Folks venturing into self-employment usually put a lot of thought into the details of the business they start — but often short-shift on developing a vision for the life they want to lead. Here is an excerpt from The Women’s Small Business Start-Up Kit on integrating bigger-picture life considerations into your plan for what type of business to start.
Pick the Right Business Structure and Size
The type of business you start and its size can definitely affect how much work it will take for you to run it. If maximum freedom and flexibility are important to you, one good approach is to start a business that uses a freelancer or independent contractor model, in which you can do most of the work yourself with few or no employees or contract staff. (I often use the term “freelancer” and “independent contractor” interchangeably; there’s no meaningful difference between the two.) Of course doing all the work on your own often means you’ll be very busy, but the upside is that you’ll often be able to do the work on your own time, according to your own schedule (subject of course to your clients’ needs).
Freelancers often struggle with whether it makes sense to hire a few workers or assistants to help boost productivity and income. While doing so might help you be somewhat more productive, the burdens of managing these helpers often (though not always) outweighs any reduction in your workload. Some freelancers find a happy balance with one or two key assistants (usually contractors rather than employees), and find that hiring any more than that results in too many management commitments.
On the flip side, operating as a freelancer will limit your growth and ultimately prevent you from following the somewhat traditional arc of business development, in which an entrepreneur gradually shifts out of the day-to-day operations of the business. If you eventually want the business to run without you, you’ll of course need to hire other people who, through training and experience, will manage the business independently. This is quite a different scenario from being a freelancer, so it’s important that you clarify your long-term goals when developing your vision of your business.
Ask yourself, do you envision doing the hands-on work of the business for the long haul, or do you see yourself evolving to a more strategic position, overseeing the growth of your company that runs under your direction? For example, if you have graphic design skills, you could start a graphic design firm with a staff of ten, or you could take the route of working as a freelancer, taking on clients and projects only when they fit your schedule. Starting a firm will undoubtedly take more work (and start-up money) from the outset, but in a few short years you may get the payoff of having a well-oiled machine of a firm that allows you to take five months off. Starting as a freelancer is usually simpler but it doesn’t offer a structure that allows you to take time off while the business continues to run.
Bear in mind that you can always start as a freelancer and expand down the road. A few years later when the kids are in school, for example, you could take the leap and launch a fully staffed firm — with the advantage of having some crucial experience under your belt, not to mention loyal clientele.
—From The Women’s Small Business Start-Up Kit, 2nd ed. (Nolo).