Self-employment Support?

[puglogic]

Kelli, I have this page bookmarked and I go there and re-read it every time I start to micro-analyze all the reasons why I can't do something:
http://www.chrisbrogan.com/106/

It's pretty rough truth, and a lot of it might not be relevant to you, but I find that when I'm in a slump, I re-read this and usually come up with one thing I can do in the evening that moves my goal forward, just by that extra little boost.

I am always doing the same thing you are, by the way, meaning putting a little effort every day into self-employment. The only difference is instead of my first venture I'm on my 3rd or 4th, but the mental morass is the same.

I also love this guy's emails and his book, which has a great 1-2-3 section on earning your first bucks as a happily self-employed person: http://screwworkletsplay.com

Cutting expenses and eliminating all debt aside from my mortgage was the first step for me in taking off on my own, so you're ahead of the curve! I also made sure that my capital outlay for the new business was minimal (easy in my field) and that I kept my day job while I started up my own business. There were a couple of busy months there, but it was so worth it.

My first clients got a real bargain (not free but close to it!), but I made sure my service was so great for them that they referred me to others, who referred me to others, and off it went. I've never really had to market my business very much, aside from a web page and a stack of business cards. I know you can do whatever you put your mind to!

Your goal might feel different because you're not 99% in control of it like FI3 -- you have your intended customers' reactions to think of. Will they buy what you're selling? I think you have the talent to make any service compelling as long as there is a market for it. Talk to some people and ask them point-blank: Would they "buy" this? What would they most like you to offer? How much (range) might they be willing to pay? You can get a lot of answers just by speaking to the people you want to serve.

[Life_is_Simple]

LiS, we must have been doing a simul-post. And I am never tired of your ramblings. And yes, I do fidget a lot.

You know, when I first read YMOYL and decided that I WOULD get out of debt, people around me pooh-poohed it. They tried to convince me it was part of life, and just to stuff it away and try to be happy with it. But I wasn't. It was a weight on me. And I stuck with my guns, and within four years I was debt free. $30K in four years, and during two of those I was making not so very much. I didn't know how long it would take but I plugged away at it and it is quite amazing what focus will result in.

Good for you! Continue to be convinced of your own unique coolness, and ignore others who might drag you down

I also really look forward to getting my hands on the Jaeger book you recommended. I feel like that's where I'm at - drudgery! At least my job isn't a HSSJ - like I said, lots of good things going on - but still . . .

Yeah, I re-read parts of that book every once and a while, to re-focus. It's on my bookshelf of Favorites

[try2bfrugal]

A book that really changed my life was The Two Income Trap. This talked about making sure that your fixed expenses were on one income. Then, secondary income is just there for support in case something happens to the primary income.

That book has a big impact for me, too. We have always tried to follow that advice in the years when we had two incomes.

[Zoebird]

How did you "know?" Do you mean in the self-confidence sense, or in the market research sense?

It was a combination of both. I'll ramble a bit.

Self Confidence

When I started working for myself, it was a part time endeavor and I didn't know a lot about how to administrate a business. My biggest problem wasn't what I did well -- ie, actual teaching of yoga classes -- but all of the things needed to support that process. I wasn't doing my accounting well, I wasn't marketing well (or consistently). I wasn't providing a safe, consistent business so that people felt comfortable "investing" in things like workshops, class cards, etc. I wasn't doing the "business" side of the business.

I didn't know this. I only knew that 'whatever i was doing wasn't working' and that made me scared to go ut on my own. I did anyway and failed the first go (luckily only loosing $10k), but what I learned is that I required more discipline in the administration aspects. Well, I ultimately learned that. It wasn't exactly linear!

The reality is that I knew what I had to do (in most cases. in some cases I didn't), but I didn't have the personal discipline to actually *do* those things. I was immature, in a way. So, once I decided that I *wanted* to take on that discipline in order to get the benefits of that discipline, THEN i felt like "yes, of course I can do this!"

