Going it alone - self employment

‘I’m going to work for myself’ is a cry that is often heard on the lips of Service leavers. ‘I’ve had enough of taking orders from other people; I want to do my own thing.’

The factual realities of business start-up are covered elsewhere in this edition; but there are some issues that people might like to consider before they commit themselves too firmly to a course of action that they might later regret. Even if you are absolutely certain that this is right for you, it might be sensible to read on and learn from some of the collective experience of those who have gone before you.

Just like new recruits in a unit, it takes time to acclimatise to new ways and an unfamiliar world. There are experiences to be had and lessons to be learned. Some of them may be expensive, and it may be better to learn the ropes and trip over them at someone else’s expense. Most brand new civilians with blue or khaki L-plates get some things wrong in the early days, no matter how much may go right a little later. So, the usual advice is to go it alone only once you really know what you are doing.

Whilst large numbers of start-up businesses are successful, many are not. The statistics of business failure make horrifying reading. Sometimes this is because one of the ‘four Ps’ – product, price, place and promotion – is wrong. Often it is due to cash flow. Banks, HM Customs & Excise and the Inland Revenue do not usually hang around until the inexperienced business owner is ready to pay in order to collect what is owed to them. Other creditors may be equally impatient, while bad debtors and slow payers often put otherwise healthy firms in jeopardy.

By the way, anyone who has to spend a little time working out just who those terms might refer to is definitely not ready to fly solo in the business world.

There are other considerations as well. Most small businesses start in a spare room in the proprietor’s house. Anyone who has never worked from home for extended periods should have a trial run before they commit to it seriously. It can be very difficult to separate work from free time without the clean break that commuting to and from an office provides. Spouses who have hitherto had unfettered use of the house may not find having their best beloved just down the passage entirely to their liking; and it can be all too easy to do more interesting things at home than dealing with that boring-but-important paperwork.

The alternative is premises, which can be expensive and have letting agreements that require a long-term commitment. In any case, location is a key factor in business success and good locations tend to cost serious money.

Perhaps you plan to be a consultant, working in clients’ offices. Obviously you will need to be an expert in your field or why should anyone be interested in your opinion? You will need to keep up to date with events and developments in your area – which takes time – or you will find work hard to get once your current range of contacts and expertise has moved on. You will still have to manage your business and yourself and, even more importantly, promote and market yourself to future clients. You must be pitching for contracts while still fulfilling the requirements of the ones currently on the go.

It can be hard for a one-man-band to cope with the feast or famine that is the lot of many micro businesses. There may be little capacity left for someone who is already working 10 hours a day on a contract and spending some time on the necessary accounts, payroll, VAT, insurance, reports and returns (yes, there are plenty out here as well) to be actively seeking the next lucrative contract.

Don’t forget, either, that you will not be paid for holidays or when you are sick. Your pension arrangements will be your responsibility, although the Chancellor will continue to be only too happy to remove large sums of cash you have earned to spend on causes closer to his heart than your well-being. And we have not even mentioned data protection, Companies House compliance, business plans, Internet security and anti-hacking, personal guarantees for loans and other potential horrors.

No one should be discouraged from starting a business by anything written here. However, anyone straight out of the Armed Forces should pause before committing themselves and be sure that they know enough to take this step. Commercial life is hard and there is a great deal of competition in the business jungle. It may be better to learn the survival rules working for somebody else before entering into competition with people who may not be as good as you but have years of vital experience that you currently lack.

Unless your idea is so clever, or your expertise so unique, that delay might be fatal to the rapid acquisition of £millions and early retirement, hard-won advice is to learn at least a little about business before going it alone. After all, ‘Time spent in reconnaissance is rarely wasted!’