… In which we consider what job we are going to give ourselves, why we shouldn’t give ourselves a job we are likely to get bored with, and discover what motivates people to choose us.

THE SELECTION PROCESS

The next question we need to ask is, what job are you actually giving yourself? There is a whole industry built around the so-called science of personnel selection – in other words, getting the right person for the right job. Inside big companies, a huge amount of time and money is swallowed up by the human resources department, which I find strange as they never seem very human or very resourceful. These people also spend even more money on external resources such as psychometric testing and recruitment consultants. I think it is mostly mumbo jumbo and cant but there must be a tiny grain of reality in what they are trying to do. Jobs are currently hard to find so when a reasonable one comes along there will be a queue of eager people wanting to do it.

The first step is to send in a CV or a résumé. Something in that causes a great number of applicants to be rejected. What was it that HR saw? A lot of people get their CV or résumé professionally written by people who know what they are doing, but still get rejected at that first hurdle. Why is that? Too old, too young, some sort of prejudice against them, underqualified, overqualified, too many previous jobs, too few previous jobs? While HR people are not my favourite folk, previous experience must have told them something. If they are considering employing someone, there will be certain circumstances and disqualifying factors that will lead them to not choose certain applicants. These could be anything from experience, ability and, even though it is illegal, they may also privately take into account ethnicity, disability and age. I am sure they would deny this, but the point I am trying to make is that in self-employment we will be providing our own job regardless of any factor that may restrict our ability to do that job. We are going to give the job to ourselves that we have created for ourselves, but we must also be fully aware of the consequences of giving ourselves a job that may be perceived as inappropriate to our skills and personality by an outside judge. It is also worth bearing in mind that an HR department will recruit as to need, vacancies, and the number of people required. Again, the self-employed tend to give themselves a job even when there isn’t a vacancy and the quantity of work goes to the person with the sharpest elbows.

A Qualified Decision

The job that you have planned for yourself in the self-employment world is one that I am sure you will give to yourself, but in the mind of that HR person what is the consequence of giving the job to the wrong person? Say you are one of the lucky few who gets a job interview, during which you are told the classic cliché that you are ‘overqualified’. What on earth does that mean, how can anybody be overqualified? Surely, it would be good to employ someone overqualified; they could do the job standing on their head. Just for a moment put yourself into the mind of that HR person and try and argue their case for a minute. Have a think and imagine you are in HR and tell me as many reasons as you can why you shouldn’t employ someone you consider to be overqualified. I can imagine that they may become bored if their mind is not fully occupied and challenged, but so what, most people are bored with proper jobs or they wouldn’t be reading books like this. The trouble with bored people is that they either stay and become disruptive, they try to expand the job into uncharted and dangerous waters, or they up and leave.

The Coffee Rickshaw

Now let’s have a bit of a think about the job you are going to give yourself and how it fits your CV. You may be tired of the frantic rat race that is city derivatives trading, sick of the challenges of brain surgery, or the cut and thrust of defence at the High Court. What you crave is a little peace of mind, perhaps a peddle rickshaw that pulls a real coffee machine out there in the dappled sunlight that streams through the trees, enjoying good fresh air and exercise as you peddle through the mellow streets dispensing REAL coffee to all who want it. Can I just pop that bubble a bit by suggesting you could be a teeny weeny bit overqualified for this one. When it is pissing with rain and you are peddling this cursed contraption up some bleak hill, will you remember your nice warm office, the company car and the free lunches?

The problem is that, although I just conjured this idea out of my head, enterprises such as this actually do quite well; nice and simple, a good cup of real coffee brought to you. What happens is that over time you build up a loyal following of people who will wait for your arrival come rain or sunshine. It will build up to a nice little earner, a few yummy extras can be added like the odd cookie or doughnut, but that is about it. How long are you going to keep that up? Let’s imagine that ‘Coffee by Rickshaw’ earns enough to provide what even you may describe as a very good standard of living. Will you be pedalling for two years, ten years, twenty years, or even forty? Oh, ten, is it? For ten long years you pedal this thing – and then what? You sell it? You set fire to it? You expand and buy fifty of the things and become a rickshaw baron? You realize that you have a formula for a nice gentle money spinning idea and franchise it?

I am not saying that a manual job is undesirable – actually fixing things like cars or washing machines, or making things like dresses or houses is surprisingly mentally challenging and also very stimulating. All I am saying is go into this thing with your eyes wide open and understand exactly what job you are giving yourself. It is going to be no use whatsoever if you are going to get bored and disruptive or feel trapped by the conflict between a steady income stream and turgid repetitive work. That is, after all, what you are trying to get away from … it is called having a job!

SEE THE TROUBLE COMING

The solution to these problems is preparation, which is the last thing most self-employed people indulge in. People accuse me (with some justification, to be fair) of being a pessimist, but in my defence I would say I was an adventurous (or foolhardy) pessimist. Would I, for the right money or incentive, sail a yacht across the Atlantic single handed? For me, that would be a terrifying and lonely business and to get me to do it the rewards would have to be huge. The questions to ask before setting out are, how dangerous is this? How many people have failed before? What were the consequences? The answers, in that order are, very, loads, and some were never seen again! The other side of that coin is that loads of people have succeeded. If we examine the successes and the failures, a large batch of both could put their fate down to sheer luck. Good or bad, I am eager for this book to remove luck as a necessary element of our enterprise. The ones who arrive despite being incompetent sailors in leaky ill-equipped boats are just playing a damp sort of Russian roulette, and the apparently well sorted ones who sink through ‘bad luck’ usually have some feature of what they did that contributed to their demise. Maybe they were experienced, perhaps the boat was state of the art, but because they were pushing hard everything was under too much strain. My choice – and remember this is my choice, for you will have your own choices to make which is the fun and joy of self determination – would be to have a very well prepared boat, sailed well within my and its capability. I would be well versed in the dangers and obstacles before I set off, my arrival would be inevitable – timings and route may change, but I would get there. Let’s apply that inevitability to our enterprise.

