Be your own Boss - How to start a business and become self employed.

Self employment becomes an option when people have enough experience in a business and know enough about how business operates to make it a real option.

You really do have a chance to be your own boss!

There's a lot to learn, though, about how a business has to operate, and what the risks are. There are laws, costs, and a range of things you need to do before you even start a business.

The first thing you need to know is:

Will your business idea work?

This means:

Can you sell your products or services and make a profit?
How do you do that, and make sure you're making money?

Some people have quite literally started with no more than an idea, and made it work. Others have built businesses from scratch. Large scale businesses and corner shops are all businesses.

All successful businesses have one thing in common.

Successful businesses all meet a need of customers.

The busy mixed business store supplies customers because it's convenient. The big corporation produces things people want and need.

Customers benefit from getting the things they want. The entire global market is based on supply and demand.

These are the questions you have to ask yourself:

What demand is there for your idea?
Who's your market?
How do you intend to do business?
What are your costs?

You need to do some market research for this.

  • Who buys your kind of products?
  • What do they want?
  • What are their interests?
  • How much do they spend?
  • What sort of volumes can you sell?
  • Should you sell your product to retailers or wholesalers?
  • Should you just sell your idea to a manufacturer?
  • Can you create an online business in your line of work?

You see how basic this really is. This information is bread and butter for any business, and you do need to know.

How can you do business?

You'll have noticed that how you do business is a fundamental part of this whole process. It's critically important, too. Some people can do business with just a phone, others need a factory, a team of researchers, and a fleet of trucks. Doing business costs money, too. Those costs can make or break your business, if you let them.

You have to know your costs.

This is absolutely essential.

Don't just jump in and wait for the bills to arrive. Successful businesses stay well ahead of their costs, and don't get taken by surprise.

Example:

Say an IT expert wants to run his own business. He can work with any system on the market, and he's actually pretty good, and up to date. His specialty is security.

Some questions for this guy:

Who needs IT security? Everybody. Local businesses, particularly. You know that, because you know the area and the industry very well.
How do you do business? At the lowest possible cost.
Do you need to rent an office? No need, at this stage.
Do you need a workshop? In this case, no.
Do you need to hire anyone to take calls and do the office work? No, because in my situation, my wife can do it.

So far so good. Now it gets a bit more difficult. This is another basic element in self employment, and it's genuinely tricky.

Prices:

What rates should you charge? Competitive.
Are you prepared to cut rates, or not charge, for services in return? If it makes sense. Might be worth some money, and cut your outlays.
What are your costs? Getting to the job, spending time checking out the IT setup, and figuring out a system for the client. Costs petrol, car costs, and phone, as the main cash outlays, sometimes food, too.

You'll notice that the original basic business idea of being an IT security consultant has got pretty complicated, in a hurry. He's his own boss, anyway you look at it, and that means thinking like a boss, which is what he's doing.

The guy doesn't have much in the way of costs, and it's probably just as well, if he's relying on local businesses as the main customers.

He's not spending much, but using up time which could be spent on other jobs. So he's already in a situation where he has to decide how to operate his business to get the best returns.

This is a pretty straightforward version of a home-based business, in an industry where demand is pretty high, and continuous.

There's another side to the answers to those questions, and it's why this particular business will succeed. The IT guy has some advantages:

Who needs IT security? Everybody. Local businesses, particularly.

Of course they do. They can't get service from non-locals without waiting for ages, and booking an appointment with someone. This guy can be there in half an hour. This is a service they really want, and need. They'll forget about the competition.

How do you do business? At the lowest possible cost to yourself. Sounds obvious, but unless you know your stuff pretty well, not so easy to achieve. It also means you don't have to charge as much, and you're that much more competitive.

Do you need to rent an office? No need, at this stage.
Do you need a workshop? In this case, no.
Do you need to hire anyone to take calls and do the office work? No, because in my situation, my wife can do it.

Costs like these are potential killers. He could spend weeks paying for any one of them, if he had to do any of these things.

Actually, if he does it right, he may never need an office, or a workshop, or even an answering service. That would save tens of thousands a year.

Business overheads are no joke. They're expensive, continuous, and you can find yourself quite literally working for no other reason than to pay them.

We've also got a suspiciously good match between this guy's business and the needs of the local market.

But that's how successful businesses are made.

He does know his market. It's no coincidence that he's decided to set up shop locally. In fact, it's more than likely one of the local businesses suggested it to him, by asking for help with an IT situation. Equally likely is that somebody just mentioned the local businesses were sick of not being able to get IT help, particularly with security, when they needed it.

Successful businesses don't just happen.

They go where they're needed.

The IT guy is also a local. The local businesses know him personally, know what he does. They know from each other that he gives good service. They're quite happy to have him there. Even better, his prices, with fewer overheads to worry about, are good, compared to his competition. That's called market identity, and it's the most useful marketing tool anyone could wish to have. People tend to refer to the businesses they know.

This is what a good business idea is supposed to be:

  • Right product
  • Right market
  • Right place
  • Right time

The alternative is like trying to sell sand to people living in the Sahara Desert.

Whatever your business idea is, think it through, see if it will work.

You really can be your own boss.

Try not to get fired. You'd never forgive yourself.

NOTE: Any IT people reading this, stick around for a minute, there's a bit more you'll need to check out.