Being your own boss is an idea that has a certain sense of glamour in 2020 with the rise of entrepreneurialism. But today I’m going to share with you the bad side.
Now you could say I’m part of the problem on this topic. I create content that helps people become their own boss. I interviewed Andrew a while ago about he’s managed to make his private label business a full-time endeavour at just 19 years of age.
And whilst I love seeing that, I also know that entrepreneurship isn’t for everyone. There are some people who freak out the moment a problem arises, not realising that the entrepreneurial journey exists within the context of solving problems.
If you aren’t solving problems, you aren’t an entrepreneur.
So, in an attempt to scare some of you who aren’t meant to try and be entrepreneurs off, I thought I’d let you know the things I dislike most about being my own boss, whilst also offering some remedies for how to overcome them.
The Worst Things About Being Your Own Boss…
Number 1: The Weight of Responsibility
The only income I receive is from the businesses I run and the investments I make. I don’t have a salary, neither does my wife. So we are fully dependant on the income we generate ourselves. This is all well and good when you are an established business, but when you are in startup mode it doesn’t matter how much revenue you are doing, a cashflow crunch is never too far away for a variety of reasons. We’ve had £50k months yet still not drawn cash down because we know with revenue comes the need to increase output to keep up with the increase.
This weight of responsibility can easily cause a tendency to overwork if not kept in check. In order to keep it in check, my biggest recommendation would be to prioritise margins over materials.
It’s really easy to rush into enjoying the spoils of revenue without making provision for the challenge of cash flow - don’t allow lifestyle creep to stunt the growth of your business or cause you more stress than is necessary.
Number 2: Tax & Legal Implications
As a salaried employee, you just pick up your paycheck each month. Your employer’s payroll department handle your taxes, and unless you have any other investments there’s no extra tax to pay, self-assessments to be carried out or films to be filled in. It’s easy.
As your own boss, you need to be involved in annual returns for your company, self-assessments, paying corporation tax, paying VAT, paying personal tax.
It takes time and energy to manage these aspects and shouldn’t be taken lightly.
To overcome this challenge, I’d recommend first reading Profit First by Mike Michalowiz, then outsource your bookkeeping, and finally lean on your accountant.
Number 3: The Danger of Loneliness
There’s no doubt about it, one of the most challenging aspects of being your own boss is the loneliness of a lack of colleagues. That’s why we’ve started saying to the staff we hire that we want to foster a family atmosphere in our team. We’re making a point of starting weekly video calls and keeping Slack channels open for “water cooler” chat.
Because whilst remote working has its benefits, it also has its challenges. Reminder: if you want me to share some thoughts around the best things about being your boss, just let me know in the comments and I’ll get on to it.
For more information on meetups we run for entrepreneurs, see here: https://www.bendonovan.co.uk/network-nights
Number 4: Making Tough Calls
Which products to launch? Which expenses to cut? When to hire? When to fire?
We just went through a round of interviews for a new position in our organisation and were left with 2 candidates who we really liked. So much so that I tried to find a way to employ them both, we just couldn’t make it work at this moment in time. But making that call and subsequently letting that person know, despite having built a great rapport with them, it was a tough email to write.
However, the impact of your life and your business will grow in direct correlation to your ability to confront the tough calls and make key decisions. So it’s not always enjoyable, but to overcome this challenge you need to keep your eyes on the vision.
I hope these have helped open your eyes to the challenges of entrepreneurialism but also given you some steps to overcome the challenges too.