There was once a time when it was just me. I was providing computer services. I was working a lot of hours. But I wasn't making any money at it. If I stayed on that path I'd fail. Today, I'm making money. Why? Because I'm supervising 10 people who are providing computer services for me. I'm making money off of them.
Want to quit your job and be a freelancer? Be a one-person shop? I have bad news for you and you need to hear it now, before it's too late. You won't be able to make a lot of money if you're running a one person business. Maybe, just maybe you might make a living. But that is all. Why?
First, let's do the math. There are only so many hours in a week. If you're a one-man (or woman, of course) freelancer or business owner and let's say you charge even as much as $100/hour for the work you might think... wow... in a 50 hour week I can make $5,000! Which means $20,000 per month or $240,000 per year. Ka-Ching! But this is not reality.
For starters, there's no way you'll be chargeable for 50 hours per week. Because you are alone you will need to spend time doing paperwork, administrative tasks and, most importantly, looking for more work when the current job runs out (and they always run out). You will easily spend half of your time doing that. Which means that, you may be able to make about $120,000 per year, which isn't bad. Except you'll have expenses, like rent and car and repairs and supplies and computers and whatever else. Your expenses will probably run a few thousand a month so let's assume after expenses you're netting about $80,000. Then there's taxes, and not just Federal. There will be state, local, real estate, schools, tolls, export, import, duties and those hard to understand fees on your cable bill. So lop about 30 percent off that $80K and you're down to a net living of $56,000. Those are the hard, hard numbers. Still want to do this?
Well, if you do, then you can't do it alone. You will need people.
And not salespeople. You are the salesperson. You say you're not a good salesperson? Tough.
Because you're the only one credible enough to talk to a customer. It's your business, your craft, your specialty, your expertise. In the end a customer is not buying from your business. They're really just hiring you. You're the product. So you've got to be the one to sell. If you don't like selling don't start your own freelancing business. Business owners that succeed are at their core good salespeople. Bill Gates is a programmer at heart. But to build Microsoft he sold Windows. You can't afford to hire a salesperson. And no salesperson will work for you on just commission.
What you will need is a partner. Or two. Or three. You can't do everything. So you have to find others that do things that complement your craft. You're an independent software trainer so you partner with a few independent IT professionals. Or you're a lone CPA who specializes in taxes so you partner with an estate lawyer. Maybe you're a roofer so you must partner with a masonry guy. Everyone has their specialty. Maybe you refer work back and forth. Or maybe you do the work together as a team. Maybe you decide someday to actually go into business together. You pool your resources and your talent and together you can offer more.
And you will need people working for you. Just like I learned years ago. This is not easy. You'll have to stop providing the services yourself and rely on others to do it for you. At first you will hate this. You will think that no one can do as good a job as you. You will have a difficult time letting go. You will want to always be "busy" and to you being "busy" meant doing the actual work. But gradually you will learn that it's more important to keep other people busy while you find more work. When something needs to be done you will eventually stop thinking to yourself "how will I do this" and instead start thinking "who will I get to do this for me." Your clients, at first, will resist. They will want you because they love you. But they'll get used to it. You'll figure out how to transition them. And as new clients come on board this problem will eventually go away. At some point you'll admit that the people you've hired to provide services are actually doing a better job than you. And that they're smarter than you too. Hiring people smarter than you is how you will make money. They are good at what they do. And you will be good at finding them more stuff to do so clients will pay you for their services.
So go ahead. Quit your job. Be your own boss. You may make a comfortable living. But if you really, really want to succeed and make some real money you'll find that you won't be able to do this by yourself.
A version of this column previously appeared on Entrepreneur.com.