Self-employment is the act of generating one’s income directly from customers, clients or other organizations as opposed to being an employee of a business.
Self-employed people generally set up a new business or acquire an existing business, rather than being provided with a job by an employer, thereby earning monthly wages.
Being self-employed is challenging, in a developing country like Nigeria where there is no regular supply of power, water and other public utilities required for a conducive environment for starting new businesses on a small scale or large scale.
This is why majority of people would prefer working for an employer whether a sole proprietor, private company or public company or in the civil service.
The financial security or regular salary is often a guaranty as long as the employer is active and the enterprise is lucrative.
The conveniences of regular income, fringe benefits, leave or vacation allowances and pension make many people to shy away from self-employment and in most cases they end up either fulfilled or unfulfilled when they retire.
The mistake most employees make is they don’t actually plan before they retire, they start planning after retirement and end up encountering difficulties in running businesses they don’t actually have idea of or going into business without taken into consideration the risks attached to the business they have ventured into.
However, the fear of poor or irregular salary or losing a job can be a motivating factor sometimes to set up a business in order to be self-employed. While some set up business to fulfill the dreams of being their own boss.
When a person takes up the challenge of being self-employed, he or she should consider the advantages and disadvantages inherit in the decision. Because, working at the pros and cons will go a long way to help overcome the trials and go ahead to succeed.
Factors to consider before embarking on Self-employment
Once you have decided on the business venture you intend to embark on or invest in, you should take the following steps.
➢ Carryout Feasibility Study: a small business plan with your venture capital will do.
This will show the profitability of your business. You can prepare the business plan yourself if you have a quite good knowledge of Business Management, Administration, Marketing and Accounting or pay experts to do it for you at an affordable fee.
Now it is easy to obtain a soft copy of Microsoft excel template of a business plan on many websites for free like www.startuploans.co.uk.
Although some of the templates may be for a large business outfits but one can modify and tailor it to his own business of a small size.
➢ Possession of some capital to start and run the business. One should try to leverage on the ongoing Federal Government’s interventions to get access to funds to start business with or expand his existing business.
A rational person should not flippantly expect that government’s loan facilities are non-refundable or mistaken it as his share of national cake, therefore he is not going to make effort to settle the debt as at and when due.
It won’t be hard for the government officials to trace you for the recovery of the loans.
➢ Register a business name for your enterprise with this agency, Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). The registration is free of charge and it will give you more advantage to get access to government’s assistance and loan facilities.
➢ Study about taxes and do not fail to pay your tax as at and when due. This is necessary when you are planning to establish an incorporated business as it is a statutory duty of incorporated businesses to pay taxes.
➢ Start on a small scale with the capital you have. Do not go into borrowing from banks at the beginning. Payments of interests and other charges may stumble your business.
➢ Carryout market research to identify and know the potential customers of your products.
➢ Ensure better packaging: do brand your products and package them very well. You should try and package them differently from what is already in vogue. This will help you to have a share and penetrate the market.
➢ Recognize your talent, recognize what you can do and stand out from others. Make efforts to improve the quality of your products to meet up customers’ needs and tastes and at the same time minimize costs to earn profit margins.
➢ Identify and recognize your potential customers like schools, general public, children and so on.
➢ Make consultations or seek expert advice on new business
➢ Go for training on new business you have no idea of.
Operation of the new business
For you to succeed in your self-employed ventures, you must obey or adhere to the following operations to enable you succeed.
➢ Watch out for sources of raw materials or places to purchase materials at cheaper rates. Avoid intermediaries or agents.
➢ Keep accurate records of transactions for example inventories, income, expenses and profit.
➢ Separate your business capital from your profit. This will help you to determine what to spend freely.
➢ Strict monitoring of the business whether you are there or not. Never trust any staff.
➢ Do business differently from the usual way. Try to do business different from the usual way to attract attention (branding) or (packaging).
➢ Customers are always right. Try to be friendly with customers or treat them very well.
➢ Maintain a business bank account like savings or current accounts to prevent uncontrollable spending.
➢ Avoid family relation engagement at the beginning of your business. You will find it difficult to enforce discipline or recover stolen funds.
➢ Reward/Discipline staff when necessary.
➢ Associate yourself with successful business men/women on the same field with you. You have a lot to gain from them.
➢ Show appreciation to your customers as this will always bring them back to buy your products
Sanusi is a Secondary School Teacher in BUA Cement Schools (Sokoto) where he teaches Economics to senior students with over ten (10) years of working experience in teaching.
He bagged his Bachelor’s degree in Economics/Education and Master’s degree in Banking and Finance all from Usmanu Danfodiyo University, Sokoto. He has some few publications to his name and he is currently pursuing a professional program in Accounting (ICAN).