EVALUATING WHERE YOU ARE NOW AND WHERE YOU’LL END UP
Where are you now? Well I suspect if you have bought this book you’re probably employed, working hours that do not suit and not earning enough. However, this maybe an over simplification of your situation and not all of it may be true. What you need to do is to evaluate exactly where you are now. If you know where you are now then you’ll have some idea of where you will be. Based on this evaluation you can truly decide whether you like where you’re at and where you’re going.
Now I’m not going to ask you whether you good at working with people, innovative, confident, self-motivated or anything else as cheesy as that. These questions are impossible to answer as they are your own opinions about yourself and they’re bound to be biased. But even more important is that the answers are IRRELEVANT! If you do decide to go in to business then these skills will come out without a doubt – you have no choice! When I started in business I was concerned that I was timid in negotiations. 4 years on I’m far from it. If I now felt that I was being pushed in to a deal that was no good I would clearly say so. I’m not going to sign a deal that threatens my business thus threaten my lifestyle no matter how many people I would upset.
So how do we evaluate where we are now? Quite simply we look at the pros and cons of being employed. Let’s start with the good news (if we can call it that!) – the pros of being employed.
The Pros Of Being Employed
|Pro||Why||Food For Thought|
|Regular Fixed Income||You receive a fixed salary at the end of the week or month regardless of your input level. There is little or no risk. The only real risk is being made redundant or getting fired. With this regular income you can take on fixed costs of living which then determine your lifestyle. Things such as houses, cars, clothes, going out and hobbies determine your lifestyle.||When you got your first pay cheque you probably had some idea what you were going to do with it. I imagine it was something similar to what other people do and have done with their pay cheques – spend it! It was your first chance to prove to the world that you were a normal working individual. You had a job and you could afford to do things like what other people did that had jobs. This lifestyle soon takes over and becomes the reason why you work. It is then impossible to leave work as you become a slave to this lifestyle.Is this regular income enough? Okay its relatively risk free, but is it what your worth? Can this income ever rise to be what your worth? Can you do all the things you want to with your current or projected salary?How long will this regular income last? Maybe your firm is in financial trouble and is looking to make redundancies?|
|Separation||Work life and out-of-work life, in theory, can be separate. When the working day ends your work commitments end and you can focus on your out-of-work life. You need not to worry if some trouble hits your employer as there will always be someone else to deal with it.||Should there be a distinction between the two lives? Wouldn’t it be more sane to have one life rather than two? There is then no need for two personas. You can then be assured of who you are all of the time.Does it serve you any purpose of separating these two lives and having one superior to the other? Just because it turns 5pm should you end your working day?Separation, invariably, is not the case. If you have an over-bearing boss, a heavy workload or job insecurity then work life does seem to taint your out-of-work life and an overlap occurs. Would it not be more beneficial for your working life and your social life to be blurred? That is to say that working is socialising and socialising is working?|
|Enjoyment||Working for your current employer puts you in situations that you enjoy that you wouldn’t get to do otherwise such as working with children, animals etc.||You may enjoy your job but your ability to choose your hours are limited and the salary might not be enough.If you do enjoy your job then this can be a great starting point for ideas for your new business. You may find that even though you forego certain situations, other equally enjoyable situations present themselves due to you entering an industry that you enjoy.Why not set up as a competitor to your employer! I know of several people who have done just that. They enjoyed the job that they did, left their employer and set up as a direct competitor – and won!|
|Status||With your job comes a certain status in society which helps contribute to your self-esteem such as a lawyer, doctor etc.||You may enjoy the status the job brings but your ability to choose your hours are limited and the salary might not be enough.Personally I think status is all about self-importance. People work so hard to acquire status so as a result they rely on it to make themselves feel better about themselves and compared to others. Once you forget about what others think of you and you focus on yourself and what’s right for you then the importance of status diminishes to nothing.|
|Social||Your job exposes you to a wide variety of people or certain types of people who you enjoy to meet and form part of your social circle.||Nothing stops you meeting these people out of work. You can always maintain your existing network of friends and build new networks through your existing friends. If you are a sociable person anyway then meeting new people shouldn’t be a problem. However, you may find that through self-employment you tend towards different people compared to when you was employed. Your attitudes will change and your existing network of friends might not change with you.|
|Education||You may benefit from training and education that is very valuable. Some employers spend a lot of money training up individuals so that they are more informed and hence better at their job. These skills are transferable and really help to boost your CV.||Some of the best training you’ll ever receive is through experience. Experience is unconscious learning and is easier to digest. Through self employment you will find yourself in situations that no text book will have the answers. These experiences will be more valuable than any training programme!|
Now look at these pros. How many are applicable to you? Are these pros sufficient to keep you in employment? Before you answer the last question compare your pros with the cons of being employed. See below.
