A couple of times a week, I am contacted by people who are interested in going into business for themselves. It might be that they just want to be a freelancer or an independent consultant, but often they also want to start and grow a business. I find that a lot of people are fascinated and excited by the idea of not going to work each day, charmed by the idea of working from the comfort of their own home and avoiding sitting through meetings where they feel that nothing actually gets done. What’s not exciting about that?
I get a buzz when people come up to me afterwards and tell me that I gave them the confidence to go out and do it! There is definitely a growing trend towards businesses and organisations shrinking, and utilising freelancers on a more regular basis. I have now lost track of the number of freelancing websites that you can engage a website developer in Estonia to help you with your WordPress site, or a graphic designer in Hong Kong who will design your business cards for you. The advance of technology is obviously driving this, but so is the reality that things just don’t have to be as they have always been. I believe that as consumers, we are driving the freelancing trend. We want personalised services, not en masse distribution, and we also want it to be cheap and fast.
Large organisations just can’t compete with my graphic designer that designed me a logo for $5, for instance. So, if you are deciding whether or not to take the plunge into the world of self-employment, I encourage you to think carefully about my tips below. Everyone is different, and these are mainly my experiences. However, I continue to work with a lot of independent freelancers, so my views have adapted based on their experiences, too.
My resignation story
It's not a decision you take lightly: resigning from your job, without another job to go to. People will tell you it's brave, that it's a huge risk, or they might even tell you it's selfish. They might be right, it's sometimes all three. Don’t listen to them though, they are just too afraid to even consider doing it themselves. If you are passionate about what you are good at, and are confident in your abilities, you have to at least explore the option. So why leave the comfort and security of a job, regular paycheck, and annual leave?
Did I mention a regular pay check? For me, it was primarily about learning and family. I felt that I had stopped learning. I was an owner in business with three other shareholders, but what had started out as an exciting business eventually became a job. The business was successful, I was earning more than enough, but I was unhappy and unfulfilled I didn't feel valued, I felt I carried the lion’s share of responsibility for delivery and was expected to wear half a dozen different hats. Earlier than I recognised, it stopped being fun, and fundamentally, I realised I was stuck. Stuck in a situation where I wasn't going to grow, I had sadly reached a point where I felt there was nothing else that I could learn from those around me. That, combined with the fact that I felt I wasn’t being treated with the respect I deserved because I was the youngest shareholder in the partnership. I felt that now was my chance to take control and to invest in myself for once. I was always helping others, putting their interests before mine. Often working late into the evening, while they had long gone home to their families. This feeling of discontent continued to grow inside me, to the point that I became more and more bothered by things happening around me or being directed at me. Things that might not have fazed me as much in the past.
As it happened, I hadn’t realised until much later that it had bothered me so much. I came home one Thursday night, and my Wife could instantly tell that the day hadn't been a good one, and asked me what had happened. I simply said: "If I didn't earn any money for 6 months, would we have enough savings to get by and pay the mortgage?" She sort of looked at me strangely, saying, "Yes I think so." With that I announced, "Well, I’ve had enough. I'm resigning. I'm going to set up and go it alone."
The next day, I met with a few friends, who had also had gone out onto their own. I tested my idea with them. "Would it work? What’s it like? Could it work for me?" I asked them. They both said yes, and that was that. My mind had been made up. In saying this, I spent all weekend in a state of turmoil and indecision. Could I really do it? Could I make enough money to support my Wife, and 8-month-old little girl? Would my clients follow me and be loyal to me? I didn't sleep much as a consequence, constantly thinking about all the possibilities, how it could go well and how it could go wrong.
On Sunday night, I messaged my Managing Director and major shareholder of the company and said that I needed to see him first thing Monday before he went off for the day. I knew that, with my mind made up, I had to resign as soon as possible. It wouldn’t be the right thing for the business to wait any longer. Monday would have also been my Dad's 59th birthday, but he had passed away a few weeks before his 46th birthday. He worked too much, he was tired, stressed and under too much pressure.
