If you’re new to the self-employed way of life, there’s a whirlwind of information out there about what you might expect from your new life as a business owner, consultant, or freelancer.
There are plenty of upbeat articles touting the freedom from office cubicles, the end of long commutes, and yes, the opportunity for endless travel (sometimes at little or no cost). But there are also the horror stories of making the wrong hires or not getting paid by clients.
Here are six facts about life as an entrepreneur that are often painfully true.
1. You don’t make money unless you work
No one pays you anymore to sit around and do nothing. That’s what (some) salaried jobs are for. When you do earn money as an entrepreneur, it’s because you created something of actual value for someone else. The incredible feeling you get whether you’re selling your freelance services, digital products, handmade goods, or something else entirely, is what will motivate you to push through the hard times.
2. You can count your best customers on one hand
It’s much more lucrative if you can retain existing customers and increase their purchase rate. These customers pay you on-time, rehire you for multiple projects, and purchase goods from you multiple times. It’s these customers that allow you to grow your business without worrying about having to move back in with your parents, or close your business and get a job working for someone else.
3. Not all customers are created equal
Eventually, you cross paths with crazy people as a business owner, and every once in a while, you end up working with one of them. If you bring on a bad customer, do your best to finish your work, document your payment terms agreement, and if worst comes to worst, be prepared to walk away with a loss. Don’t fret though—the sooner you walk away, the sooner you can get on to finding better customers to work with.
4. You spend a lot of time finding new business
It takes a long time to reach the point where you have enough regular customers that you have the luxury of turning some business away. Even if you don’t actively submit freelance proposals, you still spend a considerable amount of time building relationships, nurturing leads, and bidding on jobs in other ways. You’ll spend a lot of time doing the sort of things that help nail down new business, but doesn’t necessarily pay you yet.
5. Working from home is too good to be true
In theory, you can set up a home office, sleep in everyday, work with a cup of your favorite coffee and your pajamas on, and still accomplish everything you need to get done. But, chances are you won’t be able to stay productive like that. The solution to this problem is simple: collaborative work spaces like WeWork have sprung up in all major cities around the world.
6. No matter what, it’s better than your old job
If the going gets rough as an entrepreneur, just remember what your old job was like. Even if going at it alone just isn’t working out, you have nothing to be ashamed of—plenty of great entrepreneurs have succeeded in going back to a full-time office job. It’s not the worst thing in the world when you choose the right company to work for.
Photo credit: Ana Raab