Now that the U.S. economy has officially tanked — again — and the job market is expected to get worse, I was nonetheless excited to run across a couple of how-to articles on finding a job when one is middle-aged and out of work. Someone had the key! My optimism was short-lived when the authors admitted that the jobs don’t exist and our options were to become consultants, volunteer, become interns somewhere, buy a franchise business, or start our own business.
For me there is only one choice: starting a business. It really doesn’t matter what kind of business. You can take a hobby and expand upon it, start your own firm based on your job experiences, or, if you have a new idea, act upon it whether it’s brick and mortar or an online venture. I started my communications design studio when I was the beneficiary of a corporate downsizing in the ‘80s (yes, it happens every decade). One of the corporate divisions found out I was leaving my creative director job and they wanted me to continue doing their work. I now had a client in my pocket that gave me a lot of work and soon I had a full studio, employees, and 18 years in business. I no longer have that business because I decided to become a CD for another agency, a move I regret every day. (It’s a long story.) Anyway, I’m working towards business ownership again. I now know what I didn’t know the first time around and hopefully I won’t make the same mistakes. Following are a few of the things I learned and implemented when I ran my studio.
Get a good accountant. Yes, you can use software like Quicken or QuickBooks and do taxes yourself, but that takes time. I used Quicken at the suggestion of my accountant to track expenditures and I’d give him a copy of the files. He’d do the corporate year-end taxes and I benefitted from his knowledge of business filings. He saved me untold thousands.
Get a good lawyer. You may not need one right away, but when I incorporated the business, he was invaluable and there were a few times when I had to sue to get paid. Yep, there are clients that don’t pay their bills. Imagine that.
Set up your business as a DBA at first and then incorporate later. The DBA will allow you to open a bank account in your business's name. Many clients don’t want to cut checks to an individual but will do so to a company entity.
Take 20% of every paid invoice for your work and put it into a company savings account. When tax time comes around, you’ll have plenty to pay withholdings, sales taxes, disability insurance, or whatever you’re responsible for.
Write up a business plan. It doesn’t need to be elaborate to be effective. Steven Spielberg sold the concept for the movie E.T. in a couple of sentences. Explain what it is you want to accomplish and how, and add some data supporting the plan if necessary. It’s a good thing to have if you need to get a loan or enlist support from others.
Keep it simple. The lure of a fancy office is great, but start small and work out of your home for as long as possible to keep overhead low. These days office equipment is inexpensive. My first single MacOS system for graphic design work cost me almost 25 grand including basic software. It’s amazing what you can get today for that kind of bread.
Join your local industry organization and the local chamber of commerce and any other networking groups. Industry groups are full of people who have been through the trials of business and they’re eager to share their experiences. Chambers of commerce offer many services, such as group health insurance, to small businesses.
Advertise. This is business dependent, but you can do a lot for little money. Print up flyers and distribute them to businesses that need what you’re selling. Run ads in your local publications like high school programs, neighborhood newsletters, and pennysavers. Mail postcards. Above all, put together a business website. It’s where potential customers and referrals from your conventional efforts will turn to learn more about you and your company.
Treat everyone as you’d like to be treated. Develop and maintain strong, trusting relationships with vendors and treat current and future employees fairly and honestly. Hire good people and then get out of their way and let them do their jobs. And pay vendor invoices on time. It comes back to you positively when you have a down-cycle and need their understanding. Think of George Bailey in “It’s a Wonderful Life.”
It’s not easy to get your own business off the ground, but in the current poor job market it’s the best alternative, and economists seem to agree that small businesses are the primary drivers for job creation. I think it would be cool to make that kind of contribution, but much more than that, I always keep the following in mind: The worst day I ever had in business ownership was a hell of a lot better than the best day I ever had working for someone else. Good luck!