Stepping into business ownership
Moving from employee to entrepreneur can feel like the light at the end of the tunnel. You’re finally ready to take the leap and work for yourself!
But there are some fundamental differences between the two. Understanding and planning for these differences will help you step more securely into business ownership.
the differences
BEING AN EMPLOYEE
Salary: A key benefit to working for someone else is financial stability and security that can come with a consistent paycheck. You know what you can expect to earn and exactly when you will receive it.
Benefits: Healthcare, 401k, sick pay, etc. Need we say more?
Work/life balance: When you work for someone else, you have hard deadlines that are typically mandated to you. It’s not unusual to to work long hours without extra pay (if you’re a salaried employee). Sometimes the ‘life’ aspect is put on the back-burner and that can lead to burnout.
Commute: This is a slightly tricky one with the global pandemic, as so many people are working from home. However, when you work for someone else typically you need to commute into an office. Depending on that commute, it can have an impact on your overall happiness. In fact, a study in London indicated that a shorter commute brought more happiness than having sex (Regus).
Support: When you work as an employee you will likely have a manager that you report in to. This person can be helpful to your role and overall career - or they might be a burden to your growth. Perhaps you can find support from your colleagues or other team members. This is a bit of a toss up and truly depends on the people you work with (again you rarely have a choice in the matter).
Vision: You may love your job, but depending on what your role is you may have little influence on the direction the company is headed. You are told what the vision is and need to work toward that accordingly.
BUSINESS OWNER
Salary: Working for yourself can lift any glass ceilings that are capping your earning potential. However, it may take a while to start earning and it can be inconsistent.
Benefits: When you are starting off working for yourself (& depending on your country), you need to independently manage these aspects yourself and eventually figure out how you can offer this to your future employees.
Work/life balance: When you work for yourself, you have a bit more control over how you structure your schedule, where you focus your energies and you can work with your clients to find a mutually agreed upon deadline.
Commute: You get to choose! Perhaps you have a home office, have your own office space, join a co-working space, work at at Starbuck or any combination of the above. It’s completely in your control. You can completely control your environment.
Support: When you work for yourself, you can pick the support you want and need. Whether you find a professional mentor who is willing to help you out, you join a professional networking group like the Peer Advisory Group, take courses targeted at a specific area of growth or lean on family & friends. You get to choose how & who helps you.
Vision: This is one of the biggest key differences. When you work for a company you’re told what the vision for the company is. Depending on your role, you may contribute to the strategy to achieve that vision. But when you work for yourself - the sky is truly the limit. You set the vision for your company and you can fulfill your passions. You have complete control about the direction you take.
so, what do we do about these differences?
From the handful of examples we outlined in the previous section, you can start to see a pattern: you have more control as a business owner than employee. However, with that control also comes a great deal of responsibility as you are solely responsible for your success.
As a business owner, there is a constant balancing act between planning and taking action. When you work as an employee, putting in those extra hours might help with your reputation within the company as a ‘hard worker’ (again, all depending on where you work). However, when you work for yourself you can put in 15 hour days, but if you’re not seeing results your path isn’t working for you. Results are truly what matters as a business owner. You don’t make sales, you don’t get paid. You don’t finish those tasks, your launch is pushed another day.
This next section will outline a few things that may help set you up for a successful transition to business ownership — or could even get you back on track.
Mission: In short, what are you doing? What value are you adding? D&Co loves the 8-word mission statement formula that keeps things pretty simple: verb (what action you’re taking?) + target (who are you doing it for?) + outcome (what are you specifically hoping to achieve or change?). Trying to get as close to 8-words as possible, removes the ‘fluff’ and forces you to use words that more accurately describe what you do.
Vision: Where do you see your business going? How big do you want to make your impact? Understanding where you want to go will help be your North Star, your guiding reference point when you set out goals for yourself. Bear in mind that things change and you may need to eventually pivot, but having that vision of where you see your business going will help make tough decisions a little simpler in the future.
Brand Values: You now know what you offer. You also have a pretty solid idea of where you want to go. Now you need to think about what your brand stands for. How does your brand do business? What is the experience that people get when they interact with your brand? These don’t need to be complicated or complex. This Minimal Viable Brand document by Andrea Linehan might help you out.
Strategy: In an earlier post, The relationship between your brains and your brand, we mentioned that the word “strategy” is very overused. In short, your strategy is the bridge between the gap of where you currently are in your business and where you you want to be (e.g. your vision). While there are many who try to give a formula to this, you really need to figure out what works for your unique business (hint: there is no one-size-fits-all). Remember: your unique selling point is that your business is uniquely yours! You may offer similar services, you may even have a similar mission to others, but how you deliver those services (and your brand values) is very unique to you.
Schedule: One of the benefits of working for yourself is your ability to control your environment and work/life balance — including your schedule. Documenting your schedule has many benefits too — you can objectively look at where you’re spending your time and if there are ways to reduce it and maximize efficiency. If you offer services, documenting an ideal schedule can also help you see the feasibility of your services, price points and ability to deliver (email us if you want a template for this!).
Money: One of the downsides to working for yourself is that you’re not guaranteed a consistent paycheck. To plan for this, you may need to make sure that you have some dedicated savings to get you through the inconsistent early months. To plan for this in the long run - make sure you have documented your sales cycle. Struggling to figure this out? Check out our sales workshop & in it, we where spend a whole section on your sales cycle. You may not be able to join these sessions live, but we have the playbacks and all assignments to help you map this out. Price is reduced to only $20 USD.
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A helpful tool to create an agile business plan: Lean Canvas
Sources: HeyTuesday, Entrepreneur, USA Today, Sources of Insight
