I had a pretty lively discussion with someone on the twitter this morning who had some strong opinions about how everyone should be self-employed and that we should quit relying on “The Man” for a job. I expressed some concern that before cheering them to jump off the ledge, we should perhaps maybe encourage people to first assess the risks, that they should jump with eyes wide open.
Twitter being what it is — by the end of the discussion — I was accused of scaring people, looking for more ways to fail than to succeed and killed fifty people on the highway with a load of wood. I may also have been called stupid, but I ignored that. The whole time I was chatting, I heard Rebecca Pryce’s voice in my head from the season finale episode of Mad Men:
“You had no right to fill a man like that with ambition.”
Before I offer an opinion, I’d like to share a story.
A few years ago, a neighbor down the street lost his job. He was fairly young, had an engineering degree and by all measures, was gainfully employable. Only the market was soft.
A few months into it without finding work, his wife left him and his son. Who wants to hitch their wagon to a loser? Not her.
To keep busy, he started repairing bikes for the neighborhood kids. As it turns out, he was pretty good at it. We would walk past his garage early in the morning and he would be out there almost every day. Week after week, his garage filled up with more and more bikes as his “business” started expanding. He would start his day earlier with each passing week and we got to talking. For a while, I assembled and repaired bikes in retail stores for Huffy and so I shared some tips and tool suggestions, which he gobbled up hungrily.
But I also worked in the corporate office and saw the “other side” of the assembly and repair business; the ugly side of product liability. I saw — and testified at — liability hearings where we were accused of all sorts of negligence. We lost some; we won a few but mostly, the insurance finally settled before trial. There was almost always a settlement.
“Do you have liability insurance?” I would ask him from time to time.
“I’m not big enough to sue,” he’d say. “Beside, insurance is expensive.”
Until some kid got hurt on a bike he repaired.
Overnight, he turned from a neighbor saving a mom from the expensive bike shop to a predatory monster, out only for profit. At the end of the ordeal, he lost a $130,000 judgement, was fined by the city for running a business without a license in a residential area, sued and fined by the State of Ohio for uncollected sales tax and was slapped with other various tax avoidance annoyances. At some point during this ordeal, he was able to find a job and is still paying off the judgement and fines.
Even though all his revenue and more was swept away in one fell swoop, he was able to feed his kid and keep his house with what he charged for the repairs. That was something, but while he could afford the meal. he could not afford the tip. There was not enough profit in his “business” to be able to afford to protect himself. In short, he really wasn’t in business; just scraping by on the dollars of customers too cheap to pay professional bike shop rates. Without the luck of finding a full time job when he did, he would have been destroyed.
Sometimes we pass by his house on the morning walk as he is pulling out of the garage on his way to work. We stop and let him go by, wave and glance briefly into the garage. It is as clean as a whistle, all the bikes and tools long ago having been cleaned out. I doubt very much that he will ever go into business for himself again. And that is probably ok.
In social media, we live in a rarefied world where twitter and blogs attract those most likely to have a penchant for self-employment or entrepreneurship. As we discuss the state of work in this economy, we sometimes forget that most people are not cut out for the rough and tumble world of going it alone. Even among those who are built for it, there are a large percentage of us who will fall by the wayside in failure. That is not fear-mongering or being negative; that is being pragmatic.
During the “good times,” my neighbor was all about being self-employed. He almost quit looking for work and talked excitedly about expanding this repair business. I nodded a lot, hoping he would beat the odds. He didn’t.
It is easy for this new group of self-employed to talk about the new normal being self-employment and entrepreneurship. It is this reality that many are being pushed into and many are embracing in the absence of any other model presenting itself in the near future. Folks like Seth Godin and Daniel Pink are declaring self-reliance as the new state of “employment.” When these gurus romantically wax nostalgia of the good ol’ days when we were all craftsmen, the allure is intoxicating. But the reality is that most of the population was always employed by a small subset of businessmen. History always gets written by the winners. Except here.
History also show us that the breakdown of a social order is almost always preceded by what looks like a bright future of independent work. In reality, it is the frantic, desperate attempts of individuals competing against each other for survival.
If I have learned anything on the road to geezer-ville, it is to tread lightly when dispensing advice. Who are we to claim the right to fill people with ambition?
If you can’t talk frankly about risk, you probably shouldn’t be taking it. If you aren’t willing to share in someone else’s failure, you should perhaps not be dispensing advice to them.
Having been self employed almost my entire life Rufus, I can tell you it’s not for everyone. So many don’t understand the costs involved and the risks are constant. You have to always be thinking, planning and making enough to live, support your business in a professional manner in order to keep things running. I also have to say that if everyone was self employed things would be even more of a mess than they are now. Not everyone is cut out for the intensive work, lack of time off and sacrifices that need to be made at times to stay self-employed and keep things rolling. I think that it’s great for people to try but I know so many that don’t fully understand the true meaning of what is involved.
I was having dinner with friends while you were dropping a comment on this post and as I was driving home, the song “Takin’ Care Of Business” by Bachman Turner Overdrive came on the radio. The line “Look at me I’m self-employed I love to work at nothing all day” stuck in my head. It always does when I hear the song and I chuckle because that is what people who wish they were self-employed think it is all about.
Some days, I wish someone else would have to worry abut making payroll and cover for that webinar the sales guy who didn’t make it in today was supposed to host. If all goes to plan, I should be joining the investor class in a couple years and this will all be some CEO’s problem. Just send me quarterly checks on my earnings. Is that too 1%-y? I don’t care.. working for a living sucks, self-employed or not.