And what I learned in starting small (ie, I was still running my small business of teachign classes, so I rented a room for $25/class and then took in money from clients and marketed, etc -- I ran it like a business with spread sheets, marketing processes, branding, etc), I then built up the confidence in doing big. And when I felt confident with those processes, I just kept building on it. I started with one class, then two, then three, then workshops, and so on -- each one was "big-ifying" my business in a step-by-step process so that I could learn how to take risks (and/or how risk adverse I was, etc).

So, at a confidence level, the fear was whether or not I could discipline myself to do what the business required beyond the teaching. Once I discovered that I could, in fact, be disciplined enough to do it, then I knew that I had the confidence to go forward.

Market Research

Part of the success of my business was the market research. I've grown so much faster than I expected because instead of looking outward "what are other people in my industry doing?" I started looking inward. "What do I want? What do I want to do?"

I started to look at the "problem" of yoga studios: expensive classes; culture of excess; pressure to buy more classes; classes too long for a busy person to get to; too religious; too feminine focused; poor alignment/weird (or focus on choreography over physical therapeutics), and a myriad of other complaints that I'd had over the years.

THen I started to look at how I could be different -- what was I offering and how was I offering it so that it would be affordable, accessible, therapeutic, open-to-everyone, and non-pressured. I started to swim around a group of 3-4 core values -- which could be not only in my classes themselves but in my business practices as well (how to interface as a business, interface with coworkers, people whom I manage, contractors (like the guys who do our web design), etc). This was the firm foundation on which my business was built.

Then I had to find the location. I knew it wasn't where I lived. I learned that I could buy a business (all of this happened in very quick succession). We identified 5 places in the world. We'd really loved Wellington. I looked for a business in Wellington.

I found one for sale super-cheap, and I started to do the market research. Where was it located in Wellington? Who were my primary competitors (yoga studios, health centers, gyms)? How did they do things (local culture around these things -- so that I knew whether or not what I was doing was different or the same and how)?

From there, I identified the market and looked for how to market to them specifically and effectively. I knew my process (as a teacher) were top quality, so I knew that if i could get them through the door, I could get them to stay.

Finances

Another thing that scares people is whether or not they can finance something long enough to get the return on investment. This is the big mistake that most people make. It takes more than 6 months. It takes *years* -- and if you are going to cash out and just work a business (no outside support), then you need to have enough to support yourself for years.

Yes, you might get extremely lucky like we did and hit everything spot on and get sustainable in two or three years. But most businesses take five to get to sustainable. It just depends.

The better way to start it is to learn how to run a business and fine tune what you offer (and therefore who your clients are -- who your market is and what they respond to in terms of marketing and product/service), while you are supported on another income. The only pitfall to this is that you may not be as disciplined or work as hard because you're not taking a big risk. It just depends upon you though. Some people don't need the big risk to work hard and be disciplined -- but in my experience, most people do.

And, you know, i find it helpful to know that i could finance my business entirely (no debt -- well, the debt to myself) and then make it sustainable and make a living at it. That gave me enough security to move forward, but not so much that I felt comfortable with "biff-ing" (abandoning, failing, not being disciplined, etc).

So, yeah.

[fidgiegirl]

Thanks for all your advice, everyone. I read the Chris Brogan post, yeah, some of those sum me up! Zoebird, I also thank you for your experience and perspective. When I envision our businesses, I always see them developing as "businesses" rather than "a business." I wonder if that's under the influence of what I've read - mainly have latched onto Making a Living Without a Job as my inspiration so far - or if that's what I crave in leaving employment - not so much of the doing of one thing for most of the time. We have been keeping track of our business ideas for about two years now and have a very healthy list. Some are more passive kinds of ideas, and some more actively managed ideas. We'll see how it goes!

