All of the worst jobs I’ve ever had in my career were the ones where I worked for somebody else. The only times I’ve ever felt truly happy in my career are the times where I was working for myself.
About two years ago I made a pretty fundamental shift in what it meant to work for myself. I decided to start a company of one.
Today, I want to revisit with you why I decided to go the solopreneur route, why I intend to stick with it, and why you may want to consider it.
We go to work to make money. Ideally, we enjoy that work and find it meaningful, though this seems to be the exception, not the rule.
Whether we make a living working a job, starting a company, or working for ourselves in a company of one, we’re all trying to make a good living. We want to make enough money to cover our costs of living, save for college or retirement, and have some left over for leisure. I would argue that among the options, self-employment provides the simplest path to making the best living.
Not necessarily the easiest, but certainly the most simple.
If you have a job, your labor is an expense to the company.
Therefore, it is in the company’s best interest to keep salaries and payroll low while trying to get as much revenue generating productivity out of each laborer. Even in a well-paying job, a good portion of the revenue that your labor produces is taken by the company to cover fixed costs, to pay the higher salaries at the top of the organization, or dividends and profit-sharing for shareholders and investors.
In order to increase your salary, you are relying on someone else giving you a raise or venturing out to find a new position with the requisite salary. The new job will come with pre-set expectations and possibly a team that you did not choose.
In a job, it’s mostly out of your hands, and an uphill climb. This is roughly what it’s like when you work for someone else.
When you start and run a company, unless you are a co-op, you must continually generate significantly more revenue per employee than they are paid, in order to cover costs and generate profit. Every dollar you bring in must first go toward covering the cost of overhead and labor. As a company, your labor costs are more than just salary and also include things like healthcare benefits and 401K matching. As you scale, your total labor costs will increase as do your requirements for capital in the bank to cover you in case the business takes a downturn. If you don’t have enough in the bank, when you lose a client or have a weak quarter for product sales, you may need to layoff one or more members of your team.
As your labor force grows, your business becomes more complex. Now, you need a human resources department, an IT department, and you’re offering new benefits to keep team members and lure top talent from competitors. You may need office space to legitimize your business in the market, or maintain a place to bring the team together. Once you do that, you’re buying coffee and snacks, office equipment, and that ping-pong table your company culture so desperately needs. After all of that, if there’s anything left, you get to take money out of the company for yourself.
So, if you’re looking at starting a company, you need to know that your entire company must first reach a point of sustainability and then profitability, before you are able to start taking a salary. Ask any owner and 99% will tell you that they get paid last. Even though you’re working for yourself, a lot of people get paid before you do. So, who are you really working for?
As the owner of a company of one, much like the owner of a company of many, you still get paid last, but because there’s no one else it means you also get paid first.
This is a simple structure where you keep everything you earn minus the cost of your equipment. With only a few clients, you can have a steady stream of income with limited fixed costs. If you lose a client, you don’t need to fire anyone, you just need to find a replacement client before your savings run out. Because you keep so much more of what you earn, you should have an easier time retaining some savings than you would running a company with employees.
What’s even more exciting is that you have more freedom to do work that you enjoy, with pricing that you set, and on a schedule that suits your life. This path gives you many of the upsides of having a job and starting a company, while mitigating many of the downsides of either.
While a solopreneur is unlikely to scale into billions or even the tens of millions, it is an excellent model for making a very good living with plenty of flexibility. In my experience, this is what it really feels like to work for yourself.
Why I do it
- I’m a strategist, speaker, consultant, coach, podcaster, blogger, and author.
- I have multiple streams of revenue.
- I help my clients with brand, leadership and culture, marketing, sales, and productivity.
- I set my own schedule. I work four days per week, with clients getting three of those days.
- I make an excellent living.
There is not a job on the planet that would allow me to do all of these things in this particular way.
If I started a company, it would probably be 3-10 years before I had the flexibility to work on everything that interests me, and for most of that time, I’d probably make 50% of what I’m making now.
So, looking at how things are going, I plan to stick with this model. I’m not saying that you should, but hopefully I gave you something to think about. For now, I’ll just leave you with this question to ponder…
Who do you want to work for?
Because if you’re working a job, you work for someone else, not yourself. Your labor benefits someone else. Could you do what you’re doing now, but as a free agent, with more time and flexibility? What would it take to do it?
And if you’re running a company, you work for yourself but your labor is bogged down in trying to keep up with all of your costs and all of the mouths you have to feed. Could you scale back and do what you do well without that whole team? How many clients would it take and at what rate to make what you’re making now?
When I did these calculations two years ago, the answer was simple: launch my company of one.
That’s why I did it and in retrospect, it was the best decision I’ve made in my career.
NOTE: I also want to share that I’ve recently cracked part of the code for how solopreneurs and freelancers can scale their business development efforts and more easily get to the point where there is a steady stream of revenue coming in.
For now, I’m calling it Project Net/WORK, and I’ll be sharing it in a future post.