The Pros and Cons
The decision to go it alone is one of the make or break moments in the lives of most entrepreneurs. At first it’s really scary and exciting, which is a buzz. As time progresses, however, things can get tough – you could face financial pressures or spend long hours getting established. If you’ve been running your own business for a long time, you can also hit blockages that, if they persist, can really sap the fun from what you are doing.
So what are some of the pros and cons of running your own business?
- Just surviving for the first year or two
- Creating everything from scratch (from business processes to which technology to use)
- Building a team
- Finding enough new clients (that elusive marketing thing)
- Time pressure
- No boss telling you what to do
- Getting to choose who you work with (team members and clients)
- No values conflicts (having to do something you don’t agree with)
- Earning an income that might exceed what you could earn working for someone else
- Earning less money than you would working elsewhere, but still being very happy (and what’s that worth?)
- Creating a work life balance that ordinary employees will never experience.
- Building a valuable asset that can be sold in the future to provide financial security for you and your family.
Overcome the cons
The good news is that there’s a solution for every single issue that you face in your business. There are others who have walked the path before you, who will share their hard (and painfully earned) experiences with you, if you’re up for it.
The biggest challenge is being open to new ideas and being prepared to grow at a personal level. Make no mistake, you have to grow as an individual when you go into business for yourself. The buck always stops with you. In every business I consult with, the major blockage to growth is always the owner. This is true in my business too!
It can be very confronting when you realise that:
- it’s not your team’s fault (because you hired them)
- it’s not the computer system’s fault (you bought it and might not be using it to its full capacity)
- it’s not your clients’ fault (you took them on and can always drop them at any time)
- it’s really none of the above – it’s you. Ouch!
So what can you do to ensure you’re a business owner who doesn’t just learn things the hard and painful way?
Here are a few tips:
There are some great business biographies out there with plenty to teach those of us still on the way up. Don’t just stick to the financial sector either – there are excellent lessons to be learned from entrepreneurs in a wide range of industries and professions.
Get a coach or mentor
An external perspective really adds value and challenges your own ways of thinking. This is a good thing.
If you really feel something strongly, then run with your decision and don’t second-guess yourself.
Invest in yourself
Spending time and money on improving your skills and knowledge is not a cost, it’s an investment. An investment pays you back with interest.
Identify the businesses you love and get in touch with them
Ring them up and arrange a visit. Find out what they did that worked, and what didn’t. You’ll be amazed at how generous successful business people are with their time.
Think like a business person
Think and manage your business like a business person. Trust me, if this isn’t your natural style (and it wasn’t mine), there will be some serious personal growth to go through. It’s worth it to master the core skills of running your own business, which are:
- financial management
- team building and people management
- strategic thinking and planning
- great execution skills
Copy as much as you can
Apply your own creativity of course, but most of what you want to do has already been done. Don’t fool yourself into thinking you need to reinvent the wheel.
Do a business related course
If you’re really serious, maybe even consider doing an MBA. A standard education will get you standard results. Get a business education and watch yourself really start to grow, mature and fly.
Going it alone and starting your own business is a brave and exciting choice. If you’re prepared to keep learning as you go, a rich and fulfilling journey awaits you.
Mike Godfrey attended one of the first courses I ran for advisers in the UK nearly 10 years ago. He is the founder of two successful Financial Planning firms; the first, FS3, became a high profile and award winning firm, winning New Model Adviser of the Year ~ South East Region in 2006 and 2007 and Bankhall Member of the Year in 2006. This success led to FS3 being acquired by the wealth management / employee benefits division of a global financial services business in 2008. Mike stayed with the business until 2010, then founded Cube Financial Planning, a business dedicated to putting its clients first.
Between 2007 and 2010, Mike was a Director of the Financial Services Skills Council. In both 2007 and 2008, Mike was included in Professional Advisers ‘Britain’s Top 50 Most Influential Advisers’ list and in 2012 appeared in the ‘New Model Adviser Top 100’ list.
In 2014 Mike became a member of the Education Committee of the Institute of Financial Planning.
“The first time I really had to back myself was in 1993, when I made the decision to move from the financial services advice wing of a law firm (where equity wasn’t an option) to a Wimbledon-based firm owned by two guys in their mid 50s who were looking for a management succession option.
I’d always felt that getting an equity stake in an advice business was the right way forward for me. This worked well for a few years and I acquired 20% of the business, but one of the partners suffered some health problems. This changed the plan and shortened the timescales, so we sold the business.
Looking back this was one of the hardest periods of my career. I had a young family and was travelling long distances to and from my home, while working very long hours. There was a great deal of financial pressure and uncertainty as to whether all the hard work and risk would pay off. Fortunately it did and led to a situation for the first time in my life where my wife (Diane) and I had a capital sum (albeit still with a hefty mortgage and school fees to meet).
After several years working with the acquirer (a large privately owned bank), I made the decision (supported by Diane) to leave and set up FS3 Ltd, which we formed in 1999. At the time I was on a good salary and final salary pension scheme, with significant management and staff responsibilities. It felt very strange on the first Monday morning to be on my own in a small room in my home with a round pine table, a phone, a laptop and an empty filing cabinet (not to mention a 12 month non-compete clause). We had enough capital to cover our domestic needs for a maximum of 18 months and I had agreed with Diane that if it wasn’t working within 12 months I would get a “proper job” again.
Despite the challenges, I was determined to set up FS3 on what I felt was the right basis – by that I meant building long term relationships with clients focused on “servicing” not “selling” and not taking any income until we had earned it (i.e. no indemnity terms). This turned out to be exactly the right approach and whilst the cash flow in the early years was slow, we built a financially secure business with a strong renewal income.
I can remember to this day the temptation of setting up a new employee benefit pension scheme for one of our City clients on an indemnity terms basis, which would have solved our early years cashflow problems “in one stroke”. Fortunately though, I backed myself and stuck to my principles and was happy with the decision I made.”
Bringing The Fun Back Into Your Business
Unless you’ve done an MBA, or some other formal business study, you’ve probably learned everything you know about managing your business at the coalface. There’ll be some positives in that to be sure, but I daresay there’ll also be some gaps that, if you could fill them, would allow you to progress a whole lot faster.
For more information have a listen to my podcast here. (It’s under 7 mins long!)
Putting Your Ideal Team Together
Somewhere down the road you start to realise that your team isn’t really working at the level you require. You hand work over to a paraplanner or administrator and they have a stab at the job, but often they come back to you with a query, or for you to check their work. You’re busy with your other key roles in the business, so the work starts getting stuck at your desk.
For more information have a listen to my podcast here. (It’s under 8 mins long!)