The Cons Of Being Employed
|Con||Why||Food For Thought|
|Your time is not yours||You have to be in work at the hours dictated to you by your employer. If you are fortunate to be able to work flexi-time you still have to work a certain number of hours every week.You are expected to get to your place of work at a certain time regardless of whatever you did last night or want to do in the day. You are expected to stay at this place of work for a set number of hours regardless. If you need to be home for whatever reason its not your employer’s problem – and nor should it be! Your employer pays you a wage so that you are there to take their orders during their specified work hours.||This is the single and most important reason why I left work and is essentially the title of this book. Its not about the money, as money can only be spent, its about time, which spent wisely can be precious.If you work a 40 hour week, take an hour to get ready for work and commute for one hour each way then work takes up 60 hours per week. This equates to over half your waking hours for one week! And usually at the end of the day you’re too knackered to do anything else! If you do overtime then this statistic gets even worse.Were you put on this planet to live two days a week – Saturday & Sunday? Or would you like to work when you want? Would you like to dictate your own hours rather than someone else do it for you? Would you like to do things while other people are at work?I never go shopping on a Saturday. I go in the week when the queues are small or non-existent, you can find a parking space and you can get there without getting stuck in a traffic jam.|
|Minimum retirement age is 60||In order to draw your pension you have to be aged 60 or over. So if you have no outside source of income other than your salary then your pension is all you’ve got to look forward to.If you have financial commitments (which is likely) then you will either need a salary or a pension, hence you cannot afford to truly retire till age 60 or over.||What a thought! I do not even know whether I will reach the age of 60 and nor do you (unless you’re over 60 now!). You may die never knowing what its truly like to not have to work to live.Do you want to work till at least age 60? Do you have ideas or things you want to achieve before you’re too old? Is the concept of working for the next 30 years too overwhelming? It’s a big world out there and knowing you spent half your life in an office building, shop or factory may leave you feeling a little bit hollow.You may even have to work beyond 60 if your pension fund is not big enough to provide for you. Age 60 is only a minimum!|
|Retirement income is unknown||Unless you have a very expensive defined benefit pension policy because you are a company director (which is being phased out now) you will have no idea what you pension will be. It will fall within a wide range but your pension depends on the performance of the stock market and the annuity rates being offered at the time. Neither of these will be known at the time of retirement.||How can you plan for retirement if you do not know how much you will have to spend? It can be very unnerving not knowing whether you will simply have enough especially when Pension Companies have performed so badly.Owning a business opens up other opportunities to providing you with a defined retirement income such as non-executive directorships, consultancy, licences & royalties, part sale deals, complete liquidation and much more. If you do go into business you will find out all about these opportunities in good time!|
|Effort does not always equal reward||Your salary is largely fixed. You may receive bonuses but the bonus will be a fraction of your salary and may be dependent on the performance of others which you have no control over.So it does not matter how much effort you put in, your reward, being salary, will never mirror your effort. Your reward will fit within a predefined scale set with maximums and minimums and will also rely on the performance of your peers.Recognition of work is also difficult. If you have an all-the-glory boss who loves to take all the credit of the team or you are only one out of many in a team that has done well, then direct assignment of credit can be blurred.More often than not it’s the more popular members as opposed to the harder working members of the team that get the credit – how unfair!||Wouldn’t it be nice to know exactly all of your effort directly benefits you? Personally I think this is how people operate when it comes to work. He will work hardest when he know he will get all the benefits from his effort.Employees will largely fall in to one of two categories:1. Driven – employees working beyond their strict duties because of the promise of promotion or more pay.|
2. Work Shy – employees that will do the least to keep their job as they are de-motivated. De-motivated due to lack of interest for the job or promotional prospects, wanting to do other things (like me!) or simply lazy to move job.
