The economy has been rough, and it's hard to know when things will turn around again. I'm not sure about you, but I find it difficult to think beyond keeping the job I have when things get tough. Staying put isn't always the healthiest choice. Sometimes that choice is taken away from us.
Whether you're frustrated with your existing job or scrambling to change your unemployment status, it's essential to consider all your options. In revenue operations, there are always a lot of choices!
We'll discuss the benefits of being your own boss, the drawbacks, and other alternatives to signing up for another corporate job.
Owning your own business comes with a lot of responsibilities and perks. You get to choose your hours, which clients you'll consider, and the scope of your services -- and you can fire clients if they misbehave. On the other hand, you need to be on top of business license applications, taxes (federal, state, and city), separate your bank accounts, and manage invoices. You're your own boss, collections agent, sales department, marketer, and subject matter expert.
If this sounds daunting, you're not wrong. However, meeting with other consultants and business owners can help you create a list of manageable tasks. It's no different than managing a CRM implementation or account-based everything project.
For example, (and this is by no means exhaustive), a checklist for starting a business may include:
Unlike joining an established business as a full-time employee, you'll be responsible for your medical insurance, choosing a business license type, and understanding the requirements accompanying each license type.
I mentioned the steps to spin up an LLC because an LLC does afford you some protection from litigation, but only if you file the necessary paperwork with the secretary of state (such as annual minutes) and establish a business banking account. It can be with the same bank you use today, and it's easy to link your personal and business accounts. What's critical is that expenses are paid for out of that business account, and invoice payments are also routed to that account.
You'll also want to establish rules for income and expense management.
As a single-person LLC, I divided my business's earnings as follows:
When you start a business, you may inject cash from your personal savings into your business account to invest in things like a work laptop, office setup, etc. This initial investment should be recorded in your "minutes." You'll also want to purchase software like QuickBooks, which simplifies managing and categorizing expenses and income.
As you contract with clients, you'll get familiar with non-disclosure agreements and general contractor terms. These will typically include signing over any ownership of intellectual property developed for the client. They'll also require a W-9, and whether they issue a 1099 (which is required when any business contracts with someone for more than $600 in a year) promptly or not, you'll be required to pay federal, state, and sometimes local (city or county) taxes.
As a business owner, your reputation makes or breaks future income. The better your network and current reputation, the easier it will be to get your business off the ground. You'll need to get comfortable with asking for testimonials and references. This also means you'll need to over-communicate throughout your contract and focus on customer service. As a marketer, I know word of mouth is the most valuable source of business leads – and any freelancer will tell you the same.
Did I mention that you can set your own hours?
It's true, but you'll need to be available when your clients are working. And depending on what kind of services you offer, you may be on call 24/7. For example, if the CRM is down and you're the only administrator, it'll be your job to resolve any issues quickly – whether you planned on weekends or not.
If you don't trust yourself to manage invoices in a timely manner (some businesses require that invoices be submitted within 5 business days of the first of the month) or be resourceful when it comes to insurance (both health and business), maybe business ownership isn't for you. If this sounds like a small price to pay to be your own boss, check out resources like the RevOps Co-Op community, The Small Business Administration, and your state or city business resource center.
I also recommend talking to any contact you have in the consulting space. The odds are also high that there are local business chapters and meetups in your town. In my experience, small business owners are happy to share their knowledge.
Agencies are as variable as any other type of business. There are different cultures, work styles, and benefits to working with any given agency. In general, agencies staff people hoping for more stability than if they were to start and run their own business. It doesn't always pan out this way, but it depends on the agency.
Some agencies hire full-time employees and staff their organization according to market demand. Others contract with consultants and will not pay a salary. The consultant makes as much as they attract and retain.
The biggest downside to working with an agency that isn't willing to put you on a salary is that you may lose your health insurance if you aren't booked for thirty hours or more a month. While their intentions may be good, they may not close the deals they were counting on or expecting that prompted them to hire an additional headcount.
It's also not uncommon for agencies to phase out unpopular consultants.
Some agencies will expect you to draw in new clients. They want you to reach out to your network and attempt to sell your services through the agency. In exchange for bringing in business, the agency will assume the risk of litigation, provide their full-time consultants with health insurance, and handle administrative tasks like billing and collections.
Part of the upside of working with an agency is that they already have a brand and reputation. They will have a website and market their services. If you hate selling yourself, it's a solid option. However, you must connect with your network and double-check that the agency's reputation is as good as they say. Some agencies are on G2, and a quick Google search can also unearth customer reviews. I recommend you also check out websites like Glassdoor.com.
I also recommend checking with the agency to determine whether they're opposed (or have contract terms they expect you to sign) to you doing some freelance work that isn't contracted through their agency. Sometimes they are okay with consultants running a side hustle when business is slow. Make sure to ask a lot of questions and read your contract carefully!
The following is primarily my experience with websites like Upwork and Fiverr, but I haven't met anyone (yet) who has contradicted this view.
Upwork and Fiverr are examples of job posting sites for companies or people looking to hire inexpensive talent. It works on a rating system and the number of reviews. Job posters aim to work with highly rated consultants who apply for their jobs. To accumulate a decent rating, you need to do a LOT of cheap work because if you're new, no one willing to pay decent money for a job wants someone inexperienced or poorly rated.
Your luck won't turn around after a couple of great reviews, either.
Think of it this way. If you shop on Amazon, which products are you most likely to buy? The highest rated with the most ratings, right? If many people have tried a product and the ratings are consistent, the product will probably do the job.
The same logic applies to freelance websites.
To accumulate enough ratings, you'll need to accept many jobs that are highly underpriced for the work you'll do. You're far better off contacting people in your network and finding contract work at a decent pay rate than taking any work you can get on a freelance job site.
You're also not saving any administrative work with a freelance website. You'll still need to set up your own business.
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Hopefully, this article hasn't scared you away from consulting work. Many of us absolutely love it. I've met many wonderful people and feel fulfilled when I help a small business owner do business faster and better than before. If you're motivated and willing to do the administrative work, it can be a fabulous alternative to working for a corporation.
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