Becoming Your Own Boss (BYOB, 7.0)

This final series of articles covers topics that will hopefully not be needed for you and your independent contracting business, namely what to do "If Things Go Wrong". This first article covers topics that will hopefully not be needed for you and your independent contracting business, namely what to do "If Things Go Wrong". If you prepared properly, you didn't just leap without looking, so this shouldn't come up. However, even the best laid plans of mice and men sometimes go astray. To paraphrase a pungently worded bumper sticker that has been around a while, "STUFF happens." To further complicate matters, we often err in evaluating our situations. Sometimes, almost in panic, we view a situation as much worse than it really is; sometimes, in blissful ignorance, we fail completely to see its seriousness. This article and the remaining articles in this series offer some advice on the subject of "hard times".

Problem Periods

There are two periods during which things could go awry:
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At the start of your business life, and

Any time during the rest of your business life.

No, this is not a lame attempt at humor. There is a distinct difference, and that difference is important. In a word, the difference is Experience. In the first few months of business, it is possible that you will not recognize a potential problem early enough (because of inexperience) and deal with it decisively enough (again, because of inexperience) to prevent it from becoming a serious blow or perhaps even a death knell to your business. After a few months in business (or perhaps several years if you insist on learning slowly), you will probably have acquired enough business acumen to recognize the difference between a small problem and one that could truly threaten your financial well being. Also, you will have acquired some experience in dealing with problems, so there will be a somewhat smaller chance that you might allow a small problem to become a large problem.

Experience is a great educator. The hard part is surviving the education process.

Recognizing The Problem

There are two classes of problems: business problems and personal problems. Both classes of problems have the potential of affecting your business adversely. All significant problems, irrespective of cause, eventually become financial problems if not addressed in time. Examples include:

1. If you are just getting started, your marketing efforts could be less than optimum in effectiveness, or the demand for your services could be somewhat less than you anticipated. No contracts yet, no pay yet.

2. If you are just getting started, even contracts that are "in process" could be slow in coming. No contracts yet, no pay yet.

3. An equipment difficulty could slow or stop your work output. Less output, less pay; no output, no pay.

4. A personal or family problem could slow or stop your work output. Less output, less pay; no output, no pay.

5. A non-business disaster of some kind (fire, burglary, storm, flood, et cetera) could slow or stop your work output. Less output, less pay; no output, no pay.

6. A personality conflict with a client or some other improper handling of client relations could cause the cancellation of a contract or the outright loss of a new or follow-on contract. Fewer contracts, less pay; no contract, no pay.

7. Simple non-performance on your part (for whatever reason) could result in your losing a contract. Fewer contracts, less pay; no contract, no pay.

8. A client's financial problems could cause cancellation of a project, or delay of a project, or a decision to complete a project in-house. Fewer contracts, less pay; no contract, no pay.

9. Less than adequate on-going marketing performance on your part (for whatever reason) could result in fewer contracts. Fewer contracts, less pay.

The list could go on, but you probably have the picture by now. Obviously, it takes money to satisfy your financial obligations, and it doesn't matter whether those obligations are business or personal. If you wish to remain solvent, the obligations must be met.

This is the final series in the Becoming Your Own Boss set of articles. If you have been following the set in the numbered sequence, you have been familiarized with today's employment situation and then examined your own situation in the BYOB, 1.x and BYOB, 2.x series. The BYOB, 3.x and BYOB, 4.x series took you through first preparing for business and then actually establishing your business. The last two series (BYOB, 5.x and BYOB, 6.x) taught you many of the aspects of marketing your services and the accounting topics you need to be aware of as an independent contractor.

The next article (BYOB, 7.1) goes into and evaluates the money-related problems that you might encounter as an independent contractor.

To read the rest of the series click here