Maybe you’re cringing at the thought of going back to an office. The seed of a business idea floats around in your head between work videoconference calls, after the kids are asleep or while you tend your pandemic garden. Or perhaps you were laid off during the pandemic and forced to work for yourself, and now you’re wondering if you should continue down this path.
“In 2020, there was an explosion in new business applications, reaching nearly 4.5 million by year’s end,” according to a February report by the Economic Innovation Group, a Washington, D.C., think tank. That’s an increase of 24.3% from 2019 and was the highest on record — 51% higher than the average from 2010 to 2019.
“COVID-19 was a social, cultural and emotional shock the likes of which we have not experienced for generations. Becoming an entrepreneur is a deeply personal decision, and the pandemic may have delivered the push for many to embrace it,” the report said.
Deciding if self-employment is right for you depends on your personality, your financial situation and your ability to adapt. Here are tips from people who became their own bosses.
Many of us now appreciate the flexibility of working from home. As a freelancer or independent contractor, you would have the power to set your own schedule.
“Being in charge is very, very attractive to many people,” says Keith Hall, president and CEO of the National Association for the Self-Employed, or NASE, a resource and advocacy group. “The other side of that coin is that when you are in charge of your own destiny, you are also responsible for it.”
Evaluate your abilities as a prospective employer.
“Freelancers need to be self-motivated, work well independently, be organized, learn how to market their services well and be comfortable with a certain level of uncertainty,” CEO Sara Sutton said by email. She runs two companies focused on remote and flexible job opportunities: FlexJobs, a job search site, and Remote.co, which provides resources for companies considering remote work.
Hall suggests asking yourself if you have the motivation to be in charge of your own destiny. “If you wake up Monday morning and decide to stay in bed late, that’s a financial loss. Nobody is going to be standing over you making you get out of your bed.”
Before deciding whether to freelance, become a consultant or turn your side hustle into a business, take a close look at your finances.
Many cobbled together a budget during the pandemic. Revisit that plan to make sure you understand your hard costs, such as food, rent and day care. (The 50/30/20 approach is a quick way to divide your dollars into three buckets: needs, wants and savings.)
Isolate what you can put toward a business. Small costs like purchasing a domain name, buying the premium version of a software or membership fees for a networking group can add up.
Use your budget to set short- and long-term business goals, Hall says. “Know exactly what you need to earn to meet your family goals and translate that into a time schedule.”
You may need to keep your day job for a while, but you can still build your business muscle.
“Being an entrepreneur was never a goal for me,” says Afenya Montgomery, founder and CEO of The iCAN Collective, a creative workspace and event venue for women entrepreneurs of color in Chicago. Montgomery, a registered nurse and health care administrator, started health care consulting on the side. Her hunt for resources and support inspired the idea of building a community for women entrepreneurs of color.
Montgomery and her husband were raising three children and had no business experience, so leaving her day job wasn’t an option. She spent four years learning the ropes of entrepreneurship before she felt confident enough to quit.
She hosted networking events, opened a business bank account and finally registered her business as a limited liability company. Taking small steps can make the process less overwhelming, she says.
Between strategies, goals and budgets, the thought of working for yourself might seem daunting, but entrepreneurs say you don’t have to do it alone.
Laura Licursi, founder of Elite Virtual Assistants, an agency that connects employers with remote assistants, says the pandemic was surprisingly hard on her online-only business as clients cut back. Licursi, who works from the Cleveland area, navigated through the uncertainty with a mentor from SCORE, a network of volunteer business mentors that partners with the Small Business Administration.
“My mentor helped me work through the inner workings of the business when things were slow, which really helped when business picked up again,” she says.
Entrepreneurs have more resources available than they realize, Hall says:
This column was provided to The Associated Press by the personal finance website NerdWallet.Amrita Jayakumar writes for NerdWallet. Email: [email protected]. Twitter: @ajbombay.
