Consider Creating Your Job Instead of Finding it
~ by Steve Throckmorton
At the risk of discouraging I feel obligated to mention that even after following all of the advice in earlier chapters you may discover that your job search is unproductive. In the end you may not get a job in your field and you may have to settle for a lot less money than you have earned in the past. So how do you overcome this? One way is to consider starting a business.
Starting a business can take two forms. One is to establish a corporation where you produce or resell a product or service. The second is to become an independent or 1099 employee of an existing company. Incorporation of a business can take a longer time to get off the ground than becoming a 1099 employee but it can also produce much greater rewards on the long run. Below are some of the pros and cons of both approaches.
If you decide to take the 1099 approach then you will be in solo mode, meaning working by yourself. You will not have the ability to bring on regular employees like a corporation does. You can hire contract employees but you will not have the tax structure needed to offer employee benefits. The primary drawback to the 1099 approach is that it limits your ability to multiply and expand your business. The primary benefit of this approach is that it is simple. Your legal fees will be low and overall startup costs will also be low. Your overhead and financial risks will also be low so you will keep a higher percentage of what you earn. You should always contact an attorney to get legal advice even with the 1099 approach. Also look into professional insurance coverage to protect your assets from legal action.
Establishing a corporation requires a lot more paperwork, legal fees and complications. The overall startup costs will be higher and it will take longer to establish a corporation than a 1099. Your corporation will have the ability to hire regular employees but you will be responsible for hiring, firing, managing, paying salaries and benefits to those employees. It will often take many years to grow a corporation to the place where the income you net will exceed what you would have made as a 1099. It is not unusual for corporate owners to make less money than their key employees. You may ask why they do that. It is because they are looking to the future when the corporation hopefully grows larger and earns them far more income than they could have as an individual contributor. The corporation can also be handed off to someone else to run in later years or sold to produce a substantial retirement income.
Once you decide on the structure of your corporation it will be time to do the most important thing. It is the thing that you must do regardless of structure. It is the acquisition of paying clients. Unless you can generate revenue nothing else matters because your business will not endure.
In the next post we will cover practical tips on how to choose a business and how to market your business.