So I have been toying with sharing our goal with some friends, in order to put it out there more, make it more real, tie some kind of accountability to it. And with both groups that I told, both groups immediately wanted to know HOW. But we're not there yet. So the second group wanted to know this, and I said, well, we don't know yet, we have some ideas but we're speaking our goal so that it's out there. Without the goal we'll never get there. And so then they wanted to know some of the ideas on the list and I couldn't conjure any of them! Funny, there are about 50 ideas on there! So I don't know if it is really because I truly couldn't remember or if stating the goal was already bold enough and I couldn't stand to put out the ideas themselves and have them be in any way discouraged, so they wouldn't materialize in order to be spoken - yet.

[Zoebird]

I honestly, don't know what you are talking about.

First, the difference between a job-business and a business-business is that the second one ultimately doesn't need you -- it becomes passive income. Essentially, you just 'manage' the business (which is the administrative work and could be, for example, just 4 hrs a week for a given business). And, you can sell it to another person, etc, with relative ease.

My business is a combination active (job) and passive (administrative). The ultimate goal is to make it largely administrative (licensing, franchising), and providing the space for me to do work that I love (active/job -- teaching yoga). Then, I can decide how much I want to do my "job." Right now, it's mostly job and some administrative. But, in the future (and to an extent already), it's switching over.

Second, I don't really know what you mean about whatever you want to do as businesses vs job in terms of a list or how you are going to do it, etc. I think you are right to speak to your goal, but there are times when it's best to keep things close to the vest. The reality is that most people who are not self employed have no concept of it and will poo-poo your process. I think you've already experienced that to an extent, right?

So, your best bet is to keep it to a place like this -- and we can start putting ideas toward you or saying "ooh, that sounds good" or "are you planning on having it look like this or like that?" (in terms of business models, for example).

I would be interested in your list of ideas, just to see what you're thinking about doing and how you think it will work toward your goals.

[fidgiegirl]

Well now I'm confused too!

In terms of ideas, they tend to fall into the following broad categories:
- websites
- blogs
- ebooks
- various forms of rental properties
- events like crafting retreats, craft shows
- personal services like tutoring or coaching on ed tech stuff
- various forms of online commerce, but man, there is so much out there already going on . . . not sure if it ends up being a "play WITH the big boys" effect or a "play AGAINST the big boys" battle. Merits further research.

I am starting to wonder if I shouldn't start taking some coding classes to start building up some of the websites. That seems like something I could handle while still working. Not sure where to start on that, though. For example, one of them is a searchable database of language learning opportunities in the Twin Cities area. The schools/programs would pay an advertising fee to be included and there would be tiers of advertising. So to build this, where people could search by geographic location, style of program, age of student, etc., what would be the best kind of class to take? I have no training in coding. I could see taking a Coursera class or something like that as I am not concerned with getting credit/credential, I just have no idea which language is the one to start with. Ideas on this one? I hate to pay someone to do this work for me because I don't want to outlay the cash up front, plus want to build this skill for future ideas that might come along. That is just one of the website ideas.

I think we want to acquire more rentals but plan to wait at least a year to build up our rental account further and also we think (need to reconfirm this) that after two years of landlording banks are willing to lend against future potential income from the property. Still need 20% down on any property, however.

[Zoebird]

Well, those are pretty vague, but i'll throw in a dime or two.

First, a lot of them are job-based -- web site building, ebooks (content creation), blogs (content creation), and personal services (tutoring/coaching) are all "you based" -- you would be doing the job for the client. Therefore, if you were hit by a bus, the business is kaput.

So, that's how I look at business: can this exist if I get hit by a bus?

By the end of this year, my studio would "live" if I got hit by a bus. It's insured to pay those teachers who would need to be paid, and bring in an expert from australia for a few months to complete their training. From there, someone would be trained up to manage the teachers, and there's a plan in place for that as well, and then to pay that manager. The insurance that covers me in the business is designed to cover those costs.

It's like a model insuring her legs, yes?