Regardless, I have been my own boss so long I am entirely, severely unemployable. But to say that everyone should be self-employed is probably just as reckless as telling me to get a job.
I read the post and was about to comment, but you said it. I have had my own business for over 25 years. I mentor start up small biz and companies and some people just should NOT be in business for themselves. I will use this post, TY @DogWalkBlog this will be very useful.
Cool.. thanks!!!
“Until some kid got hurt on a bike he repaired.”
Seriously? Kids get hurt on bikes all the time. Kids do STUPID THINGS on bikes all the time. I mean, obviously, I don’t know the story. The bike could have rattled apart into a handful of bolts because of a mistake he made. But depending on the situation, and the severity of the injury, my first thought would not have been “curse that repair dude!”
(I want to be self employed too, but in the “sit home and write books and blog all day” sort. Nothing mechanical needed. Maybe teach some dogs tricks. That could conceivably require insurance as well, I feel.)
The front wheel came off as he was hopping a curb. But it doesn’t matter any more, there are no “accidents.” SOMEONE must be at fault. God knows it can’t be the parent/kid who didn’t put the wheel clips back on after changing a tube or anything like that..for that, there is no paper trail.
The lawyers hauled in everyone from the manufacturer to the retailer to the original assembly company to my neighbor. All those claims got dismissed but my neighbor’s did not because he was the last one touching the bike. And his lawyer was probably not that good; he was hired at the last minute as it looked like he was going to lose. What guy fixing bikes on the side has a product liability lawyer? BTW, most of that settlement went to the lawyers….
You probably will need insurance. And a lawyer. Someone might take offense at what you write. Someone might think one of your characters is too close to them in real life. Someone might make a claim that you stole their work. Never ends. Always people out there who would rather steal from someone than create their own stuff… and self-employed lawyers who also have to eat… and you’re their dinner.
Yeah, I forgot that there’s no such thing as accidents anymore.
Everybody is just far too sue happy…it’s sad to me that a lot of people have made that in itself a living.
Self employment for me was a love, hate hate hate relationship.
I did it for seven years. I don’t know if that is a long time or not. Sometimes I think it was a long time and sometimes I think I barely even got started. However I look at it, I did it 100% full time for 6 of those 7 years.
One word described my experience: Stressed
When I was busy I stressed about having enough help and when to hire more. When I was slow I struggled to figure out who to keep and whom to lay off.
Whether I was doing 50k a month or 5k a month I stressed about making payroll each week.
Life was nothing but a roller coaster. Work was NEVER a steady flow. Some months we put in 30 kitchens and other months we put in 10.
Every day was what I called “The PO box shuffle”.
I would calmly walk into the post office, talking to myself.
“Okay James, don’t get stressed by what you find in that box. There may be a check in there, and maybe not. This post office box does not own you.”
I would walk up, put the key into the lock and turn the key to open the box.
“Son-of-a! Mother….! Dammit!”
Failure! The emotions of running a business ran me!
Self employment is NOT for everyone. Anyone teaching that it is just wants to sell you something and is ultimately teaching discontentment anyway.
Managing cash flow is much an emotional game as it is very real “we got money/we ain’t got money” game. And the stakes are as high on both fronts. You’re right, in the first few years of my company, I fought those same demons. I think a lot of people who are self-employed do. The secret is to have access to enough cash to be able to ride out the shortage and enough resolve to not spend during the …. oh, yeah.. I see the flaw
People with jobs know when they will get paid and how much. Miss a payroll period when you own the joint and they walk. So when someone with a W2 job starts off by saying, “You know what you oughta do??!!??” when they find out I own my own gig.. well, that is just inviting me to poke ‘em in the eye. What they oughta do is go do what they are telling me what I oughta do. And then write and tell me how it’s going.
Rufus, in the world of mentors, and advice dispensers, one clarion call rings with a thud for me: “Fail fast, fail often and fail again”, the idea being that you learn from your failures and are wiser for the experience.
From the 30,000 foot view, that may be true, but as a ground troop involved in hand to hand combat, failure usually is not an option. If it does occur and you don’t get killed, you usually will have lost just about everything in the process.
I think the “ready, fire, aim” school of innovation is for big, huge companies with big, huge budgets. They have the resources to absorb failure and that is the total antithesis of the nimble entrepreneur.
Most small businesspeople that succeed are the lucky ones (I will not attempt to define luck here.) We don’t hear about the multitude of failures, but they are legion. For every Tony Hseih that rockets to entrepreneural stardom, there are thousands who gave it their best, even with great ideas, only to be handed their head because it wasn’t the time nor the place for what they had to offer.
Life is cruel.
Truer words.
I think back to stuff like the bank bailouts or GM loans. Sure, these were probably good things to do as they kept a lot of people from an unrecoverable disaster, but for bankers to brag that they are smarter than the average bear because they are making tons of money now is for them to forget that if we had let them dip below the surface, there would have been no recovering.
Small businesses don’t get to “float” once they dip below that line. They just die. Period. Dead, gone, done, over. There is no afterlife.
Even if they do all the right things.
That is the main reason few of us are hiring. The risk of failure is far too great. That is what the W2 news media anchor pundit know-it-all analysts will never understand. After all, they can be as wrong about anything as they want. They have a paycheck coming on Friday.