I used to be self-employed. I am more and more thinking about taking another leap in that direction, but I am not ready yet, particularly financially.
With a few years under my belt and way more business experience and education, I can see why my business failed. The reasons I am about to talk about are very common among failed businesses:
- Lack of business skills: you are awesome at what you do/your trade. If , for example, you are a Lawyer, you know everything about your area of Law and the justice system. Chances are, however, that you know very little or nothing in Accounting, Marketing or Human Resources. It creates a lot of problems with managing time, money, resources and generating sales. This is exactly what happened to me. Looking back, I see how I really lacked basic business skills.
- Doing it all alone: this is also very common, particularly upon starting. Money is tight -or non-existent- and you are trying to save as much as you can. It is understandable, but it is actually counterproductive. You end-up spending a lot of time on non-billable tasks, make more mistakes if you don’t have sufficient business skills and overall lack perspective. You can’t see the problems or the obvious. This is also a mistake I made.
- No leadership: If you have been an employee for years, the transition to be a leader and a manager can be challenging. Without leadership, your business has no clear vision or direction. If you have employees, they won’t take you seriously and you may face a high and costly turn-over.
Beyond business skills and leadership, being self-employed also requires confidence, ambition, persistence, passion and instincts.
Not everyone is made for self-employment…and it is OK.