Recently, I celebrated my fifteen-year anniversary as a management consultant. It has always been a life-long dream of mine to be on my own and in 2004 I realized that goal. I had spent some twenty years in corporate America prior to and breaking out on my own was not happenchance – I had a plan.
While there is no silver-bullet in starting your own company, many reach out for guidance simply due to the fact that they are forced into entrepreneurship (read: lay-off) and think they want to make the quantum leap to sole proprietorship. Often, I am asked by other budding entrepreneurs “how did you make the leap?” and asked for tips.
I attempt to inform them on the number of pratfalls that one must navigate as well as the rewards. It’s can be risky, you need to be well-capitalized or have significant cash flow, you probably will have to work harder than your corporate job and the list goes on. But even with all these uncertainties – and trust me, there are many uncertainties in the corporate world as well – the upside can be fantastic. If I had to cull it down to my top five list of “must-haves”, here it is:
Be Prepared To Work: This is by far the one area of entrepreneurship that most people fail to realize. Be prepared to work your tail off. Sure, you will have more flex in your schedule and it may appear that you are loafing – yes, I like to squeeze in nine holes during the week – but having your own business is a 24/7 mindset. How you structure your schedule and the discipline required to constantly deliver revenue to your company is mission-critical for continued success beyond the “honeymoon” period. A day-in, day-out approach to continually moving the needle forward requires a plan that must withstand the temptation of watching TV or lunching with friends.
Develop Into An Extraordinary Networker: It is time to break out of your shell and proactively build that network base. I have long been an advocate of LinkedIn and continually building up your network will create a sustainable enterprise. Not only will you have the ability to create value for your network connections through consulting contracts, but also being the “guy that knows everyone” attracts others to reach out to you. It keeps you in the loop and at the genesis of new possibilities. This continual influx of meeting new business associates sets up future growth opportunities for your company.
Become An Expert: Ironically, the fact that I produce written articles every few weeks helps to frame a certain level of expertise on the subjects that are addressed. Magazines that run my stories as an article, showcase my expertise and often I get asked to speak to associations or companies on these subjects. I have a fairly passive approach to securing paid speaking engagements but usually find myself with a half dozen a year. So, not only am I paid to speak on an area of expertise, but I am generally speaking in front of an audience that are ideal clients for my consulting services. The articles express the expertise, the speech validates it and the one-hour “infomercial” lands the future consulting gig.
Be Mindful Of Your Brand: At the end of every speech I deliver, I often chuckle because no matter the subject matter, the very first question I receive is “how did you come up with the name Gray Cat”? I could have easily named my company “Matthews and Associates” or something as mundane as that, but the Gray Cat brand has transcended into to something more than a guy that consults. The logo, the merchandise, the fun associated with the name all help make my little consulting company a bit more memorable. In fact, in some cases, people remember Gray Cat more than they do my name!
Know The Tax Code: Lastly, regardless of the political rhetoric surrounding the tax code and its impact on small business, the fact of the matter is that small businesses are levied with a myriad of taxes. I am shocked by how many budding entrepreneurs fail to understand the taxes that small businesses pay. My company has essentially one of the easiest business operating models that a small business can have. I invoice a few clients per month; receive a few checks a month; pay a few bills a month; and have very little inventory and/or depreciation of capital assets. Filing as an S-Corp, my outlay on taxes is between 25% and 39% of federal taxes; North Carolina state income taxes ranging from 6.0% to 7.5%, social security and Medicare (twice as a matter of fact for employer and employee) of 15.3%, so nearly 50% of all income goes to taxes and fees.
In short, the leap I made over fifteen years ago has been a fantastic adventure and it is not showing signs of slowing down. But, make no mistake, I work. I work very hard at what I do and despite the fact that I can probably take my foot off the pedal a bit now, I don’t. I know that for me to maintain this lifestyle for the rest of my working life, it requires a tremendous level of discipline. I plan for success then I make a commitment to the discipline of work.
I hope anyone that reads this article takes heed in the tips and I wish the best of luck to all the soon-to-be consulting entrepreneurs!