The other three look more passive: rental properties, e-commerce, and event planning. two of these are basically renting time/space. Administrating them is dependent on a lot of factors -- that is, you can decide how hands on or hands off you want to be (which will depend upon the capital that you have to invest).

Beyond this, I'm curious in two ways:

1. these are very 'vague' -- what do you mean by web sites? what sort of ebooks are you considering developing for what audiences? what will the blogs be about? what commerce will you e?

The real estate, tutoring, and craft events seem like the only three that have a clear idea, and these are rather vague as well. Not that you have to give me all of the details, btu there are lots of kinds of "web site" businesses.

2. what experience do you have with these things? what is your background (educational, professional, hobby or otherwise), that would set you up for successfully transitioning these things into viable businesses that meet your financial goals?

Finally, what work are you doing *daily* to move you forward? I feel like you have lots of ideas, but no direction, and no clear understanding of how to get direction. Like, the person who has a lot of great ideas but they never really *act* on those ideas.

I have a friend who is starting a business (again) and this one is just as destined to fail as any other. WHy? because it's a vague idea "I'm going to give psychic readings/coaching" (btw, she's good and experienced, even if you don't believe in psychic readings, a lot of people do). and when I try to help her pin down her actual service, how it works, to whom to market, how, etc -- she gets a bit spooked, goes off half-cocked, and ends up spending a lot and earning a little and theng etting depressed.

most busineses fail due to three things: 1. lack of clarity from the onset; 2. lack of planning; and 3. lack of follow through. You have to have all three. So far, I dont really think you have clarity. You need clarity to plan, and then a plan on which to follow-through.

Just my thoughts so far.

[try2bfrugal]

Well now I'm confused too!

In terms of ideas, they tend to fall into the following broad categories:
- websites
- blogs
- ebooks
- various forms of rental properties
- events like crafting retreats, craft shows
- personal services like tutoring or coaching on ed tech stuff
- various forms of online commerce, but man, there is so much out there already going on . . . not sure if it ends up being a "play WITH the big boys" effect or a "play AGAINST the big boys" battle. Merits further research.

I am starting to wonder if I shouldn't start taking some coding classes to start building up some of the websites. That seems like something I could handle while still working. Not sure where to start on that, though. For example, one of them is a searchable database of language learning opportunities in the Twin Cities area. The schools/programs would pay an advertising fee to be included and there would be tiers of advertising. So to build this, where people could search by geographic location, style of program, age of student, etc., what would be the best kind of class to take? I have no training in coding. I could see taking a Coursera class or something like that as I am not concerned with getting credit/credential, I just have no idea which language is the one to start with. Ideas on this one? I hate to pay someone to do this work for me because I don't want to outlay the cash up front, plus want to build this skill for future ideas that might come along. That is just one of the website ideas.

I think we want to acquire more rentals but plan to wait at least a year to build up our rental account further and also we think (need to reconfirm this) that after two years of landlording banks are willing to lend against future potential income from the property. Still need 20% down on any property, however.

I think a specialized directory in your field is a great idea. I have had an online directory that I haven't had time to keep up to date in favor of other projects, but in its hey day it did quite well. Once a directory is set up and ranking it can almost be semi-passive income except for marketing it, getting links and keeping the content updated.

If you can make something you write or create once, as in intellectual property, and then sell or display it to customers a million times over, you have a great source of almost passive income in future years. These days it helps to do something that can't be outsourced to coders in a third world country with third world contract rates, so a site that requires specialized knowledge of your area would be good. The thing you would have to check into would be is this something enough people in your area search for online to be profitable, or can you scale your content to include other cities?

[Zoebird]

Well, it's not exactly easy to create content, and then from there, to sell it so that it has a long tail. I have made several little yoga videos and recordings over the years, which have brought in regular income -- but it's about $60 a quarter. So, it's not like just because you have intellectual property you're going to be raking it in. Marketing it is a huge part of it, too. I don't market those videos/things, they were mostly for my clients.

But anyway. . .