12- to 14-hour days. Were you thinking about cutting back a little? Forget it. Being your own boss is 24/7.
6. Employees
Will you need them? As much as you relish the thought of not having a boss, do you really want to be one? If so, how many employees and what kind of talent will you need? Will you be able to find them? Most business owners will tell you that their number one problem is finding and retaining good employees.
7. Preparation
Although your management expertise may be impressive in the areas of personnel, administration, and materiel resources, you have little or no direct business management experience. You are used to the bottom line called “readiness” or “war fighting,” but you will succeed or fail in business based on one called “profit?” Do you know how to write a business plan, specifically one that will pass muster with a lending officer or a franchisor? Have you taken an accounting course? You may need professional guidance from accountants and lawyers. Are those fees in your budget?
8. Paychecks
How much will you make? When you work for yourself, you pay yourself last. Pay your overhead, service your debt, pay your employees, and give the federal, state, and local government their shares, and you get anything that remains.
Considering all of the above, why do people choose self-employment? Independence, self-determination, the life-style associated with picking where you want to live or perhaps working out of your home, the possibility of earning a living by doing something about which you are passionate—these are just a few of the reasons. In addition to weighing these plusses and minuses, you should also consider your current status.
Back to the Army major I mentioned earlier…
He will soon retire with 22 years of service and receive a monthly pension. He and his wife are “empty nesters” now that their two children are no longer living at home. She has a degree in accounting and has worked outside the home throughout his career, mostly in retail sales and as an accounts payable/receivable clerk. Other than a small credit card balance and a car loan, they are debt-free. They have been able to save some money and have an excellent credit rating. In addition to being a self-proclaimed “motor head,” he spent most of his career—both enlisted and officer time—in vehicle maintenance. This supports his interest in either opening a truck maintenance facility or becoming a franchisee for Jiffy Lube, Express Lube, or AAMCO.
His situation appears perfect for the self-employment option. How does yours compare?
Although I dedicate a chapter of my book, Out of Uniform, to this subject, I recommend you gather additional information and guidance on this subject. In addition to the resources I have listed below, do yourself a favor—get out in the field and talk to franchise operators, especially those who also happen to be veterans.
For more information check out: U.S. Small Business Administration, International Franchise Association, AllBusiness, USA Home Based Businesses, and Work At Home Based Business.