Did You Think It Through?

Sorry about this, but I’m going to get back to the coffee shop again. I’m not suggesting that you should consider a coffee shop but it is iconic of the mindset of the ill-considered enterprise. Dressmaking, taxi driving, teaching piano, servicing cars, mending washing machines, window cleaning, nuclear physics, management training or whatever, the rules are the same for this exercise so for now it’s coffee shop. You must travel with me into the mind of our subject, a senior purchasing manager for an industrial conglomerate. The thunderbolt of redundancy strikes, leaving a lump sum and no gainful employment “Hey, let’s open a coffee shop.” Why? What was the logic behind that? Is there a vacancy? Does he realize what job he is about to give himself? Consider this, whatever enterprise you choose will require you to do work – that work is the job that you will be giving yourself. The choice of enterprise will be irrevocably linked to the type of effort you will have to expend during your working day. Remember, in the old world of wage slavery we would not be offered our shackles until a previous rower had failed and been thrown over the side. There was no job until there was a vacancy, and once we had been through the interview process to determine whether we were under- or overqualified, we might have been offered the vacant job. At that point, there would be an empty chair to fill and we wouldn’t have to fight for it. Because we are not used to fighting for our work, I suppose that is why we might turn a blind eye to the competition when choosing our enterprise, but also remember this paradox: if no one is doing it, it’s probably a bad idea; if it is a good idea, probably loads of people are already doing it. Worse than this in the case of coffee shops, loads of people are doing it and I am still not convinced that it is a good idea.

The Secret of Their Success

You are determined to open a coffee shop so let’s make it work. First, visit a minimum of ten competitors; chat up the staff or the owner or anyone who will talk. Try not to tell them your plans; we need a bit of sneaky here. Are they making money? What makes them the most money? Do they feel their position (geographical) is affecting their business? What sort of cup or mugs do they use, what food offering do they have? Don’t just visit them once but also on weekends, midweek, wet days, sunny days, evening and morning. Do the sums, watch the customers and notice how long they are staying and how much they spend. For instance, the coffee shop is packed (hoorah), and that’s about thirty people for the peak three hours of the day. For the rest of the day they average around ten customers. A cup of coffee gives a gross profit of £1.00 so that is £90 earned in the peak and £50 for the rest of the day – so £140 per day. Well, busy or not, that won’t pay the rent. You could make more driving a bus. Remember, if you have a proper job you will be paid a wage. Because of this, employed people lose the connection between the money they receive and the job that they do. For the self-employed, the choice of enterprise and the profit it makes relate exactly to the money we take home. In other words, the profit is our wage – no profit, no wage.

OK, in your research group you find some little gold mines. What makes them special? Is it the food, is it the position, or the quality of what they offer? Dress up in your market research outfit again and interview their customers. So, you have found the good ones; how are you going to push them to one side and how will you take away their customers? Why will people choose you?

Judge by Appearance

It always astonishes me when I walk into any enterprise where the people involved cannot see that their appearance and behaviour affect their financial performance.

I bet this is a familiar scene. You walk into a tatty shop in a secondary shopping area to see a damp nosed girl with a cardigan pulled over her hands, crouching over a portable gas heater and eating a pot noodle. Doomed! Inevitably doomed! It’s the same with twee names – a hairdresser called ‘Curl Up and Dye’ may survive but you would never see it in the West End of London or in Manhattan. What you are like and what you do will put certain limits on you. A good test is to be blindfolded and be led into a small, independent enterprise or a national (or even internationally) renowned one. When the blindfold is removed it will, without seeing any signage, be clear who the independent is. The deep fascination for me while researching this book is how people, individual people, achieve value. The big mistake individual self-employed people make is to feel that one of their few unique selling points is the ability to be cheap. Is that the way Beethoven thought? “Listen mate, ’cause it’s just me working alone I will knock you up a symphony cheap!” Does Warren Buffett give you a bit of cheap financial advice? Will Raymond Blanc do your daughter’s wedding food because it’s just him working alone? Actually, he would probably be delighted to do your daughter’s wedding personally if you are prepared to pay him a few hundred pounds per head. His reasons for charging such eye watering amounts? “Because I shall be working on this alone”, the very reason why you think it would be a good idea to be cheap. What’s your answer to this … because he’s famous? Then get famous. Because he is brilliant? Then get brilliant. Because he is famous for being brilliant? Then become so brilliant that you become famous.

You would not expect to be offered a job by walking into a prospective employer and saying, “Can I have the job, I’ll do it cheaper.” So why do so many people believe that it will work when we become self-employed? To clarify this, we have to see that our customers are our employers and they will give us our work based on the quality of our offer, not the price of it. When we go for a job, we go to our prospective employer dressed in our Sunday best and on our very best behaviour, in other words we try and sell ourselves to our employer. We should adopt exactly the same attitude whenever we come into contact with a prospective customer. Each and every contact is a job interview; tatty, bored, dishevelled and unprofessional, does not get us the job.