Being your own boss and running your very own small business can seem like the ultimate dream. But have you ever asked yourself "Do you have a business OR are you actually just self employed?" Maybe a better question is, “do you want to have a business or would you rather be self employed?
This conversation comes up for us a lot . What is the right answer?
Many people who thought that they had a business, actually realised that they were self employed.
Most small businesses in Australia are really people who are self-employed. And this is ok.
The only issue we have is when people think they have a business to sell and they don’t – this can be a huge disappointment. I personally have lost more than a couple of coaching clients because they bought me in to ‘just tidy up’ their business for sale and I turned around and told them that they had nothing to sell – unless they were staying with it in the sale.
If you are self employed (not a business owner) then, like an employee, you need to plan for your retirement, save and invest – because when you stop the exertion your income will stop. It is unlikely that you will have anything to sell and if you do it won’t be for the huge sum that you had hoped to fund your glorious retirement.
On the other side you can move from being self-employed to building a business. If you have a business then it exists / functions / grows without the founder and can be staffed by people who are relatively easy to recruit / train. This takes more effort, more time and at times more risk – but it comes with significantly more rewards. It also forces you to ‘let go’ and potentially ‘dumb down’ your product or service.
The decisions you make as a business owner vs self-employed are significant different. This direction is the key context for all of your business decisions. What is it that you want? What is your exit strategy? If you plan to sell your business then who will you sell it to: an employee, a competitor, a supplier, a distributor or an independent party. It is important to know who (demographically) you think will buy your business and then orientate it towards them.
You can comfortably do either. Just make sure you know what you are (self employed or a becoming a business) and plan accordingly.