How to transition to a SOHO business. day job feature hed: dek: by Si Dunn and Connie Dunn
Admit it. You’ve been tempted. Sorely tempted to open those spam e-mails that shout: “Start Your Own Internet Business in 30 Seconds!”
Tempted, too, while stuck in traffic, to jot down phone numbers from those road signs that proclaim: “Earn $5,000 to $8,000 a Week at Home with Your Computer!”
Many of us would quit our day jobs in a heartbeat if we believed we could make a go of self-employment. Repeated downsizings have left us shouldering the work from several flushed-out offices. And now, more than ever, we are acutely aware that, to the corporate bean counters, we are just some of the beans: units of labor, little speed bumps that add drag to their efforts to “streamline” the company and “maximize shareholder value.”
In the midst of another unnerving, unsatisfying workday, it is easy to fantasize:
You are in a meeting that is droning on and on. Suddenly, you stand up, fling the charts and graphs aside, and head out the door, quick-marching to the beat of your own drummer. As you go, panicked managers chase after you, shouting: “Come back! You haven’t finished your toner-consumption report!” You go for a coffee break-and just keep going out the back door. Later, you leave your boss a voicemail of resignation. Or you quit via a fax-or a singing telegram. You go to lunch-and go home, instead. You empty out your apartment and speed out of town to points unknown, laughing as you imagine your boss standing at your cubicle with a new assignment. He’s watching the clock and impatiently tapping his foot, then waiting, waiting, waiting to chew you out. By the time he’s ready to explode with anger, you are crossing the state line.
Sanity in soho-land?
As much as you might wish to bag Corporate America immediately, there is a smarter–and saner–way to go from working for others to living off your wits and being your own boss. You can make a gradual but deliberate transition to the small-office/home office (SOHO) world. In short, keep your day job and its benefits for now. But start planning, equipping and building up a business on the side. This will mean devoting nights and weekends to trying out your dream. With luck and hard work, however, you soon may be able to escape from Cubicle City–and stay gone.
The key word here is may. Not everyone is cut out for self-employment. You may not have the business skills, temperament, and drive to succeed. Deep down, you may be unwilling to trade the security of biweekly paychecks and 40-hour work schedules for a do-it-yourself enterprise that requires almost full attention seven days–and nights–per week. In SOHO business, there are no guarantees you will get paid. Indeed, the firm in your fantasies may never turn a profit in real life.
But the only way to know for sure is to take the risk and try it.
John Terry, now a self-employed business analyst and business planner in Plano, Texas, realized while working for corporations that he was an entrepreneur at heart. “I had a successful career in sales. I made money. But I wasn’t having any fun,” he says. Terry eventually found himself writing business plans for others in his spare time. Two years into that home-based sideline, his frustration with corporations finally boiled over. He quit and took on his business full time.
Terry, a principal in Churchill, Terry and Associates, now has about a half-dozen people working for him out of their own home offices. Most are what he calls “MBA moms”–former executives with master’s of business administration degrees “who now are moms and stay at home with their children.” Says Terry: “People ask me: ‘How do you start a business?’ My best answer is to do the best preparation you can, then just jump. I wish I had done it sooner.”
What to do?
To go into small business, you first need to find a business to go into–easier said than done. Do you become a consultant, buy a franchise, take over an existing business, start a service firm, or create a manufacturing operation?
“One of the most common questions I get from people about to go into business is: ‘What should I do?’ ” says SOHO business specialist and author Terri Lonier, who heads San Francisco-based Working Solo.
“Others want to know if the business they’ve picked is the right one or the sure bet.” And some, she adds, figure they can get rich quick, because they have heard that consultants can make $50 an hour or more. They overlook a basic reality of self-employment. Rates such as $50 an hour happen only if you make them happen. And some weeks, you may not make a dime.
“Going into business starts with an understanding of yourself,” Lonier explains. “You need an understanding of your strengths and where you will need other people to fill the gaps. To be a successful entrepreneur, you want to be self-directed and self-motivated. You need to be outgoing and a networker. You should have a sense of curiosity and be a lifelong learner. You also need to be an optimist, but not a Pollyanna.”
You need a few other qualities, as well, adds Pam Livingston, a business development specialist in the Small Business Development Center (SBDC) at North Central Texas College in Denton, Texas. “Owners of SOHO businesses must be driven by self-discipline. There is no time clock to punch, yet it is still critical to get to work regularly, even if that simply means walking down a hall in your home. And there also can be an absence of the social interaction that is a significant benefit in working with others. If you’re not a loner, or if you’re unable to work effectively without some social stimuli, beware.”
Furthermore, be open to asking for advice from others and seeking opinions and resources, from SBDCs, from organizations such as the Service Corps of Retired Executives (SCORE), and even from the Internal Revenue Service.
