June is Economic Empowerment Month at United Black America. As we come to the collective realization that the American economy has changed forever, African-Americans find ourselves particularly vulnerable. This month, we will offer strategies and tactics on all things financial and economic. Stay up to date and subscribe to our email list here.
Entrepreneurship: Do You Have What It Takes to Be Self-Employed?
You hate your job. You hate your boss. You hate being a corporate slave. You dream of the day when nobody tells you what to do, when to be where, and when you can work for yourself. But before you kick in your bosses door
and take a dump on his desk, you might want to ask youself if you have what it takes to be self employed.
These are questions that few would-be entrepreneurs ask themselves, but whose answers could mean the difference between wealth and welfare!
Can You Hold Yourself Accountable For Your Results?
You must lead yourself before you can lead a company!
One of the benefits – and drawbacks – of being an employee is that you are held accountable for making your money. Having employment forces you to get out of bed, put on respectable clothing, and work for hours on end uninterrupted. Supervisors and managers make sure that you produce tangible results for the company that employs you in exchange for paying you. The problem with being self-employed is that its easy to start slipping.
You might start your own side hustle to escape a bad boss, only to find out that they you are your own worst boss! You decide not to get out of bed until 10, since you don’t have anyone telling you when to be where. Then you decide to take 3 hour lunches. You decide to let some to-do items go undone. Then you decide to take whole days off (including weekends). Next thing you know, you are right back on the plantation working for that boss you hate so much.
If you are considering starting a side hustle and escaping unemployment, you MUST have a system of accountability in place. Set and keep regular business hours, join an Accountability Group (or start one), and work just as hard for yourself as you did for that asshole boss.
Are You Comfortable With An Unstable Income?
This is one of the worst things about being an entrepreneur: no two months’ earnings are the same. Particularly when you are starting out, your first few months (or years) can be feast or famine. One month your business may earn five figures, and the next month you don’t make a penny. Of course, this risk is accepted by many hustlers out of necessity – Felons that cant get white collar jobs, or workers whose jobs have been phased out may need to turn to their side hustles to survive.
Even if you are comfortable with the idea of an unstable income, your family may not be. Before you decide to take up a side hustle full-time, make sure that you and your family are prepared for the change. Buy insurance, have family meetings, and brush up your financial management skills. Which brings us to the next question…
Are Your Time and Money Management Skills Tight?
It s a good idea for the average employee to save up 3 – 6 months of their income, but for an entrepreneur it is mandatory! Having 6 months or more of your monthly expenses saved up will help you survive the inevitable bad business months. You do not want to risk losing your home or car due to a recession, a slow season, or a few bad business deals.
On top of getting your savings tight, you will want to take a look at your budget. If you don’t have one, punch yourself and then go check out Afrodaddy. He has a great article on how to develop and manage a budget here: How to Develop and Manage a Budget. In your first few months of unemployment, you will be forced to scale back your spending dramatically. Having a budget will help you to identify where you are able to make cuts most effectively, and will also help you set sales goals.
Bad time management skills can mean slow death when it comes to your hustle. If you are not able to effectively manage your time and prioritize your activities, you will find yourself doing a lot of work, but not getting anywhere.
For instance, lets say you have two items on your to-do list: Facebook marketing and getting your financial books in order with a financial planner:
You start marketing on Facebook at 9 am, but you end up just chatting with friends for three hours (it happens….a lot!) You go to lunch and realize that you actually havent been marketing, so you get started again until 4:30. Once you are finished, you look up and realize that your financial planner has already left her office for the day.
Money should always take priority over marketing, so a smart entrepreneur would have scheduled that meeting at 9am, leaving him with the rest of the day to
play market on Facebook.
Do You Have A Mission That Drives Your Passion
It’s not enough to just be passionate about what you do – you must have a reason that drives your activities. Passion and motivation are perishable. At the first sign of difficulty, challenge, or frustration, it’s usually your motivations that gives in first. Having a mission keeps you focused on the big picture when things get difficult (and they will), when things don’t go according to plan (and they wont), or when you start to question yourself (which you will).
*You can be passionate about fashion, but if your mission is to feed your family, you will be more driven to work through tough times. *You can be passionate about music, but if your mission is to escape having to work for someone else, it will be easier to hustle harder. *You can be passionate about web design, but if your mission is to build an online empire it will be easier to stay focused through the months and months that it takes to build a readership.
I am passionate about many things, but my mission is the re-education and uplift of my people. That mission kept me in the streets, in debates, online, and in my Accountability Group when other “revolutionaries” threw their hands up in frustration.
Can You Survive the Learning Curve
Most entrepreneurs are self-educated. If you expect to be successful as an entrepreneur, you must be willing to educate yourself in all aspects of your business. It used to be that you could just set up a booth on the side of the street and flip CDs or T-Shirts until you broke a profit. It used to be that you could turn your driveway into an unofficial garage, or walk up the street with a lawn mower and make enough money to buy groceries.
That was then, but this is the Information Age. The Web 3.0 Age. The Age of Globalization. The CD hustler on the sidewalk is being destroyed by Myspace rappers. The T-shirt salesman with a table in the alley is starving while the kid with a Zazzle account is selling his way through college. People find mechanics and lawn-care specialists via Google, and the men who get the contracts are usually branded, licensed, and incorporated.
The average entrepreneur today will need to learn business basics (marketing, finance, management, operations, sales, planning), web basics (design, SEO, internet marketing, email list management, social media), global business basics (outsourcing, importing and exporting, currency exchange rates), all on top of the skills specific to their hustle (braiding hair, CD mastering, T-Shirt designing, photography and videography, cosmetology, auto mechanics).
That’s a lot to learn, and it takes determination, intelligence, and initiative to maintain such a steep learning curve. While you might be tempted to skip over a subject, understand that it’s the one subject that you fail to learn that could make all the difference in how successful your business becomes.
One of the benefits of having access to online resources is that everything you need to know is at your fingertips. No matter where you are, you can learn to outsource, import, create financial plans, and design clothing. The only challenge is your willing to learn and your ability to manage information overload.
Before you decide to go ten toes into your side hustle, you might need to tighten yourself up in one or more of the areas above. I would advise you to plan, prepare, and prepare some more before you quit your day job. You might even consider “Straddling”, or working your job until you are making enough from your side hustle to support yourself.