Do you have what it takes to be a sole trader?
By Adam Blanch
So you're sick and tired of working for the man and you're thinking you might go it alone. Fair enough, being your own boss has some real benefits to it. Whatever you make is all yours, you can enjoy greater flexibility, you take holidays when you want and no one is telling you what to do, right?
If only! I'm trying to be helpful here, so let's not sugar coat this - a sole trader works for their customers, and if you think your boss is demanding wait until you meet 'Jill Public'. There are hundreds like you, and she knows it, so she can demand just about anything. Most sole traders work far longer and harder than most employees, and often for not much pay.
When you go it alone, you may feel you're on call 24/7 - gone are the days when the 'big boss' was ultimately responsible. You are the big boss! That means you may start to feel that if you miss that call or ignore that email, you're losing a potential sale (the equivalent of money in your own pocket).
So for many people, being a sole trader is just like being in a job, except the boss is a total slave driver, they never get sick days, they work huge amounts of unpaid overtime and they never see their families. Particularly in the start-up phase before things get into a routine.
According the Australian Bureau of Statistics, survival rates are also lower for businesses employing between one and four staff (67 per cent) compared to larger employment ranges of five to 19 staff (74 per cent survival rate). So even the odds are stacked against you!
So why would anyone do this?
Successful sole traders have their eyes firmly fixed on the future. They are willing to work hard now because if they do it right they can create a future that is generally not available to employees. With time and dedication, a sole trader may be able to build their business to the point where they can take good holidays, they are earning more than average and they do get to enjoy a more prosperous lifestyle.
But it takes time and good business skills. A successful sole trader needs to learn how to grow and manage their business so that everything isn't dependent on them. They need to find, train and organise the right people. They need to be disciplined, plan well, keep their mind on the future and stay on top of things. They need to be good salespeople and people managers.
Keep in mind that many successful sole traders have solid support - perhaps a partner helps out with the administration and marketing while they focus on operations. Not a sole trader at all, but a team effort.
It's true that being a sole trader can lead to the freedom and prosperity you desire, but it will take longer than you thought and it breaks many people who try it. Still interested? If you know what you're in for and still feel passionate about going solo, then it sounds like you've got what it takes.