Risk of being an entrepreneur
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| Author | Content |
|---|---|
| Khamul Apr 05, 2012 8:42 PM EDT |
I hate to sound preachy, but this shows exactly why "striking out on your own" is a risky proposition, esp. if losing a mere two weeks' worth of revenue is going to make you unable to pay your rent and buy groceries. Lots of people have dreams of starting their own business, but doing so entails risk, much more than going to work for "the man". The reason your pay as an employee is much less than as an independent contractor is precisely because the company is assuming that risk on your behalf, in exchange for you getting the security of a regular paycheck every 2 weeks. Striking out on your own is laudable, but make sure you have plenty of cash saved up and a backup plan in case your new venture fails, otherwise your venture isn't laudable, but foolhardy. You may need to even moonlight for a while so you can get your business built up enough to sustain itself while maintaining a regular paycheck, though this is difficult because of the extra hours of working two jobs. Another thing to learn from this experience is how dependent your business can be on its business partners, and why it's best, if possible, to not rely on any one company for a critical part of your business. |
| caitlyn Apr 06, 2012 4:58 PM EDT |
For once I agree wholeheartedly with Khamul. I struck out on my own in 2007 and I'm doing OK. I was doing extremely well a year ago and I thought all my hard work would finally mean debts paid off and more money in my pocket than in my last corporate gig. Silly me. My largest customer decided to insource and that cut me out of the equation. My next largest customer went bankrupt in November. Fortunately I still have enough business to keep my head above water but I find myself heavily marketing my skills again instead of doing what I like to do -- technical work. There is one thing worse than having to do marketing: having to do collections. Chasing down late paying and non-paying customers is a monthly chore. Laying someone off, which I had to do last year, is even worse. In many ways just collecting a paycheck is much, much easier. There are times I consider it. There are other times when having a greater degree of control of my destiny is very rewarding. You have to weigh the pros and the cons. Many people are very good at what they do for a living but absolutely not cut out for freelancing or running a business. |
| Khamul Apr 06, 2012 5:49 PM EDT |
Not only that, but what this guy is doing basically amounts to a software developer's dream job: just work at home in your underwear, without any bosses or employees, write some software all by yourself, and have people buy it by the thousands. No schedules, no deadlines (other than self-imposed), no meetings, no payroll, no other developers to deal/argue with, etc. If you had an employee (or more than one), that already means you assumed much more responsibility than this guy. If you can manage to make your dream job work, great, but it's not the norm, and you certainly shouldn't expect it, especially not when times are tough. If every software developer was able to work that way, they would. There's a reason they don't. |
| Koriel Apr 06, 2012 5:57 PM EDT |
I started on my own in 2006 and Im also finding it difficult in the last couple of years, only had one contract last year and im down to one major client.
Thankfully the wife is also employed part-time or else we would really be in the deep kaka. Luckily I don't have to worry too much about late payment, I only provide binaries upfront, they don't get source code until cheques have cleared. Working on one contract at the moment but have nothing in near future other than some minor follow up work once this contract is complete. Unfortunately my skillset is pretty specialised which also narrows the market. Winning the lottery right now looks like my best bet :( |
| caitlyn Apr 06, 2012 6:48 PM EDT |
@Koriel: The best thing you can do is broaden your skillset, even if it means doing some volunteer work. I'm doing the website for a political campaign this year. Between that, a new business website I'm working on, and another I've been asked to do, I hope to add something I never considered myself good at, as in web design, to my resume. Of course, I'll also have a portfolio of sites online at that point. Why do this? A lot of companies nowadays want the *nix sysadmin to also be able to do web design. They call that a "Web Administrator" position. Oh, and yeah, that used to be two very distinct jobs with very different skillsets. Times change and you have to adapt. Figure out what you don't know but would like to know and teach yourself. I've reinvented myself several times over a 32 year career. The skills I had in 1980 are mostly for technologies considered obsolete today, right? |
| Koriel Apr 06, 2012 7:11 PM EDT |
Yeh, I also do the web stuff and other software in an effort to diversify, see here http://www.caledoniacomputers.com. But business ain't exactly booming it wasn't so bad when I first started out just the last couple of years have sucked. |
| jdixon Apr 06, 2012 8:43 PM EDT |
> Many people are very good at what they do for a living but absolutely not cut out for freelancing or running a business. Yep. :) |
| Khamul Apr 08, 2012 7:36 PM EDT |
I think the need to be a jack-of-all-trades is much greater, too, when you work for yourself. Not only do you have to handle all the business stuff, you need to do whatever's necessary to keep the client happy. You don't get to say, "that's not part of my job" and let your manager grab some guy on another team, who's experienced in that exact thing, to do that job while you specialize in your particular niche; you either figure out how to do it yourself, or you subcontract it out, which cuts greatly into your profits (and of course, if you subcontract it, again you're basically being a manager, something a cubicle drone doesn't have to spend time doing). It's really pretty interesting that independent contractors/consultants can survive at all, let alone do quite well (much better than working for a company many times). Logically, this shouldn't be the case: it should be more efficient for everyone to specialize in one job, and maximize their productivity in that role, while allowing others to specialize in other roles (like management), so that everyone can prosper the most. But of course it doesn't work out that way at all in real life, as companies are frequently poorly-managed, not able to adapt to changing markets, run by greedy bosses who pay the least possible to workers and take an unreasonably big cut for themselves, etc. So if you think about it, anyone working for themselves is basically exploiting the fact that humans generally suck at building organizations and running them efficiently and effectively (and the larger the organization, the less efficient and effective it is in general). |
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