I, like many others, found myself starting my own business, not by design, but by circumstance. After 20+ years of working agency and client sides of marketing, my seemingly two-faceted career path took on a dimension I’d never before considered.
I was a self-proclaimed loyalist to any company I was employed by, so the thought of establishing, building, running, and managing my own consulting business was a possibility so distant that I’d never given it serious consideration.
But as life would have it, my employer re-organized and I was left to determine what was next for me. I immediately sprang into action to find my next full-time employment. Having held my last post for more than 8 years, the shifting job market was one more curveball that I wasn’t expecting.
At the same time, my seemingly steady career path was about to take a turn, one that would present me with opportunities and challenges.
During this time of transition, I was approached by some CEO’s of mid-market companies in my network to help them with some of their marketing challenges. What started out as a temporary side hustle ended up being a facet of my work experience that I didn’t even know I needed to stretch my capabilities and confront my own self-limiting beliefs.
Thus, ISH-Productions was born somewhere in between, “this will be good to do until I find a real job,” and, “I can’t imagine ever doing anything else.” More than 3 years have passed and along the way, I’ve had the good fortune of working in and alongside companies of varying industries ranging from mortgages to construction to manufacturing to professional services.
I recognize now that my career path is really a journey. A career path merely indicates a clearly defined set of achievements or requirements to move up the ladder. The metaphor of a path embeds in our mind that one’s career is visible, stable, and predictable.
Conversely, with a career voyage, there is some degree of control, but there is also a degree of happenstance. Happenstance would be the wind changing direction or moving water currents. Now I got it. I am on a career voyage! And when you’re on a voyage, you never know what opportunities are waiting for you beyond the fog.
But before I started on this leg of my journey, there were a few essential lessons I had to learn about being a solopreneur. As with any employment, there are pluses and minuses.
Here are 10 lessons I learned about going solo and starting my own consulting business.
- STRUCTURE BEFORE STRATEGY
- PAYMENT & TERMS
- CHECKS & BALANCES
- ALWAYS BE BRANDING
- BUILD ALLIANCES
- LEARN TO WORK ANYWHERE, ANYTIME
- LIFELONG LEARNING
- REFERRALS…GIVE & RECEIVE
- STAY NEUTRAL
There are three immediate things you need to do when starting a company. First, decide which business structure you want. There are six different types to choose from: Sole proprietorship, Limited Liability Company (LLC), Cooperative, Corporation, Partnership, or S Corporation. What you decide will have legal and tax implications – so choose wisely.
Second, decide on a company name. You can do a preliminary trademark search to see if the name is available. Legal counsel will need to do the necessary background check to verify its availability.
Lastly, do a search for the domain you want using a reputable domain registrar. Ideally, the domain should reflect the exact company name. There are workarounds but it’s not ideal. If your findings show both the trademark and domain are clear, then you’re in a position to retain an attorney. If not, start over and find a name that you can own online and offline. While you’re at it, I advise owning the domain of your name. Whether or not you plan on ever doing anything with it, you can point it to your business site. This way if someone Googles your name, your business website appears in the results.
There are typically three types of payment scenarios when it comes to consulting. Hourly, project-based, and retainer. Determine your monetary value upfront.
There are a few ways to approach it. Start by figuring out what your hourly rate is. If you’re used to being a salaried employee, here’s a good rule of thumb to follow when determining an hourly rate:
Calculate your former salary by the hour and mark it up 1.5 – 2X to cover the cost of your solopreneurial endeavors. If this sounds steep, remind yourself that you’re now paying for your own business costs from administration to marketing and everything in between. On top of that, there are the tax obligations of being self-employed and the costs of health insurance.
There are other clients that will prefer you to fix your pricing as a project fee. This could potentially work in your favor, but beware clients that use this to let the project scope surpass the bounds of the original expectations. This is why it’s imperative to include in your proposal only what you plan to deliver and if there are add-on requests, renegotiate the fee.
Then there are the coveted retainer fees. Even if it’s at a lower hourly rate, retainer-based pricing can be advantageous simply for the consistent involvement. Plus, it gives your client the reassurance of having your services at hand.
Payment terms can and should be negotiated. Most companies offer a standard net 30 days. For my business, I specify net 15 days. I can’t say that all my clients pay within those terms, but some do.
Be wary of slow paying clients. These are the ones that can stretch it to 45 days or more. This can be devastating for a small business, where cash is everything. If you’re faced with that, then negotiate by asking for 50% paid upfront or stipulate that they stick to the net 30.
This is an area that requires a fair amount of discipline, attention, and time. You need to keep your business financials separate from your personal. Sounds easy enough but it’s very easy to blend the two. A good place to start is to set up a business checking account and get a business credit card.
Be vigilant in keeping track of business expenses (keep all receipts) and log them into whichever bookkeeping system works best for you. There are several DYI options like QuickBooks, Wave, or a simple Excel spreadsheet.
