There’s been a noticeable increase in the number of people offering their services as fractional chief sustainability officers or independent sustainability consultants recently. Some of them are increasing their earnings, some are healing from burnout and some are reclaiming control over various dimensions of their lives. I can relate to these motivations; I started my own business seven years ago.
The pros and cons vary considerably from person to person. Starting your own business is a much less risky proposition if you’re lucky enough to have a strong financial safety net, clients who are willing to follow you anywhere and a supportive professional network. While striking out on your own is a nuanced, personal decision, there are several things anyone considering this path should think through carefully. Here are the top seven questions that I ask my clients to help them determine if starting a business is right for them.
What services are you going to offer and to whom?
Believe it or not, “I don’t know” isn’t necessarily the wrong answer here. It’s incredibly common for solo consultants to discover the work that they can get paid for and the work that they originally thought they’d be doing are very different.
Most successful solopreneurs typically fall into one of two categories: well-known industry leaders with strong personal brands and a reputation for excellence in their niche, or highly skilled experts with deep knowledge in a specific area of solutions, but little to no personal brand visibility.
Industry leaders are more likely to have opportunities come to them, so thinking through what they plan to offer serves more as a guideline for how to decide which opportunities to accept. Lesser-known experts need to market and pitch their services more directly, so having a clearer sense of their offerings is more important to their business development strategy.
Regardless of which category you fall into, keep in mind that you will be refining your offerings over time as you learn more about who your ideal client is, what they need, what they’re willing to pay for and what engagements are a good fit for you.
What are your business goals and can your financial situation support a period of unpredictability?
Not everyone becomes a solopreneur to increase their earnings. In fact, quite a few people willingly take pay cuts because the flexibility, control and other lifestyle benefits are worth it to them, so it’s important to be clear about your financial objectives. Cash flow can fluctuate drastically at small businesses, especially at the start. It can take longer than you expect to land your first contract, you may not secure as many clients as you had hoped and your clients may not be willing to pay as much as you had planned.
Evaluate your personal financial situation and determine if you have the savings, family support or external funding you need to remain solvent as you build your business. Defining financial success for your business in advance will help keep you honest if you come to a moment where you need to decide if you should keep going or return to working for someone else.
Can your network support your business strategy?
A strong network is a critical ingredient for a successful solopreneurship. Your friends and colleagues may be potential clients or, more likely, be leads for introductions and referrals to potential clients. You may also be asked by people in your network to provide services for free or reduced cost. If those people are important to you, it can be hard to say no. Be prepared for changes in the dynamics of your relationships and navigate them carefully to keep them intact.
Your network is also an important source of support. If you decide to take on a project that requires more help or specific expertise, it can help you connect with quality partners.
Strong networks also require upkeep, which means attending conferences, lunch meetups, posting on social media and check-in calls. Consider if you’re willing to put in the time, money and effort required to keep your network healthy and growing.
How will this impact benefits such as health insurance and retirement plans?
It’s easier and cheaper to be a solopreneur if your partner has an employer that offers health care benefits. Losing affordable access to quality health insurance is a top concern I hear about from would-be-solopreneurs. However, one underappreciated upside of running your own business is that you will gain the ability to select your own retirement plan.
How significant that upside is will depend on your earnings and the generosity of the plan offered by your current employer. High earners may benefit from options such as one-participant 401(k)s or Simplified Employee Pensions (SEP) IRAs which can potentially increase your total retirement contributions to $69,000 per year, or more if you’re over 50.
Invest the time to evaluate the health care and retirement options that would be available to you as a business owner and understand how they might impact your financial goals.
How will you handle the administrative work?
For many solopreneurs, their core services are what they enjoy doing most. However, it’s important to remember that there’s less enjoyable administrative support work that needs to be done too.
You may have become accustomed to relying on internal partners for designing visually appealing reports, writing social media posts or getting feedback on your work. There are also new tasks required to run your own company like accounting, tax preparation, legal review and website development.
It may make sense for you to do some things yourself while your business is just getting started and then outsource as you grow. Ask yourself which of the administrative tasks you’re willing to take on and which you plan to pay another professional to do for you.
Are you emotionally prepared to handle the transition?
Starting your own business will likely be an emotional rollercoaster. It’s empowering to build a brand that represents who you are and how you want to show up in the world. But at various points along the way you’ll have to handle rejection, decision fatigue and impostor syndrome. You may also find yourself mourning the loss of your old identity, especially if you held an impressive title or worked for a well-known organization. Transitioning from a schedule of back-to-back meetings to more independent work might be a welcome reprieve, or it might feel a bit lonely.
Thinking about which aspects of the transition may be easier or harder for you can help you to come up with strategies for predicting and managing the low points more effectively.
Is now the right time?
Some might argue that now is not a great time to start a business offering sustainability related service because of headwinds facing the sustainability community, key regulations shifting and economic uncertainty. However, others might counter that increased scrutiny and reduced resources create ideal conditions for innovative, experienced leaders to offer their valuable support for strategic work at a fraction of the cost of a full-time CSO or in-house expert.
Ultimately, whether solopreneurship is the right choice for you is a deeply personal decision. While there are some challenges you should be prepared to navigate, it may be the opportunity you’ve been waiting for to rebalance how and where you invest your time, money and energy.
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