The article Should You Become Your Own Boss? originally appeared on NerdWallet.
The onset of the COVID-19 pandemic was disruptive for many small businesses. However, there are insights that can be drawn from this experience — and these could help your business survive the next challenge or capitalize on an unexpected opportunity.
Business agility is vital. Small businesses that can quickly make adjustments to daily operations, the ways products and services are sold and how funding is secured have an advantage during positive and negative economic conditions. How can a business increase agility? It begins with automation.
Marketing, point-of-sale, accounting, payroll, human resources and other business functions can be automated through apps and other digital platforms. This automation can allow a business to explore additional sales opportunities, retain existing customers or even pivot to a new business model. Cloud-based systems can give a business the flexibility to quickly move its workforce from an office location to another setting, if necessary.
E-commerce, the buying and selling of goods and services over the internet, is nothing new. However, the pandemic has amplified its importance. Retail e-commerce sales in the first quarter of 2021 increased 39.1% from the first quarter of 2020 and accounted for 13.6% of total retail sales in the first quarter of 2021 per estimates from the Census Bureau of the Department of Commerce. E-commerce sales can supplement your revenue and also diversify your customer base.
A well-developed website where customers can shop and purchase products allows a business to quickly adjust when in-person sales aren’t possible.
“Unless you have a website, you are not in business,” says Deepak R. Vora, a volunteer at SCORE, a small-business mentorship organization. Vora adds that a website must also be compatible with mobile devices.
Offering multiple payment options allows a business to retain customers who have changed the way they pay for products and services. In a survey, 54% of U.S. consumers said they would switch to a new business that installed contactless payment options, according to a 2020 study by Visa. An automated point-of-sale system can expand payment options to include contactless payments, credit cards and mobile wallet payments.
Over the past year, small businesses have developed new ways to deliver their products to customers when in-person sales weren’t available. Curbside pickup options are now offered by many businesses. Restaurants have turned to delivery services such as DoorDash, GrubHub, Uber Eats and Postmates. And businesses that had previously offered in-person training and classes moved online to deliver their services.
Before the pandemic, Dr. Mani Kukreja was building her integrative health practice, LivAgeWell, through educational workshops and client meetings. When in-person meetings were no longer possible, she thought, “What if I could do something for a broader community, for a bigger audience?” Kukreja created a 21-day immunity course that can be downloaded from her website. The course saw great success, and Kukreja is now planning to move forward with a book on the same topic.
A local disaster or larger national event can make it difficult for a business to get the supplies it needs. Nearly 3 out of 4, or 72%, of U.S. businesses surveyed in early 2020 by the Institute for Supply Management reported supply chain disruptions resulting from the COVID-19 pandemic. To minimize the impact, a business can develop relationships with multiple suppliers, preferably in different geographical locations. Not only does this provide healthy competition, but it also can allow a business to move to a backup supplier when necessary.
Quick access to business loans and emergency funding can help your company survive a crisis. Although loan program requirements vary, business owners who focus on the following may be able to speed up the application process:
Lenders commonly use federal tax forms to determine eligibility for loans. IRS Forms 1040 and 1065, for example, were used to establish eligibility for the federal Paycheck Protection Program and to calculate maximum loan amounts. Filing tax returns on time can help a business avoid delays when tax information is needed during the loan application process.
Although a minimum credit score wasn’t needed for a PPP loan, many other business loans do require one, including bank loans. Maintaining a good credit score (typically between 690-719 FICO) and addressing issues immediately can help a small business avoid funding delays at a time of crisis.
Current copies of tax forms, profit and loss statements, payroll records, contracts, licenses, insurance policies and other important documents are often required during the loan process. Digital copies in cloud storage apps are easy to access and also protected from fire, flood and other disasters.
Lisa Anthony writes for NerdWallet. Email: [email protected].
The article 6 Ways to Make Your Business More Agile originally appeared on NerdWallet.
