In order to succeed as a solopreneur, there are a number of things you need to be able to do. Unlike a company of say, 50 employees, that has a separate manager for every different aspect of the business, you have to do it all yourself.
Now, you don’t have to necessarily become an expert in all of these things, but you do have to develop a certain comfort level with them.
So, just what are these six things? Let’s find out!
1. Accounting
You don’t need to become an accountant, but you do need to know enough about keeping appropriate records. Those records need to be sufficient for you to do your taxes and to create monthly financial statements, if you do those (or for your accountant to do them).
Here are some examples of the things you need to know how to do.
- Predict cash flow;
- Track income;
- Create invoices that comply with accounting and legal requirements—yes, there are rules!
- Track expenses and know what you are allowed to deduct;
- If you have monthly financial statements, how to create them/understand what they mean;
- If you have any staff, the rules and laws regarding payroll;
- Analyze and determine ROI, profits, and profit margins;
- Organize invoices, bills, statements, receipts, payroll documents;
- Determine the amount of sales tax and GST to charge (and when to charge it);
- Set up a bookkeeping method (be able to set up a tracking spreadsheet, or have and know how to use an accounting software package);
- Manage inventory;
- Manage Accounts Receivable and Accounts Payable.
All this might sound intimidating at first, but the nice thing about accounting is that most of the work is in the setting up. Once your system is set up properly, a lot of the day-to-day stuff is rote.
2. Time Management
When it comes right down to it, how you spend your time is probably the biggest factor in your business success—or failure! The old adage, “time is money”, is bang on. That’s not only because your hourly wage is based on how efficient you are (the more hours you put into a project, the lower your hourly wage) but also because the more time you spend on work, the fewer hours you have to prospect for new clients.
But what’s all involved in time management? Here are some of the main aspects you need to master.
- Recognize what’s important and urgent. This all has to do with prioritization. You need to work on things that are both important and urgent. Only after those are done do you address other important things that are not urgent. So make it a habit to analyze your tasks on a weekly/daily basis, and decide what is both important and urgent for this week/today, and what is important, but not urgent. If you label your tasks in this way, it makes it easier to resist the temptation of distractions. For example, let’s say your important and urgent task for today is finishing your taxes. Then, an email comes in from a client about a project you are to start on next week. The email is important, but not urgent enough to have to deal with immediately. Ideally, you want to leave it for now (you probably shouldn’t have even been checking your email in the first place!). If you keep allowing distractions to disrupt you, your important and urgent work won’t get done in time.
- Know where you spend your time. A lot of clients I work with have trouble with this one. They spend hours and hours working, but don’t keep track of what they are working on. As a result, they don’t have a good handle on how long things actually take. But if you keep careful track of what you do during a week, at the end of the week you can look back over your list and see if you used your time in the most productive manner. Then you want to use that information to plan to do better next week!
- Touch things only once. If you read the same email more than once, you’ve read it too often. The same goes for bills, letters, reports, or any other task you can think of. Too often we look at a piece of paper, read it, then put it aside to address later. But when later comes, you have to read the paper again to refresh your memory. And that’s a waste of time. Why not handle the letter the first time you read it? Not only does this method save you time, it also reduces stress, as you have less items hanging over your head.
- Manage distractions. That means:
- Not checking your email/phone 20 times a day;
- Having a quiet place dedicated to work;
- Avoiding the temptation of wasting time on the web/social media;
- If you work from home, having the necessary conversations with your family members so they respect your work schedule;
- Learning to say “no”, or “not now”.
- Taking Action. Thinking things through is great, but at some point you have to take action. (Perfectionism can be a real enemy here!) So give things the time they truly need, but not more. I especially see this issue in those who are getting ready to become a solopreneur. They plan and plan and plan…..and their business doesn’t get off the ground for a year, or two, or even longer. I’m a big fan of the idea that your plan doesn’t have to be perfect to be started. In fact, starting sooner, even if it’s with a small pilot offer, means earning money sooner, and learning sooner (because there is often no better way to learn than through thoughtful trial and error). So get your business out there—try out your products/services, see how they work…and use the feedback to perfect them. A year of this will likely put you further ahead than another year of planning!
So those are items 1 and 2 on my list of the top things you need to get comfortable doing. I’ll finish this topic off next week when we’ll go over items 3-6.
See you then!
