A lot of people dream of owning their own business, and as a young man I was no different. However, the reality of a weekly rent payment meant my entrepreneurial spirit was put on temporary hold while I followed in the footsteps of my father, earning a trade and a wage to pay for life’s necessities.
I was and still am an exceptional electrician, although these days my main tool is an iPad. A working day generally consists of meetings, time spent on the phone or sending emails. A far cry from striping and fishing cables on a building site, which was my preparation for owning my own business.
This brings me to how everything I learnt in my career to that point was pretty much useless to me on the day I burnt my bridges and told my boss what I thought. Filled with confidence, my own business card and a few jobs from friends who were aware of the impending gap in my work schedule, I planned my future.
It was simple. I would be charging £10 per hour and would work 40 hours per week (fewer hours than my job demanded). I worked out I would earn at least 30% more than my job paid. I also had plans to grow and bring on an electrician’s mate. His time would be billed to my customer, with a mark-up I would be making on every hour he worked without my lifting a finger.
I had the money spent before it was earned; a Ford Capri and a new TV were almost on order until about 5 weeks in. It was at this point that for the first time in about 12 years of working life I had nowhere to be that day. I told myself this is ok; this is one of the reasons (more time to myself) that I was in this “be my own boss game.”
The problem was that this soon became a bit of an unwelcome pattern, and work from friends quickly dries up. Also, some of the people who did want work done were “mates’ rates,” something a landlord no matter how friendly is never open to.
Then it dawned on me, I was no longer just a local electrician in Sunderland and hadn’t been for some weeks. I was the sales, marketing, HR, admin and compliance manager.
Businesses must make sales to survive—it’s a simple fact that has not and will not change. But I knew that… I had calculated my sales from day one. £10 per hour 40 hours per week = £400 per week in sales…
What they don’t tell you.
What I did not realize until that moment was that the actual most important thing in business are leads and, more importantly, a reliable method of generating them. Without generating leads there is no one to sell to.
It’s an oversight I made back then and I still witness today.
I continue to lose at least one good member of staff per year to urges of self-employed freedom. It seems everyone wants to become a self-employed entrepreneur and for millennials immersed in a world of social media wealth-flaunting, it looks more attractive than ever.
I truly admire anyone that sets off down the path of turning a trade into a business. After all, small businesses are often referred to as the backbone of America, accounting for 55% of all jobs according to the SBA. Going into business is also the logical and correct step for many, if they have done their research and have their eyes wide open about what the early days in business are:
- More money going out than coming in
- Longer hours than working a job
- Taking work home
- Doing the job of many people in various roles
- Loneliness and isolation
This might sound all too much of a struggle for some; however, the rewards are there for the educated and determined. My advice to anyone thinking of setting up in business is to fully understand and test how you will generate leads. Make sure any sales forecasts you put together are based on closing ratios of proven lead generation methods.
Whatever business you are planning, no matter how good your product is or how skilled you are, there will be challenges. But with a solid strategy for generating leads and sales you will have the cashflow to work through them.
Author: Brenden Carr is the owner of Caztec Group. He has built his business from a local electrician to a specialist nationwide contractor in the rail industry, working on projects such as the London Underground. The local business is now operated by his two sons while Brenden invests his time and money in trades related to local start-up businesses. Follow @caztecgroupltd on Twitter.