How to Avoid the Number One Self Employment Trap

How to Avoid the Number One Self Employment Trap
By []Pierre Pinkerton

Experience is the best teacher...  quite cliche you may be thinking, but oh sooooo true. Many have ventured (as myself) into the realm of self-employment with grandiose plans to conquer the market and make a windfall of cash. Not to say these objectives are far-fetched, but there's a lot that goes on between the time you begin and the time you potentially reach these goals. I would like to share and hopefully expose with you the Number One Reason for Self-Employment Failure. Before exposing this truth and giving some points of practical prevention, let's discuss briefly why people choose to go into self-employment.

Why Self-Employment?
Things that make you go hummmmm... what a great song from the 90s and a great explanation for the reason why people choose to be self-employed. I'm sure that I could verify this with either SBA data or some other small business think tank stats, but just from working with small business owners and aspiring entrepreneurs over the past ten years, many just wanted to be their own boss. Prior to jumping into self-employment myself, I'd say, yeah, that's a darn good reason to be self-employed. However, after experiencing operating and maintaining a small business, I'm now a little skiddish to quote the great Riddick. I've discovered that being your own boss can be 10X as hard as working for a taskmaster of a boss because unless you're a naturally disciplined person with great organizational skills, the small business operator road can be TOUGH. In addition to dealing with yourself, you also have to do numerous jobs with at least a minimum level of quality just to hold things together. I hear some readers out there thinking that the Internet and the various forms of technological innovation makes things easier... not so much. Yeah, maybe increasing productivity and efficiency, but hey, work is work no matter the platform you do it on. Now, let's talk about the Number One Reason for Self-Employment Failure.

Self-Employment Failure Numero Uno
Lack of understanding the basic business contract. Yep, shocking, isn't it? Let me explain. When most people decide and eventually begin a small business or become self-employed, they are focused on making a widget and / or providing a service to a hungry market that's willing to pay $$$. No doubt, I agree, it's tempting to fall head over heels in love with the $$$ before considering the costs of doing business. Yes, my friends, there's a cost to each and every business transaction along with the rules that govern them. Why do you think that most business deals among family members without the use of a contract typically falls apart and creates division?

The primary weapon that a person has in being self-employed is the business contract and for good reason. Prior to consummating a business transaction, there must be a mutual understanding between the vendor and customer / client. One of the most important clauses (geez, I'm starting to sound like an attorney) in a business contract is the scope of services explanation because in this part you let the client know what you will and won't do in exchange for the $$$. Trust me, without this clause, you are setting yourself up for a rude awakening and maybe even failure. There needs to be a clear understanding of not only what you will and won't do, but also the term of the business transaction. In other words, you need clarity of the frequency and length of time of providing the widgets and / or services as the business owner.

Here's a lasting bit of advice about gaining understanding of the basics of the business contract: Never shy away from walking away from the transaction if the terms are not favorable to you and your business. I know... it's hard to turn down $$$ especially when there's a need for it. Again, trust me on this. All $$$ ain't good money and plus there's more opportunity to gain business than you know. is an online platform that specializes in providing expert level advice and guidance to the micro entrepreneur in the areas of accounting / finance, operations, management, sales and marketing, human resources, and lending in order to help grow your business and maximize your cash flow

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