The 6 steps every new CRE solopreneur must take
Earlier this year I wrote about some of the impacts of COVID-19. At the time, I mentioned that we will see a more flexible and contingent workforce in the future. As this change occurs, we are seeing people pivot from being employees to entrepreneurs.
I noted that, due to redundancies in the sector, some of these people may be making this switch out of necessity rather than choice. However, many will come to prefer the increased flexibility that comes from being independent – as well as the potentially higher income.
As a new breed of CRE solopreneurs enter the landscape as part of the new normal, I thought it timely to share six steps new business owners need to take to be ready to take on clients in the brave new world.
- Get advice and find inspiration
Running your own business is not like working for a company. You are your own boss which means you are now responsible for everything. If you want to take the week off, the good news is you can. That’s also bad news, if you lack self-discipline. Beware if you don’t know what to do next – not much gets done without you taking action.
No doubt you know someone who runs their own business. You should speak to them; if they know you well, they are well placed to give you some good advice. It will be helpful to have a sounding board and a support network who will be there when you inevitably face some setbacks or unanticipated challenges. Reaching out to other small business owners is the first step.
If the pathway towards self-employment in your niche is well trodden, you should speak to those who have walked down it. These people are usually willing to share some insights that could save you having to learn things the hard way. If you don’t personally know the prominent people who are already established in your niche, find a common connection and ask for an introduction.
The best independent service providers won’t be concerned about the fact that you could be future competitors; the people who are good already have plenty of loyal clients and they also know that the market is big enough for everyone to survive. These are exactly the people you want to hear from. Your time with them will also give you an early boost of confidence that if they can do it, you can too.
- Find a name or give it your name
A business needs a name; it’s the bare minimum on the business registration form. A few things to think about: make sure that it doesn’t already exist. The business registration process with ASIC should ensure that this isn’t an issue (but in case it is an issue, don’t start designing a logo and buying domain names until you know that you can use that great name you just thought of!).
Technology is another factor to consider. If you are in a line of business where having an Instagram profile to showcase your work will serve your business well, it is worth checking if that username (or some variant of it) is available.
If you can’t think of a name you like, you may well just want to call the business some variation of your name. That is probably better than going with a business name that you’re not comfortable with or not completely sold on. Once you have a name, it’s difficult to change it. Alternatively, if you start with your own name or some variant of it, you can always create a more creative entity name once your grow from being a solopreneur to an employer with a small business.
- Carve out a space
You will need a place to work. I started my business as Coronavirus restrictions had just ramped up, which meant that working from home was the only option. I will likely transition to a co-working space once I have more momentum, but personal circumstances (our firstborn arrived in May 2020) means being at home right now is not such a bad thing.
If you are going to work from home, you need a space where you can actually get work done. Unless you live alone, working at the dining room table is not a sustainable solution (and is probably not ideal even if you are a single person household). When you don’t live alone, I think the key is having a space that has a door which can be shut so you can divide the home space from the work space when necessary.
At the same time, don’t overcapitalise too early in your venture. A desk and a decent chair are the main items of capital expenditure (along with, perhaps, a new laptop). If at home won’t work, there are plenty of co-working options where you can take only the space you need. One thing to be mindful of if you think there is a chance that you would go back to being an employee if the right offer came along: don’t take the flexible out of flexible space by signing a long-term agreement!
- Set up the back-end
Above I mentioned business registration; you must be able to invoice clients. You will need to speak to an accountant (at a minimum) for advice on the business and entity structure that is best for tax purposes, and to work out how you will get money back out of the business so you can pay yourself.
I had vaguely heard of Xero three months ago. Now I know how to raise an invoice, enter business expenses (make sure you know what’s legitimate so you’re not bending tax laws!) and reconcile my business bank account. This was daunting for me; I actually asked my accountant to handle it from the outset, but he convinced me to give it a go. I’m glad I took his advice, because after I did the first month, I now don’t really think much about it because it actually is easy. There is a unique satisfaction that comes from self-reliance; it also forces you to be on top of your business, so you know where the money is coming from and going to.
You may need to see a lawyer to understand your risk exposure and to get advice about the legal entity. You should ensure you have the appropriate business insurance before taking on any client work. Setting up a pro forma service agreement is also something to consider at this stage (so you don’t get held up when you get your first client).
- Spread your message
Now that you’re legal, it’s time to get the word out that you’re open for business. The trap to avoid here is getting bogged down in creating a jumbo jet when all you need is a light aircraft. The most obvious example is a website: for some businesses a website is a nice to have, not a need to have. A website should serve a purpose; I think the most important test is that if it doesn’t help you get clients, it may not be needed (or, at least, it’s not an early priority).
The process of spreading your message can be as easy as changing your employment status on LinkedIn to self-employed. Guess what? Once you make that change, you’re now in business! The beauty of doing that is all of your contacts on LinkedIn receive a notification about it (as long as your profile settings are set that way); it’s the best value launch marketing I know of!
Rather than wasting time and money building a website (if you don’t need one), invest a couple of hours into optimising your LinkedIn profile and make that your landing page. I have a blog post about that topic too!
Make sure it showcases your skills and your experience. You should also ask previous clients, former colleagues and industry peers to leave you recommendations that act as testimonials – all the things you would want a website to do when you’re starting a new business. You can then use that information to create a basic website when you need to – or pay someone else to do it once you have revenue coming into the business.
- Start to sell
After you’ve proclaimed to the market that you are ready to serve, it’s time to secure your first clients. For some people, this can be the most daunting of all the steps – even for those who are experienced salespeople. It may feel more brazen to sell on behalf of yourself, as opposed to selling services on behalf of a company…but the reality is that it’s not all that different.
If you’re having trouble getting started, go back to basics. Most B2B selling is based on relationships; it’s about demonstrating capability and being ready to serve when a potential client is ready to buy, all the while providing value and maintaining the relationship in between transactions. With this in mind, make direct approaches to potential clients to touch base, let them know that you’re now on your own and that you’re providing a list of services. Before long, you’ll be back in the groove.
One thing to keep in mind: make sure you understand any obligations that you have to your previous employer. Any dispute will create a perceived risk to doing business with you that could stick around longer than any non-compete period. If you believe there are unreasonable restraints being placed on your ability to trade, or unsure if any non-compete applies given the terms of your exit, it is worth the price of an initial legal consultation to confirm what your obligations are. Furthermore, if you play by the rules, you may even find your former employer to be a happy hunting ground for referrals and sub-contractor opportunities.
Starting your own business requires courage. Taking it one step at a time, and making sure you have the basics covered (and not getting bogged down with unimportant tasks), makes the process easier. One final piece of advice: have reasonable expectations. Ambitious goals are worthwhile, but if you expect unattainable results, it could lead to your motivation and drive quickly turning into frustration and angst. Things take time and businesses don’t succeed overnight – particularly in the midst of a pandemic recovery, it may take just a little bit longer than you first expect.
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