Employees start off as driven, turn to work shy and then move job. They then repeat this process for the duration of their working life never finding their true vocation. Do you find yourself changing jobs every 2, 3 or 5 years? Do you find yourself jumping into a job that you think will be interesting and finding out that the same old original feelings surface?
|You will never be rich!||If you looked at this years Sunday Times Rich List 1,000 you will not find one single employee as an entry. Okay, they might be the CEO or chairman of a company which is technically an employee, but their wealth is derived from the ownership of the company rather than from their salary. The rich own businesses and the poor work for businesses – its as simple as that.But I’m not only talking money here. You will never be rich with time, which for me, was my main motivation for becoming self-employed. The abundance of money has diminishing returns. Once you’ve bought your first Bentley the second and third have less importance. But time spent with your children or nieces/nephews are priceless.||There is no limit to what you can earn from being self-employed. However, there is a limit to what you can earn being employed. It’s quite disheartening to know that the only way you can be rich is by winning the lottery.Even if you do earn or have the capacity to earn large sums of money it will only last as long as you work there. You may only experience a high salary for a few years before you have to retire or the market changes. If you do well in business and set things up properly then the large sums can continue indefinitely – whether you do the work or not!|
|You cannot choose who you work with||I think we’ve all come across this one! You may have a boss or colleague who is brilliant at what they do but you simply don’t get on with them. It could be a personality clash, a cultural difference or opposite working styles. Whatever it is - you cant stand them! The problem is there is nothing you can do about it.This reason alone can cause a lot of stress. Having an overbearing boss who is always in your face, giving you impossible deadlines to meet and never appreciating your work can make you feel quite low.||Do you have feelings of hatred to any of your colleagues? Having these intense feelings will only take from you. Wouldn’t it be better to surround yourself with people you like being around ALL of the time?You can choose who you work with or do business with if you are self-employed. There is no need for you to ‘put on a face’ for someone you don’t like as you have no need to speak to that person. You will find that you will become a ‘straight talker’ as a result because there will be no need to do otherwise.When I started in business I had a few contacts that were a bit rude and condescending to me. It was probably because I was younger than them and they thought they knew better. I simply refused to do business with them. Because money was not the motivation, but freedom was, I was confident enough to say to myself that there is no need for these people to be in my life.|
|You will always be under someone else’s control||Unless you’re the CEO or chairman then there is always someone above you. So if they decide that they want you to work out of your area then that is their choice not yours. If they want you to change department then that is their choice also – and so it should be as they pay your wages!You may think you have control as your position as manager but the reality is something else. Your promotion, pay, benefits and authority levels are all set from above which you have no say so.||If you are happy to take orders from someone else then you are merely a slave, happy to accept orders in exchange for a pittance.I found the whole concept of work like being back at school. It seems very patronising for someone else to tell you when you should be working and checking that you stick to their regime.|
|You will always have job insecurity||There is no such thing as a job for life. We live in a cut throat business environment where employers will make redundancies if it makes economic sense.Ironically, having a job is more risky than having a business as the employees are the first to go. If a business is facing financial trouble or its more effective to out-source then they will get rid of you. If you own a business then no one can get rid of you because its yours! Now I’m not saying that you won’t get in to financial trouble but if you do then the first to go will be your employees and not you.||You will have a better idea of your security if you know everything about the business. The only way for you to know everything about the business is to make sure you own the business!If you remain focused in business then you can ensure that you will always be self-employed. Step 7 deals with not only how to build your position but also how to maintain your position so that you never go back to employment.|
So you know the pros, you know the cons – is it worth staying employed? I’ll make a guess of where you’ll be in the future if you carry on this path of employment:
|Comfortable||Comfortable – what an awful place to be! You will be seeing others achieve more, you will want more but you are too scared to lose your comfortableness so you stay there - never knowing what its really like to be motivated by your own personal goals but motivated only by fear.||Resentful, Unhappy,|
