How to Start a Business

By Sherry Michaels

When people ask me about freelancing or starting their own business, I usually have to restrain an insane giggle and refrain from quoting a 1978 Saturday Night Live sketch with Steve Martin. The topic of the bit was "How to be a Millionaire." His entrée was, "First, you get a million dollars."

Late-night jokes aside, there are things you need to know about freelancing or owning your own business. And in these tough economic times, it is very important that you have or build a cushion for those times you’ll be down, because those times are inevitable.

Here are the first few steps I’d advise anyone considering starting their own business or branching out as a freelancer.

Think About It

Why are you leaving the corporate world? Are you ready to truly be an expert in your field? Do you have a lot to offer, something for which people are willing to pay the going rate? A thorough self-examination at this point is important. Owning your own business is a bit like parenting. Starting off on your own can produce some terribly painful times of isolation, rejection, uncertainty, and discomfort in general. If you experience one of those times when starting out, cheer up! Those times pass, return, and pass again. But it is imperative to determine whether you really want to go through what is truly an emotional professional roller coaster ride.

Gather Your Resources

• Capital. I’m not serious about needing a million dollars, but you will need enough capital to sustain you through tough times. Figure out what that is. What does it take to keep heat, light, and sound in your house and food on the table? Pinpoint what that number is, cushion it by 20%, and get it in the bank. Touch it only when you aren’t getting work.
• Expertise. Gather book-keeping, legal, and technical expertise. Shore up anything you can’t do for yourself. You’ll need a professional tax preparer (and unless you have been one, please don’t go this one alone). If you think you won’t need an attorney, think again. There are predators lurking everywhere. Investigate the very best talent you can find, negotiate a rate you can live with, and tap them whenever you need advice. No small company these days can function without highly specialized help in these areas, so don’t even consider trying.

Here are the first few steps I’d advise anyone considering starting their own business or branching out as a freelancer.

• Image. Make sure your portfolio is fingertip-ready, and online if possible. Get a creative, well-navigated website set up, and match it with a professionally created business card. Don’t go cheap here—your business card creates every bit as strong an impression as you might yourself. Prepare branded templates for invoices, statements of work, and services agreements, and have them ready to use at a moment’s notice.
• Marketing. Read about or tap into marketing and sales philosophies. Pick how you want to conduct your business and access consultants who align with your values by connecting with them and engaging them in conversations online. These folks—the really good ones—are very giving of their time and they’ll be happy to coach you informally up to a point. Past that point, be ready to add them to the list of professional services you pay for. Eventually, you’ll probably need them.
• Message. Learn how to present yourself and your services in a succinct, sincere way. In a world of flip, hokey, over-bloated terminology, sincerity is your strongest calling card. Always go long on this characteristic. Direct, principled self-representation is always the best policy.
• Sales. Selling your services is a necessary function for you now, and you’ll need to learn how to generate revenue without compromising your principles. Do not neglect this function, because without it none of the others will happen. You’ll need to have a fair amount of analysis skills, the ability to communicate what you’ve analyzed in a succinct manner, and a way to communicate that yours is the appropriate solution. You’ll also have to negotiate whether you’d like to or not, because procurement departments in most companies require it. Know what you must have, know where you’d like to start, and ensure you get what you need. Otherwise you won’t make a profit—and yes, in your "business owner" life, making a profit is suddenly important to you. Understand that you can perform this function with the same level of integrity as any other part of your business, despite what clichés you may have seen or heard about salespeople. Never, ever neglect this function in your business. Payment is dreadful and inevitable.

Be Prepared

For the first two years, the phrase "work-life balance" should be the last thing you should be thinking. There is a lifecycle in all businesses. The startup phase is the most critical, of course, and long days are necessary. I know of no small-business owner who truly has work-life balance. If the first two years are successful, you’ll reach a point at which you’ll need to make decisions about what your business should look like "today." Technology changes; business itself changes. You’ll need to adapt with those changes. Be ready to flex, adapt, and stay alive. Hopefully you’ve been socking away more funds in preparation for this day. This may mean reinvesting in yourself or in others around you, perhaps your employees. You may have to update your website or attend classes for additional certifications. When you were an employee, your company probably invested in you or you went stagnant there. When you are in business for yourself, you have to be ready to invest in yourself.

Hiring Employees

If you determine that you want to have employees, you probably have another learning curve to enjoy. Employment litigation is a consideration for small businesses because of more complex legislation with each passing year. Some states are friendlier to small business than others. You’ll need to know exactly where you stand and learn to manage employees in a humane, legal way. Attention to detail, always a plus in your life up to this point, may actually hinder your abilities to manage others in a small business. You’ll have to adapt to work styles you may not even like, and you’ll need to know where your personal "good enough" bar is. You’ll also need to learn how to get work out of people that goes beyond that bar for your clients’ best interests. It is a tough balancing act that, with time, you’ll perfect.

Last Words

Starting your own business isn’t for the faint of heart nor is it a semi-retirement hobby. You wear a lot of hats: you are no longer just a "technical communicator," but you are also a salesperson, marketer, production specialist, deployment manager, invoicing and/or payroll clerk, customer service person, and contracts person, among many other roles. That’s why the first two years are so tough. You have a lot to learn even if you know a lot. Line up your supporters and reach out for advice. There is a whole world of entrepreneurs out there willing and eager to help.

Owning your own business takes savvy, a ton of work, and a lot of patience and persistence beyond your wildest imaginings. It is, however, a way to build a life for yourself and for valued colleagues. It can be satisfying in a way similar to raising a family or working in community outreach. At the end of the day, I’m happy to know that we do touch the work lives of thousands of people and, for me, that’s what it is all about. And in my opinion, to Steve Martin’s point, a million dollars can’t hurt either.

Owning your own business takes savvy, a ton of work, and a lot of patience and persistence beyond your wildest imaginings.

Sherry Michaels is a senior member of STC, and president and owner of Michaels & Associates Docntrain, Ltd., an S-Corporation dedicated to building well-designed, valuable and timely training and documentation. Michaels & Associates was founded in 1998 in Scottsdale, AZ, and counts Avnet Electronics, Aetna Medical Management, Apollo Group (University of Phoenix), Dow Jones, MINICooper USA, Pegasus Solutions, Spirent Communications, and Weight Watchers among others as clients. Avnet was Michaels & Associates? first client, and remains a client today. Among many unusual aspects of the company is that its? clients are all over the country and its employees and sub-contractors all work from their homes. In her spare time, Sherry gardens, knits and/or crochets, makes jewelry, trains a gregarious mini-Goldendoodle named Molly, and is planning for her first grandchild, due in May.