"Welcome to Air Tran Flight 923", came a soothing voice from the cockpit; "This is Captain Saggy and First Officer Scooby". I looked around the plane. Only a few smiles. Not many people are awake on this late evening flight to get the joke. Me? I am too excited to sleep. Tomorrow starts my first day of self employment. I should say first day of "paid self-employment". I am on my way to Dallas to start a consulting engagement with my first client.
I pulled out my smart phone and started punching numbers into the in-built calculator....my income forecast. How much will I make if I stay on this project for three months...for six months...for one year? Holy cow! I will make more than double of my last annual salary as a full-time employee. Awesome!
Oh wait! I have to pay for the travel, and lodging, and food, and rental car, and health insurance. Punch, punch, punch....more numbers. Nah, need the big gun. Out comes my laptop.
Why does it take so long to boot? May be I should buy a Mac. I heard it takes only 32 seconds to boot. Those are freaking expensive though. But now that I am paid hourly, I can afford it if I put in a couple of extra hours every week for next few weeks. OK. Machine is up and ready. End of day-dreaming.
I opened a new Excel spreadsheet and started typing. First, how much I am going to earn. I am guessing it will be at least forty hours a week. How much do I need to spend every week? I started listing the expenses. They are mostly travel related.
It was quite a bit of money. Should I have opted for Time & Expenses model than an all-inclusive rate? Man, I should have calculated this before. Too late now.
Good thing that many of these expenses are tax deductible. I need to know which ones though; I don't want to get into trouble with IRS. Hey, talking about which, aren't there some additional taxes that I have to pay now that I am self-employed. Oh then there are those other expenses like the self employment insurance, that I have to incur irrespective of if I am on a project or not.
This contract is for three months. I am hoping it will get extended to six months or longer. But what if they don't like me or don't have enough work, and let me go after three months. How long will it take me to get the next one? May be I need to save enough to cover for those no-work periods?
You see, I am not one of those people who planned for self-employment. I got laid off from my last job and started looking around for another full-time. But, before I could find one, I got this contract position through a friend of mine. He had just started a full-time position with this company and realized that they need someone with my skillset to help them. (Note that, networking is the most effective way to find jobs, contracts and businesses. More on that later.) He called me and asked if I am interested. Of course I said yes.
Things went pretty fast. I got a call within a week from their procurement lady. She asked me what my all-inclusive rate is. That's the rate that includes travel and other expenses which I have to manage on my own. I had no idea what the right rate should be. I pulled a number based on my knowledge of what the market rate is. She asked me if I can start next week. I said I can make that happen.
Darn, I should have researched the market; I bet they were okay with paying a higher rate.
I have been self employed since then. I rolled off that project after a year; but never went back to become an employee. I stayed self-employed. And I absolutely love it.
I did many things wrong. And I learnt from them. It's amazing how hard it's to find a reliable source of information even in this age of data overload. Several times I had questions I wished I could ask someone. Someone who has been there done that.
This is my attempt to capture what I believe is the key to achieve self employment success. I will try to chronicle what I learnt in the process. My goal is to build this into a forum for aspiring solo-preneurs. A book all about self employment; from "whether it's right for you", all the way to "how to do it right". Just because you are Han Solo doesn't mean you have to fight alone. You now have the "Force" with you.
Let's start with the advantages (and disadvantages) of self employment.