|Under-paid||You will always think you are worth more. This feeling will never go away. Because you are paid for the hours you do rather than the deals you make, no amount of money can compensate for having to turn up for work when your employer says so.|
|Under-rewarded||The reward of money is usually not enough to make you feel good for the hours you put in. Recognition for your work all of the time is also very important because its your work. Recognition for all of your work will mostly be lost in the system.|
|Over-worked||As you get older your time becomes more precious. Responsibilities grow the longer you stay in a job thus your employer will expect you to work even harder.|
|Insecure of your job||You will never be secure of your job as secure jobs do not exist. So this feeling will always remain.|
|Missing out||Because of the time demands that your job brings you will always miss out on certain things. As you have been working for a while you have just got used to missing out.|
|Powerless||You will always feel that you are unheard and that your opinion doesn’t carry much weight. You’re fed up with making recommendations and it falling on deaf ears.|
Now you may think this is a bit extreme. You may only identify with some of what I’ve said above and that’s okay. What I hope this chapter has done so far is to force you to think about where you really are now. I don’t know where you are now because I don’t know you! Are you heading in the direction you want to go or are you a little bit lost and wondering why you were put here on earth?
Take time out to really think if what you are doing is meeting all your needs now and will continue to do so in the future. If it does then stay where you are. If it doesn’t then change! To help you change I’ll tell you the pros and cons of being self-employed. I hope this list will wet your appetite and create the desire to change.
The Pros & Cons Of Being Self-Employed
In part, the pros and cons of self-employment are a reversal of the pros and cons of employment. But there are others. Lets look at the reversal in summary and then look at the others.
|Pro||Why It’s a Pro|
|Your time is yours||No one is there to tell you when to work apart from you. If you want to work late or get to work early then that is your choice. If you want to work from 9pm – 5am rather than 9am – 5pm then do so! If you don’t want to work that day then don’t!|
|No minimum retirement age||If you do well in business then you can sell up or step down and let your business pay for your retirement. There is no law stopping you spending your profits for doing nothing – even if you are only 21!|
|Retirement income can be predicted||Again, if you have done well, you would have explored all the options available to you to ensure a guaranteed income from your business to keep you in retirement.|
|Effort does always equal reward||If you do nothing you’ll receive nothing. If you do something you’ll receive something. But whatever you do you can be assured that you will receive 100% of the benefits flowing from your effort.|
|You can be rich!||There is no law to say that you cannot earn £1 trillion a year. There are no limits. The only thing that limits you - is YOU!|
|You can choose who you work with||If its your business then you decide who you deal with and who you employ. You have 100% control over who enters your life.|
|You will never be under someone else’s control||Of course not – its your business. Where you decide to surround yourself in whatever markets will be solely your choice. It’s a highly responsible position to be in as this determines the success of the business.|
|You will always have job security||Step 7 ‘Build & Maintain Position’ deals with this in more detail.|
|Con||Why Its NOT a Con|
|Irregular Income||Its true that your income will be irregular. Hopefully you will adopt step 3 and prepare for this. This will mean that you will minimise your fixed costs of living so that you can weather the bad times. Once you are through these times then having an irregular income of £10k one month to £30k the next won’t be such a problem!|
|No Separation||Who needs separation? Why not have a life that is not split between work life and social life? If you’re interested in something – turn it in to a business!|
|No Enjoyment||If you will miss the enjoyment you got from your job then look to do a business that is similar or that is in the supply chain of this environment. If you can’t manage that then look for something that you think you will enjoy. To ensure success you must have an interest in the product/service you are selling – I don’t have to tell you this!|
|Loss Of Status||Status means absolutely nothing! Okay it may get you a table in a restaurant but is it really worth working 40+ hours a week for this privilege?|
|Lack Of Social Contact||If your time is yours then its up to you to maintain social contact. At least you can socialise with the people you want to socialise with.|
|No Formal Education||The best education is experience. I have had the best training in life from college, university and my accountancy firm but it doesn’t compare to the real life experiences I have had in setting up my business.|
So these are the reversals but here are the others which I have found through experience. It is not a complete list as I have only been self-employed for 4 years. I am sure there are more.
