10 Myths about Working for Yourself

I started my first business right out of college (I got my degree in December 1993) and haven’t worked for a day since. My only experience as an employee was six months as a part-time programmer while I was in college.

  1. Those who are self-employed work longer hours

Indeed, many entrepreneurs work more hours than salaried employees. Some love their jobs so much that they lose track of time and work long hours in a row without knowing fatigue. Others structure business processes so that their presence at work becomes essential. Both have deliberately made their choices.

Many entrepreneurs start a business that involves earning an income only while they are directly employed. Usually based on an hourly rate. For example, when a lawyer is at home, he gets no money.

But there is no law requiring you to start this particular business. If you have created a business whose income only comes from the time you work, you have essentially hired yourself. I view entrepreneurship as building a system. You build a system which brings you income. You are left with the function of controlling its operation. It is like owning a golden goose that lays golden eggs.

So the amount of time you spend at work depends only on the type of business you choose. If you don’t like to work a lot, no one is going to make you do it.

  1. The only reason to create a business is to sell it later

This is one of the favorite sayings of Michael Gerber, author of Once Again on the Electronic Myths and other works on the subject. Sure, you can build a business and then sell it in its entirety, or through a stock issue. But no one forbids you to keep it. In fact, it’s perfectly acceptable to build a business, run it for a while, and then kill it.

You, as an entrepreneur, have the right to create whatever business model you want. You are the owner. You can build a business and then sell it. If you just want an additional source of passive income, that’s fine, too. There is no rule forcing you to build a monumental business according to any canon.

A lot of people only do business occasionally at all. They create a business, grow it for a while, and then sell it or close it. After a while, they repeat the process.

You can also run several businesses at the same time. This may seem complicated at first glance, but if you have more than 10 years of experience running a business, you should have no trouble launching another source of income. It’s pretty fun, as long as you don’t overdo it, of course.

  1. Entrepreneurship involves more risks than hired employment

Security is a consequence of control, and working for yourself gives you much more control than working for hire. When you are self-employed, no one can fire you or retire you. What seems safer to you – owning a source of income or renting it? Obviously, owning is safer.

If you have an urgent need to make money and you’re a salaried employee, you’re going to have problems. But if you own the business, managing all of its assets, you can divert resources and increase income at any time. Having control over the business is very important.

It is the employees who take the most risk. You’ll understand the extent of that risk when you hear “you’re fired.” The business owner will never hear those words.

  1. Working for yourself means putting all your eggs in one basket

Ask yourself the question, “How many people do I need to piss off to lose my source of income?” For wage earners, one is usually enough. If your employer fires you, your income will cease immediately. Whether it’s fair or not doesn’t matter, regardless of the reason, you’re left without a livelihood. This is what is called “keeping all your eggs in one basket.”

When working for yourself, you can easily parallelize your financial flows and thereby minimize the possible risk. You have control over the quantity and quality of your income sources. Receiving income from thousands of clients scattered all over the world is much more reliable than relying on a single paycheck.

Erin and I have about 10 different sources of income for two. These include direct sales, sales through partners and distributors, income from advertising and royalties, income from affiliate programs, consulting, etc. Even if our main source of income suddenly disappears, we will still be afloat.

  1. Self-employment involves constant stress

Stress is usually caused by an inability to make ends meet. Regardless of whether you work for yourself or for your uncle. But, all other things being equal, I find working for myself less stressful because it provides more control. Lack of control over your own time and your own life is what causes stress. If you have the ability to say “no,” it’s much easier to avoid stress.

If you set your mind to it, you can build your own business with a very low likelihood of stress. You can turn your office into a comfortable and convenient place to work. You can choose a comfortable work schedule. If you feel stress building up, you can always take a break and rest. No one can make you do anything you don’t want to do.

  1. The customer is always right

If you’re a business owner, you have the right to refuse to work with problem clients. Some clients simply aren’t worth the nerve it takes to deal with them.

Erin and I have dealt with thousands of clients in our 11 years in business, and most of them are wonderful people. But every once in a while, we turn a client down because we don’t want to work with that person. It doesn’t happen very often, but sometimes it does.

I take criticism about myself calmly, but I am annoyed by rudeness, insults or threats. Some people believe that an assertive, boorish attitude can be used to gain any concessions in negotiations. However, I have a different point of view: no politeness, no service.

