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Job vs. own business

By skainhifi ·
TechRepublic friends,

- I am 26.
- I have a full time public sector job.
- I am attending grad school.
- I have started my own Web development business on the side.

My public sector job is not challenging (and boring). The pay is average, but has good benefits. My own business is challenging and fun, but does not pay well (until I can put more time into it).

Do I quit my job and take a risk on my own business? Or continue with my current job until my business can pay the bills?

Losing my health, life, etc. benefits at the public sector job is a big negative of quitting. I feel like if I don't get out of the public sector soon, I'll be stuck in slow-moving boredom forever.

skainhifi

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Networking

by REConsultant In reply to It can work.

I've done it with a lot of skin in the game personally. Two young children and stay at home wife. I think the key to success is how well you network or meet people in the public space. As a former CIO I failed to leverage my position outside my former organization. Give yourself a good 6-12 months to start or learn how to network. If you find the concept of networking or selling your self distasteful look to improve your present situation either with a new position or a positon in a new organization.
Good Luck!

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Added Points to consider

by Dilbert-Tom In reply to Job vs. own business

I've been kind of 'forced' into Consulting/Contracting because after I turned 40, I was laid off - and not a lot of places want to hire older worker(s)... But they will engage Contractors without (older) age being a negative.

When the market 'slows', I find that it may be quite difficult to find an engagement where I live - currently am working 300 miles from home...

Mobility can bring prosperity and security.

Also, although you can indeed go out on your own - some clients are reluctant to deal with 1099 workers and prefer to work through Companies that will pay Contractors (some of these will work with 1099, and some are reluctant to and prefer to pay W2 compensation). Easiest to be flexible about this by incorporating (so 'be' the 'other' Company - pay yourself W2 comp, yet set up your own benefits as well though your Company.). And remember that 1099 earnings will need to be AT LEAST 30% higher than W2 to be comparable (as suggested by others here, try to allow 1099 rate to be 150%-200% of W2 rate - to provide for expenses as well [eg; Don't just pay yourself all of it, but let your Company cover your expenses, perhaps your leased Car, etc.).
The best part of this kind of work is in fact the varied experience you will obtain. Remember always that while money is nice - you are working for the References. References can get you work that is being competed for by others without such good (or current) references.
Suggestion: even if client does not require it - keep weekly status reports for yourself (they are very helpful when updating resume).
Also - keep continous Health coverage (I was diagnosed with Diabetes between (W2) contracts, fortunately I was paying for COBRA coverage - from Public sector you may be able to use this for coverage for at least your first year to keep your benefits.
Also, save enough to last up to 3-6 moths between contracts, you won't need it often - but if you do it's real nice to have the savings.
Don't forget retirement savings, starting in your 20's you only need a few thousand per year to have enough - starting when you're over 40 requires unrealistic contributions...

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Attitude

by AJayVee In reply to Added Points to consider

If you think you're old, you are! I'm 49 and have been a diabetic for 30 years. Neither of those issues have come up for any position, either as a W2, 1099 or as a company. And I'm looking forward to another 30 years becaus I love what I do.

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Go For it!

by Hescominsoon In reply to Job vs. own business

I have been doing computer consulting for years on the side. I finally decided to take the chance and go for it. I have fully incorporated my business and am now getting it off the ground. You are almost 10 years younger than i am..you are in the perfect time to try this. You will never know if it will work if you don't take the risk. My only regret? Not starting my computer consultancy when i first thought of it 10 years ago.

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Doing it on your own

by sysdev In reply to Job vs. own business

I have been independant for a long time, and my income hit six figures in 1989, so my answers are based upon a great deal of experience. I first entered Data Processing in 1965, became a consultant (working for a consulting firm) in 1976, and went independant in 1980. Here are some absolutes:
1) If you do not have the skills, do not do it.
2) If you do not have a desire to do whatever it takes, do not do it.
3) If you do not have sufficient funds to exist with zero income for at least 6 months (longer if you have a family) do not do it.
4) If you might have trouple with people saying NO to you 90% of the time, do not do it.
5) If your skillset is very common, do not do it.
6) My 15 year old son is self taught and builds web pages for money wile he is still in high school. If you do not have that drive, do not do it.
7) If your family is negative about it and that bothers you, do not do it.
If you have any trouble dealing with rejection, do not do it.
9) You indicated that you build web pages on the side. If you cannot build them better and faster and bulletproof better than the comercial web page building programs, do not do it.
10) If you only have one skill, do not do it.

All that being said, if you can really be comfortable even with the objections in those ten points (there are others, but those ten are usually enough to stop people dead in their tracks), then understand that owning your own business is virtually the only way to become wealthy. Plan it in detail with many options, have an attorney and an accountant. Wait until you are earning a sufficient income with it. Then do it. Understand that the vast majority of people who try it fail.

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One More Point!!!!!

by PMPsicle In reply to Doing it on your own

Lot of good points in that one ... got one more just because sysdev@ameritech.net only said it three times and it bears repeating ....

Take your regular jobs salary, divide by 1000. If you can't get that per hour as a contractor ... don't go into that business. One of the problems in being in business for yourself is that you need to ensure that your business can sustain itself.

Unfortunately, IS/IT is bombarded currently by people who THINK they can do the job. It's like the medical field in the late 1800s. Everybody thinks they can do it without training. And if everyone can do it ... why pay well for it?

So be careful, that $25/hr you get for web development on the side might seem like BIG bucks .... but at the end of the year $25,000 when you were earning $50,000 isn't such a great thing.


Glen Ford, PMP
Can Da Software
IS Project Management
Business Systems & Process Improvement

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Do Both for Now

by palisadesp In reply to Job vs. own business

My suggestion is to build the other business to collect savings of 3-6 months. While collecting the savings explore the other areas where your web development skills will be in demand. Diversify your web development offerings to ensure run rate business while seeking large contract engagements. Health Benefits can be obtained for a small business, some states require a minimum of two employees to have an enforced policy. Keep do both jobs until your cash based and revenue resources are somewhat consistently flowing. Once you can afford to cover your expenses plus three month salary at the minimum, you are on your way.

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Great Question!

by qhcomputingny In reply to Job vs. own business

This is a great question. Don't listen to the negative people in here. You have to try it for yourself. If worse comes to worse just go and find another job in IT. You have to try it. I did it last year for about 8 months, and then realized I liked my benefits. My fiancee is still in school and once she comes out and gets her practice started I can get her benefits. Then I will go out on my own. You have to find out for yourself what you need and want. But my advice would be to just try it first for yourself, then you'll really find out.

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How are U paying for Grad School?

by dxbrewe In reply to Job vs. own business

o You are young, get out of public sector early
o What does grad school mean to you and how are you paying for it? If your employer is putting the money, finish up school first.
o One last thing, get out early, early. You have age to your advantage.

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You Can Do It but Work for Yourself

by millsjl In reply to Job vs. own business

Who do you work for if for every $100 you pay out $98? Who do you work for if for every $100 you pay out $25? The first example you are employed by others (utilities, insurance, bank interest, landlords, etc); the latter example you work for yourself (retirement, seminars, training, etc).

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