Setting out by yourself to start a business can be an exciting and also scary time. Whatever your reason for needing to go solo and make it on your own, what follows is usually a messy experiment of failures and successes than eventually (hopefully) becomes a business you can be proud of, or the makings of an entrepreneur who’s not afraid to give anything a go.
It can be even scarier when most of what you do is online for everyone to see (or not, as is the case with my third business mistake below). The sheer volume of opportunities we have to access clients, suppliers, collaborators and solutions online is unprecedented, to the extent that even a stay at home mum can start a business in her pyjamas and eventually offer her husband a job.
It can be easy to think online business is easier, but it still needs you to focus on all the hallmarks required of any traditional business. Here’s where they fell down, so you can hopefully avoid the same pitfalls.
1. Not Keeping My Finances in Check
My ‘business’ started out fairly slowly with revenue trickling in from here and there. I did have the foresight to set up as a Sole Trader (a simple Australian business structure), but I didn’t set up a separate bank account because as a sole trader I would be taxed at the same rate as an individual. So all my revenue earned went into my personal account and was spent as personal income.
The big mistake was not considering the implication of no longer having income tax withheld from my earnings. When you’re employed, your employer does that for you and passes the tax onto the government. When you’re a sole trader, you need to do that yourself, preferably on a regular basis ie each quarter. I learned the hard way, getting landed with an $11,000 tax bill at the end of my first financial year.
To make things even more difficult, I wasn’t really keeping effective financial records, so submitting my tax return was painful and eventually resulted in many tears and a visit to an accountant. My accountant set me on the right track, helped me get set up with an accounting system, a business bank account, and the correct business structure. They also empowered me to learn how to manage and understand my own accounts and tax obligations. You may want to delegate these to a bookkeeper and/or your accountant, but I thoroughly recommend learning to understand how your finances work in your own business first.
2. Working with the Wrong People
I think this is a pretty common mistake. When we first start out we eagerly take business that comes our way, usually for the wrong reasons – they’re a friend, they were referred by a friend, we need the money, we tell ourselves we need the experience – even if they’re not quite the right fit.
I’ve taken on clients and then realised I should have done more homework. I would have recognised that I couldn’t actually help them. I’ve worked with clients who have said they want one thing and then after it was delivered, moved the goalposts – like to another playing field!
It’s the same with people who you contract or sub-contract to – your judgement can be easily clouded, but when it really matters, the mismatch in expectations or skill will become painfully clear.
The best ways to avoid these mistakes is to:
- have a very clear expectation of what you want in a client and/or contractor.
- do your homework and make sure they actually fit the brief. Ask for examples of work from a potential contractor, or at least do a trial run.
- ensure expectations are clearly understood – do they understand what you’ll be doing for them and what they’ll be doing for you?
- be super vigilant with the above if considering working with friends or family.
3. Lacking Self Confidence
Deciding to jump the fence from being an influencer to working with influencers was a big step for me. There was some definite imposter syndrome going on, and as such I ended up spending too much time worrying about branding and business cards (which is important to help you stand out) and not enough time creating content and promoting myself. I felt like I had to hide behind some pretty fancy business cards that cost me $900 (wow, that hurts to admit that!) and remembered crying when my toddler destroyed $30 worth of business cards in the blink of an eye!
I have always identified as the experimenter, not the expert. I’m a terrible self-promoter and I worry about what people would think if I ever wrote an opinion piece, hence why finding blog posts authored by yours truly is like searching for hens teeth. Not the best strategy if you want to be found online!
Last week Darren introduced you to Robert Gerrish of Flying Solo in a podcast interview about how to overcome the challenges of being a solo entrepreneur. I’ve been going through his Soloism course and came across this very frank observation:
Being a soloist demands that you are prepared to stand up, stand out and get noticed. It also demands that you stand for something, have opinions and can talk powerfully and passionately about what you do, who for, why and how. This is stepping into the expert’s space – standing under the spotlight.
Are you ready to stand under that spotlight? I wish I had realised that positioning yourself as an expert is not about he or she who shouts loudest. Any confidence (even the quiet kind) can help you create content and opportunities that will allow the right people to find you and work with you. It’s something I’m still learning to do so that I can continue to grow into the entrepreneur who’s not afraid to give anything a go.
In Conclusion: Soloism ‘Work Your Way’
Solosim would have helped me to avoid most of my business mistakes, except maybe the tax one – there’s no specific advice on that, and is best pursued with your relevant local authorities. When you go it alone you don’t have to be truly alone – there are great communities like ours and Flying Solo to draw from, and the Solosim ‘Work your way course’ can help you at whatever stage you’re in with your solo business.
With over 80 videos and supported by exercises, worksheets and online discussion, Work your way is the most comprehensive course of its kind anywhere. The modules help you to attract more dream clients. Fire clients. Find a mentor. Coach yourself. Work faster. Work slower. Work healthily. Charge more. Smile more. Expand. Contract. Enter new markets. Design your office. Design your week. Design your exit.
I’m looking forward to the next stage of my own entrepreneurial venture, as it is ever changing and exciting. I’ll see you on the other side of this module on ‘Rejuvenating and Refreshing’!