If you work for yourself, you have no need to work with people who treat you in an obnoxious manner. By refusing to work with an unpleasant client, you’ll save yourself a few more of those who come in on his recommendation. Besides, it’s so funny – to send the ignorant to his competitors.

  1. Entrepreneurs are lonely

Many salaried employees think that chatting with co-workers in the smoking room is what a rich social life is all about. Sure, it seems appealing at first, but soon enough it gets boring. On the contrary, it seems to me that self-employed people are more likely to get involved in meaningful social projects. They do so at least out of a desire to communicate with fellow entrepreneurs and to learn from their experiences.

A self-employed person does not have to be withdrawn and unsociable. Personally, I really like hanging out with entrepreneurs. These people are very active and have an energy that you rarely find in self-employed people.

Having a full-time job implies some built-in socialization, but a closer look will bring up many limitations. The wage earner can be fired for being too social, while the entrepreneur is free to socialize whenever he wants.

In a relationship between a man and a woman, it is much more comfortable if at least one of them, or preferably both of them, are not required to go to work. When Erin and I started dating, I would often go over to her house in the morning and we would chat with her serenely until noon. This accelerated our relationship, and within three months we were living together. My entrepreneurial activities allowed me to change my priorities and put my personal life before my work.

  1. The entrepreneur has to do everything himself

If business owners did everything themselves, it would look pretty silly. Their only inherent responsibility is control.

Erin owns VegFamily Magazine, but she doesn’t edit and produce every article. She has a staff of writers who produce the stories and an editor-in-chief who oversees them. Erin designed and runs the system, and other people keep it running.

You don’t even need to develop your own system. You can use the one you already have. I get my ad revenue from this site, but most of the advertisers come through Google Adsense. I don’t directly place ads or contract with advertisers, Google does all that. If I had to sell every ad unit myself, I’d probably go nuts…it’s too much work for one person.

  1. Owning your own business is too complicated

Being an entrepreneur seems complicated because there is a lot to learn in the beginning. There is accounting, taxes, record keeping, legal issues, insurance, etc. It does take time to learn it all, but it’s not as hard as it sounds. Just find a good book on the subject and dive into learning.

Don’t let the large amount of required knowledge scare you. Most of this information only needs to be studied once. Yes, the first business will be difficult. But the second will be smooth sailing.

If you get it right in the beginning, it won’t be hard to run your business.

  1. You need a lot of money to start a business

This depends on the business. You can start an online business by paying ridiculous money for a domain and hosting. The total cost will not exceed $100 for the entire first year.

When I started my first business (computer game development) in 1994, I put about $20,000 into it. The money quickly ran out, and that was a good lesson for me. So when I started building my self-development business, I aimed to do it with a minimal investment. I spent $9 to register the domain stevepavlina.com and decided that all other expenses would be out of profit. The first 4 months the business did not bring in a cent. Then the money slowly came in. After 22 months, I was making $9,000 a month. I am happy with the result, but I have many more plans, so this is not the limit.

I’m not saying that any idiot can run a profitable business with seed money equal to the price of a movie ticket. You did notice that the site is called Personal Development for Smart People, didn’t you? The point is, you don’t have to put the last of your money into your first business. But you do need to provide value to people. The good thing about online business is that you can create value (like an article) once for a fixed amount of time and effort, and today’s technology can deliver your product to millions of people without any extra cost. You invest a small amount of time in the initial creation of value, and then make a profit on every copy sold. Technology takes care of most of the work and does it virtually for free, and you get paid for the results.

Unlike entrepreneurs, salaried employees get only one payment for the work they do. It’s either a fixed amount or a one-time commission. The rest of the money brought in by the product goes directly to the employer. Employees are very generous to their employer.

Try it yourself

I hope I’ve helped you dispel some of the popular myths about self-employment. Most of these fears are due to nothing. And, of course, the only way to understand entrepreneurship is to experience it for yourself.

I have met many people in my life who are self-employed, and not one of them has ever complained to me that entrepreneurship was a mistake or that they wish they had gone into self-employment instead of business. Even if their finances weren’t very good. Working for yourself is a powerful means of self-development, and often success comes from using the skills and knowledge gained along the way. Like most entrepreneurs, I would rather give up all of my business projects than the knowledge and experience I gained while building them.