|Con||Why||Food For Thought|
|Administration||People think there is so much red tape in running a business – and they’re right! But the admin grows with the business. The more trade you do the more paperwork. However, it’s a small price to pay for the increased business.||If your business does well then you can hire someone to do the admin. Okay you do have to everything when you start a business but if your business grows then you can pay someone to do all the things you don’t want to!|
|Tax||People become so focused on how to avoid tax rather than focusing on how to make a profit. Remember that only profits are taxed, so firstly make a profit then worry about tax.||Self-employed people are subject to the same income tax rules as employed. Okay its done for you by your employer if you are employed but the amount you pay is the same for employed as well as self-employed.|
|Responsibility||Yes you do have to be responsible – but do you have a problem with this? Being responsible is part of being an adult so get used to it and grow up!||Its easy to delegate responsibility when your employed – ‘it’s the employers problem’. However, there is a lot of personal reward to be had knowing that the buck stops with you. When things go right then you know you deserve full credit. When things go wrong you learn very important lessons that no course or training program could ever teach you.|
|Jealousy||If you do start your own business and have a degree of success then you will get jealousy from some – its only natural. You simply have to be thick skinned. Being self-employed teaches you a lot about how to ignore negativity and just get on with things.||Don’t repeat the mantra – ‘well if they’re jealous then they weren’t friends in the first place’. Becoming self-employed is not just hard for you but for others around you also.|
|Apathy||Its completely normal that when you become your own boss that you have bouts of apathy. I went through it. But if you are determined to make your business work then you will ensure that they are only bouts and not for long periods of time.||It is your right to do nothing if you do not want to. But if you have set goals within you business plan then you will not allow yourself to do this. Apathy comes from when you don’t have to do things – and this is one of the perks of being self-employed!|
|Pro||Why||Food For Thought|
|Prefer to invest rather than spend||When you enter in to the business world you understand that every £1 you have could either:1. Buy you something you want now, or2. Buy you something you want that’s even better at a later date if you invest itKnowing this means that you intrinsically spend more carefully, investing the rest, so that you can acquire things that you never thought possible.||Do the things you actually buy make you feel better about yourself? Would it not be better knowing that your time is more important than any material good? Is it not better to invest in businesses knowing that you will have more time for yourself, your family and friends?|
Now I know I have made a serious attack on being employed. You may think it is harsh. If I had been reading this while I was employed I would of immediately defended myself and said ‘I enjoy my job, I get to meet people, I get well paid, I have status…..’ because this is normal. But see what I’m saying as an attack. Really think through what the hell you are doing and where you’re going to end up! What your employer is offering you does not compensate for what you forego. It is only this working culture in this country that keeps you in employment because you know of nothing else.
Okay, so now I have really rubbished what you and others are currently doing but it gets even worse. Step 2 is ‘Live Like A Pauper’. For you to succeed you have to prepare yourself for self-employment and this means going without. Not for a long time but for a time for you to get established in business. So lets get prepared………