t: 0141 556 5348
e: mail@ngmaccountants.com

Business Matters

Ravens and Writing Desks

For those of you who have a great memory, I won't need to tell you the source of the inspiration for todays title. For those whose memory could be better, it comes from Alice's Adventures in Wonderland, during the tea party and in order to make conversation, the Hatter asks, "Why is a raven like a writing desk?"

madhatter

It is a riddle without an answer, so don't puzzle over it too long.

A similar question is "Why do people become self employed?". In the same way that people have attempted to answer the raven riddle, more have attempted to answer the self employment riddle.

I'm talking here about self employment in its widest context - including one person limited companies. The most often cited reasons for self employment are:

  • Gaining control of one's life
  • More security
  • Having more free time
  • Doing the job I like

These apparent benefits do not exist at the level of activity that most budding small business owners operate, no more than a raven is like a writing desk.

Assuming that the new self employed business is successful, and for many people that means providing a living for the owner - often that is its only objective, problems soon rear their ugly head.

Problems such as: too many customers driving too many hours of work; tackling all of the other tasks that businesses need to tackle such as managing the money, preparing for tax bills, keeping track of the accounts, getting paid. These are just a few of the more common gripes and all of which fly in the face of the 4th reason for becoming self employed.

The business begins to control its owner and if the new self employed person recognises this he or she simply starts turning down extra work. If one of their points of difference cited in their business plan at start up was (and I quote) " I will get business ahead of my competitors because I will be cheaper", then they may consider raising their prices but many don't. So more free time is often - in the medium term - an objective that is never achieved. Reason 3 bites the dust.

And nothing is secure these days. Employment or self employment - neither is secure - whether you consider job security as a job for life like the Civil Service or one that you can't be sacked from or one where you have guaranteed income every month. And if you're looking for security why would you ever start in business for yourself? It is even less secure, less predictable and harder work than any job you would ever do working for someone else. Reason 2 gone.

There are two kinds of self employed businesses - ones that provide a great service and the rest. The rest may survive but not for long in my experience: customers are choosy and want to get what they pay for and often much more than they pay for. They read reviews, ask others, search online, no longer rely only on recommendations from friends, get dissatisfied quicker, are more likely to change supplier because of price regardless of service levels and loyalty to the past. The world has changed self employment and so for the new small business owner to simply survive they must become obsessed by the business. The business gradually takes priority. You start working Saturdays to catch up, doing your admin at home, taking less holidays than before because no one is there to handle the customers. Sounds like the business is in control of you and your first reason for starting up is blown away.

This is not new thinking and certainly not mine. This is observed experience and real and so the puzzle for me is (despite being presented with the reality upfront) why many people still believe that they should expect to achieve the perceived benefits of being self employed when they are not prepared to put the right frameworks in place. Maybe the fact that there is no alternative for them means that they must underplay the downsides and focus on the traditional and cultural reasons for becoming self employed even if the reality is demonstrably different.

Some puzzles do not have an answer and I don't have any way of explaining the self employment riddle. Why people do what they do is a mystery and often inexplicable especially when there is a solution: business coaching can solve all of the problems attached to self employment. The trouble is that people hang on to the unachievable goals they expect from self employment and believe that they don't want to change (grow away) from the (literal) sole trader/ sole director style of business because they think that theirs is the only way to achieve their goals.

In fact, the only way to achieve the self employment goals is to grow the business bigger. Completely counter intuitive to what you might expect.

But then the whole of Alice's world was counter intuitive and sometimes the only reality is the unreal or maybe that should be surreal. Really!

JohnF

Comments: 0 (Add)

Your name:
Message:
Enter : [?]