Alternatively, you could go the route of using an accounting app. Tracking income and expenses using one of these methods will be helpful when it comes time to prepare your taxes and income statement.
Take the time to research accounting methods. Most business owners use either the Cash Method or Accrual Method. The main difference between them is timing – recognizing when and how revenue comes in and expenses are paid out.
Also, don’t overlook saving for your retirement. Having a small business, it’ll be important to find tax advantages to minimize what you’ll need to pay, while at the same time put away for your retirement. One way is to set up and contribute to an SEP (Simplified Employee Pension Plan) IRA.
Setting time aside to market yourself (even for us marketers) can be difficult. It’s easy to get so caught up in the work you were hired to do that you don’t devote enough time to develop your own brand.
If you’re a marketer, then great – develop a plan then execute it, solicit the help of others to define your unique value, what makes you different, and what services do you provide that solves a problem.
Once you’ve determined all that, socialize it across every possible channel. This is an ongoing process, not a check off the box and move on concept. If you don’t promote what you do, who you do it for, and the value it brings, no one else will – trust me.
This brings me to my next point. Whether you’re gainfully employed now or are just starting out on your own, the alliances you build through employment, school, memberships, associations, etc. will serve as a solid foundation to tap into when you need them.
Take the time necessary to make those connections and then nurture them. Keep in touch. Meet up for that coffee or drink. You never, ever know when that one connection could become a bridge to elevating your career or introducing you to that next important client.
Don’t neglect alliances with strategic partners. Inevitably there will be one or more aspect of the work you do that will require the expertise of someone else. Build those partnerships, agree on payment arrangements/terms, and then call upon them as needed.
Contrary to the obligatory 8:00-5:30 work day regime of a salaried employee, working for yourself requires resourcefulness, flexibility, and availability. Technology has made it easier than ever to communicate, host meetings, and share documents. If working from home isn’t your thing, either because of distractions or the need for social interaction, consider renting space from one of the co-working office spaces popping up everywhere.
I also encourage in-person meetings with your clients and working onsite. There’s a lot you can gain by working in their business that you risk missing by working elsewhere.
An ongoing commitment to learning is essential to personal and professional development. Regardless of what higher education you may have, keeping current and sharpening your craft or learning a new skill will aid in competitiveness and employability. Continued learning can take the form of formal learning, informal learning, or self-directed learning.
Online learning has risen in popularity. LinkedIn offers a subscription-based online learning course through Lynda.com that offers a wide variety of topics in software, business, and creative skills. Take advantage of the multitude of free webinars, podcasts, and books that will satisfy whichever way you like to learn.
I would be remiss if I didn’t also mention the countless blogs, whitepapers, and articles that are available at your fingertips. Follow, like, bookmark, and seek the information you need to stay current and relevant. Undoubtedly, for whatever you’re looking for – there’s an app for that.
One of the things you won’t get working on your own is a formal review of your performance. For many that’ll be a relief; however, we all need to receive constructive feedback on our performance in order to grow. What might not receive from a client is an acknowledgment of the work you’ve done, unless you ask for it.
I’m not referring to the customary acknowledgment, but rather real feedback. This may be one of the hardest things to ask for but is essential to do. Ask your client for truthful, specific feedback. If some or all of the feedback could be used as a testimonial of your work – ask for that too. One of the biggest compliments you can get is a referral. If your client refers you to another company or colleague consider that to be the best gift of all.
For me, this has been one of the most difficult aspects of being self-employed. You did great work, they loved it, but due to circumstances, they don’t continue to engage your services. It might be due to budgetary reasons, the financial health of the company, a restructuring took place, or that you simply have fulfilled the work they brought you in to accomplish.
This is where you ask if they know of anyone else in their network that could use your services. Don’t assume they will think of this on their own. Ask.
The other equally important point here is knowing when to walk away. Either it isn’t a good fit, or the work might be best served by someone else. Making an introduction by referring them to someone else isn’t only the right thing to do for your client, but it is also good karma. Pay it forward.
Depending on the level of engagement you have with your client, staying neutral can be challenging.
In my case, I’ve worked inside companies in an interim role where it’s easy to get caught up in the office politics. Resist it at all costs – stay neutral. Remember that the company has hired you as an external consultant and is depending on you to remain objective and unbiased.
Food For Thought
Whether you intentionally or unintentionally find yourself going out on your own, remember two things: First, your career is a voyage and the more willing you are to navigate unchartered waters, under any condition, the happier, healthier person you will become.
Secondly, in order to be successful as a solopreneur, you will need to be highly effective in influencing others. The art of persuasion comes naturally for some, and not for others. In either case, it is important to brush up on techniques and amass tools by reading books that are focused on persuasion, motivation, and influence! Here is a list of 10 books to choose from.
Michelle Mariola is founder & director of ISH-Productions, a Chicago-based branding and marketing company whose mission is to help emerging to mid-market companies develop their marketing strategies and brand identities.