One day his body couldn't handle it anymore and gave up on him. He collapsed from a stroke during a meeting at work and never came home. It’s not something that I talk about with people often, but losing my Dad in the way that I did, drives pretty much most things that I do. I have always said that I wasn’t going to put myself in the same situation he did, and I wanted to be around longer than 46 years. But I felt that I found myself on a similar path, and I needed to do something about it. My fitness was improving, but I was still overweight, and I often drank too much red wine. I just wasn't healthy.
I had to do this to make sure I made it passed 46, and what better day to resign than on his birthday. So, after another sleepless night, I was in the office early and waiting. I couldn't eat breakfast and figured that once I resigned I would probably be sent out on gardening leave, so I would eat then. Straight away, as soon as I sat down with the Managing Director, I announced my decision.
"I have asked to meet with you this morning because I have decided to resign. I am going to go out onto my own, as I believe it's the right thing to do by myself and my family."
To say my MD was shocked is an understatement, and unfortunately, he took it personally. We had effectively built the business from scratch, and here I was, walking away from it. My name is still associated with the business more than three years later, so it was a pretty significant event at the time. Others tell me now that it was a major turning point for the organization. I was angry about my treatment at the time, so resigning in the way I did, out of the blue to everyone, simply felt amazing. I was in control, I felt liberated, and all of a sudden the months of stress and bitterness I had been feeling were lifted from my shoulders. That was it, I had done it. I called my Wife and told her. She congratulated me and told me she was proud of me. With that, I walked straight down to the Department of Commerce and registered my company name. And then, with a more considerable amount of excitement, I walked down to the Apple Store. I had some shopping to do.
Before you quit
Quitting your job to go out alone is not a decision that you are likely to make easily. When talking with people who are thinking about it, I always ask them why: Why give up the security? Why give up the career opportunities that are afforded to them when working for someone else? Don’t you want to run the company? Most people answer back with: “Because I don’t want to work for anyone else.” This is a great reason. I wanted to work for myself because I wanted to control the who, what, when and where aspects of my work. I didn’t want to have to be at my desk by a certain time, because that was when my team got in. I also did not want to be locked into working in one location. Most importantly, I wanted to choose who it was that I worked with. My tips for quitting:
- Look at quitting your job from the standpoint of your worst-case-scenario. What if you don’t make any money at all? Could you survive? I left my job with savings that I knew could cover me for about six months, in case it all went wrong and I didn’t win any work. Complete a budget and work out what money you spend each month, allowing you to know exactly what you need to plan for.
- Speak with your accountant and have them give you advice on your current situation, as well as what you need to consider as a sole trader or company director.
- Talk to your friends and family about your plans. Trust me, you will need their support.
- Do you have a restraint of trade in your employment contract? It pays to check and consult a lawyer about this, as there may be restrictions on what you can and can’t do once you leave your employer.
- Prepare to lose friends that you used to work with. My resignation was taken personally, and despite leaving positively, those that I worked with closely weren’t as positive.
How will you operate as a business?
If you are considering making this big step, ensure that you have had considerable experience in your market and regular clients that you work with, who you are fairly sure will follow you instead of staying with your current company. Or, if you are starting a business, it is imperative that you thoroughly validate your idea. I left my role with about 7 years of experience in the local market, and about 9 years of experience all up. I had previously had the benefit of working in 2 start-ups and was fantasising about going out on my own for a long time. One of my bugbears and frustrations through my last job was that often I was told that I didn’t have enough “grey hair” to take on further responsibility or engage with a higher level of the client. It was ridiculous, and I rationalised afterward that the person giving me this feedback just wasn’t sure of what it was that they needed to do to develop me. There may have also been an element of wanting to keep me at a certain level too, but that could have just been me being cynical. In addition to your experience, you really need to understand how the market works. Do you know for sure that companies are happy to engage with a “freelancer” or “soloist”? Do your clients have preferred supplier agreements that your previous employer is locked into, which basically means you would be locked out? How competitive is the market? Can you compete as an individual? My attitude is that of course you can, but are their benefits that a larger organisation can deliver as opposed to you operating on your own. I am a positive person, so I would always say that I could deliver where others can’t, and can actually turn the benefits that larger organisations talk about around to help me. At the end of the day, you have to rely on yourself, and yourself alone. No one else can help you be successful. A long-term friend of mine is such a successful consultant. She now has new independent consultants approaching her, expecting that she will share her work and clients with them. What they don’t see is the years and years of quality delivery and service that she has given to organisations.
