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I am sure there are many consultants out there who have been working from home for a few months, or they have been ‘Covid-ized’ and are looking for work; and are now seriously considering starting their own company and working for themselves. In fact, I have had several colleagues and mentees recently ask for advice on starting their own firm. Having set up and run several businesses, and helping out with other start-up ventures, I thought it would be a good time to pass on a few things I have learned along the way. These suggestions are directed primarily at environmental consultants but many of them could be applied to any business.
Do your research!
If starting a business was easy everyone would do it – after all who doesn’t want to be their own boss, set your own hours and have lots of time for golf or vacations. Sadly, that’s not the reality, and it takes hard work, drive, and determination to be successful. Part of that is doing some significant research before you launch. You will need to ask and answer a lot of questions. What type of business structure will you have? Will you incorporate, or run as a sole proprietor, or partnership? There are liability and tax advantages and disadvantages to each set up. What is your core market/service; and where will your business come from? How will you market and promote your services in a competitive market? Will you have partners, employees or utilize sub- contractors? How much revenue do you expect, what are your overhead costs, and what is the bare minimum you need to survive and keep the lights on? Will you WFH or rent an office? You need to have a firm grasp on all your actual costs, realistic revenue, and overhead before you start picking out company names and office furniture – you will need those soon enough, but you need to understand the basic math first. If you have never run your own business, you will likely be unpleasantly surprised at the costs involved.
Be Prepared
Working for yourself can be challenging, enjoyable and frustrating – often all at the same time. You will have to ask yourself, and answer, some tough questions. Do you have the motivation, patience, organizational prowess and self-discipline to build and maintain a business from scratch? Do you have the necessary expertise and experience to obtain the work and complete the tasks on time and within budget? Running the entire show can be very rewarding, but it’s imperative to realize that if you go over-budget, have delays in receivables, or worse get stiffed for payment by a client – it comes directly out of your pocket. And if you don’t get paid, you still have taxes, insurance, subcontractors and overhead to pay out. If you have a family, you will need their full support, especially if things get tough financially – if your spouse or partner works and has benefits that can really help bridge the gap the first few years. Can you get by, or have insurance to cover time off due to illness or injury? Remember, that regular pay cheque, paid vacation, health benefits and other perks you likely had working for someone will be gone – can you adjust? We like to think we will achieve that elusive work-life balance, and you may (at least some of the time); but in reality there will likely be more late nights, early morning and weekends you have to put in to get things done – at least for the first 30 or so years. Most self-employed business owners I know put in a lot more time than their employed counterparts – and the ones that make it love it.
Next month I will discuss a few more considerations for starting, building and maintaining your own business
Bill Leedham, P. Geo., CESA
Bill is the Head Instructor and Course Developer for the Associated Environmental Site Assessors of Canada (www.aesac.ca); and the founder and President of Down 2 Earth Environmental Services Inc. You can contact Bill at info@down2earthenvironmental.ca