SBDC counselor Rebecca How concurs with her colleague. “I like to tell my clients that they are in partnership with their banker, attorney, insurance agent, and CPA. You may know your business, but you won’t know everything in these other fields,” How says.
No matter how badly you itch to jump into business right this minute, “a lot of research, planning, and cash-saving is required for a successful transition” to being your own boss. “A one-year cash flow projection and the ability to keep your head above water for that long will set a SOHO owner on the right track toward a successful business,” Livingston says.
So will honestly assessing your skills as an entrepreneur, adds Jerry White, who directs the Caruth Institute, an entrepreneurial center in Southern Methodist University’s Cox School of Business in Dallas. “I often hear people asking the question, ‘Am I an entrepreneur?’ Entrepreneurs usually have a fundamental need to control and direct their destiny. And they are opportunity driven. They can identify an opportunity and often see it where others don’t. In matters where it’s not clear to others how to solve a problem, they see solutions. They can see patterns where others see chaos. Entrepreneurs usually are passionate about what they are doing, and can sway lenders and others into getting involved with what they are trying to do.”
Against (nearly) all odds
The casualty rate for business startups is appalling. Depending on the study and its business focus, 50 to 80 percent fail within their first five years.
Home businesses often fare a little better, since it is cheaper to work from a kitchen table than a leased office. However, only a small range of enterprises can be operated successfully from a house or apartment. Otherwise, you run afoul of neighbors, zoning restrictions, and potential clients and customers who don’t like discussing contracts in a toy-strewn living room while a Chihuahua gnaws at their shoes.
Inadequate money, management skills, and expertise are three big killers of SOHO startups, How notes. But another fatal bullet is an inability to mesh business demands and family needs, she adds. Be sure your family fully supports the decision to quit Corporate America and become self-employed. Your fondest dream may be your spouse’s and children’s worst nightmare.
Spouses in particular “need to have a healthy relationship before going into business,” adds Paul Karosky, executive director of Northern University’s Center for Family Business in Dedham, Mass. “And there needs to be time for turning the business off. No pillow talk about business. It can’t be a substitute for a good spousal relationship.”
Yet, dire possibilities aside, “business is not so hard in other ways,” offers Steve Weissman, president of Kinetic Information, a Waltham, Mass.-based “business intelligence agency” that serves technology industries. “You have to tell people that you have a business. It’s constant work. You can put your best marketing work in place in January, but if you don’t do it again by June, it’s as if you haven’t done anything at all. To be successful, you also need to be a master of details and have thick enough skin to handle rejects.”
Most importantly, Weissman adds: “Listen. Listen to both current and prospective clients. They will tell you what they need and want.” Then deliver it and offer something more and different than your competitors. “Ultimately,” Weissman emphasizes, “customer service cannot be underestimated. If you go to bat for your customers and give them what they need or more, then that makes a difference in repeat business.”
Indeed, you may get clients or customers as soon as you open shop. But if you don’t have the drive and verve to deliver on time and keep hustling for new sales, you won’t be open long. Being in business means being in repeat business.
So what’s the bottom line? If you can avoid the layoffs, keep your day job for now. But carefully plan and work toward your escape to the fast-growing world of SOHO business. Start building the skills, knowledge, and contacts you will need. Get your personal finances in better order. Stash some cash. Line up some insurance options for health, life, disability, and business liability. Then run your business as a sideline for a while. Make sure you will still love it after the novelty wears off.
One blue Monday soon, you’ll ponder the rush hour ahead, then linger over your coffee, dawdle over the morning newspaper, and finally make up your mind. From your home office–your new world headquarters–you will send that “I quit!” fax and finally step into your dream with both feet.
Top five reasons to flee your day job
5. You get claustrophobic in cubicles, particularly cubicles shared with co-workers who babble incessantly into telephones or hum tuneless melodies while they type.
4. You also get claustrophobic in meetings, especially any meeting that kicks off with a 300-slide PowerPoint presentation, and the other attendees begin arguing over the finer points of the first slide.
3. You have acquired a dog, and now believe its care is much more important than any work task you recently have been assigned. You know Fido always will give you great performance reviews-unless you forget to feed him.
2. You have tested a pet theory at home and determined that it really works. You indeed do your best computing while listening to polka CDs in your underwear. You don’t quite have the nerve to try this at the office.
1. You can’t seem to let go of old computers. Now you have six, of various vintages, cluttering up your home office. Since you can’t type on all of them at once, starting a SOHO business and hiring five other employees seems like a logical solution.
Blast off!-Your employer is too cheap to buy you a new PC or printer. So you have to take office work home to your own equipment just to get it done. Might as well stay there.