My tips for operating as a business:
- Complete a competitor analysis of who you would be competing against. Ask: how much do they charge? What benefits do they offer? Can I do it differently?
- Create a lean canvass for your business to understand exactly what problems you are solving for your clients.
- Consider potential partners, and who your ideal partner is for you to be satisfied.
What are you going to give up?
There is no such thing as a regular paycheck, I cannot say that enough. Sometimes it is regular, but you are better off planning for it not to be. When I ask you what you are going to give up, I mean you need to be prepared to forego some luxuries when you go it alone. Effectively, you need to forego consumerism, refraining from thoughtlessly going out and buying things like you probably used to. Become your own “purchasing department”, scrutinising your every purchase. Some people I know have been lucky and they have had consistent work, and their lifestyles don’t seem to have changed too much. They continue to eat out regularly, go on lots of holidays, and always have the new gadget.
As a business owner, I believe the ones that stay in their markets in the long-term do so because they are tight. From a personal perspective, I think you can get into the trap of buying things as a “reward” for your hard work and achievement. You never know when the market might turn, and it’s inevitable that at some point, you won’t be able to send any invoices out. After an initial quiet period when I started, I made good consistent money. In hindsight, I was complacent. I was so used to money just being in the account that I never worried about it. When you are on your own, things can change very quickly. You can lose a client or two, a couple of projects don’t come off, or you can get a couple of large bills at home – all at once.
Having had this perfect storm myself, the learnings I took out of this was that we needed to be more conservative with our money at home. The best advice that I can give now to anyone starting out, or even already out there and established, is to try and live a more frugal lifestyle. I always remember my parents had to save up for things, or put things on layby. They could never just go out and get something at the drop of a hat. I remember my Mum sending my Dad back to return a CD he had bought her for Mothers Day because it was too much money (CD’s still cost $30 back then).
So, this was just how we needed to be. I needed to stop taking for granted the fact that there was always money in our account. Being frugal is not as bad as it seems. As a freelancer or entrepreneur, you are already self-motivated and driven. Use this ambition to turn that focus towards saving, and looking at how you spend money. The other thing you will be giving up is corporate security. You probably don’t know what this means to you until you don’t have it.
Many technical and specialist professionals I know have grown comfortable working in a large corporate environment, and are used to being wined and dined and handed things on a platter. People come to you. They come to you for advice and for experience and oftentimes seek you out to get involved in various projects. As an external consultant, the level of esteem that you might have held internally doesn’t actually automatically transfer. As a consultant, if you do nothing, no one will be beating down your door. I know a lot of people that have struggled with this adjustment and their egos have taken a massive hit.
My tips for giving up luxuries:
- Don’t buy expensive, luxury brand clothes. You don’t need them, and no one really cares. By working alone, you can get away with wearing the same clothes across the week.
- Buy a lunchbox, and get into the routine of making your lunch and preparing some snacks each day.
- If you feel you need to fly business class, use your frequent flyer points to upgrade. Never pay for it, it’s a waste of money. Yes, we aspire to it. However, I was once told that wealthy people buy luxuries last.
- See how long you can make something last, such as keeping your phone for an extra year before replacing it.
- If you do have to travel for work, you can save money by traveling at night time as this reduces the nights you spend in a hotel. If you are traveling for business, you shouldn’t be spending all your time in your hotel room anyway, so it is just dead money. Yes, you will be tired at the end of it. However, if you are watching your expenses carefully, you’ll get satisfaction from knowing you have saved money and increased your margin.
Stay tuned for part two of Matt Hewitson's five-part feature, "How To Quit Your Job and Go It Alone"