For the majority of people, working as an employee is the norm. While that’s fine for as long as you remain an employee, it can be downright dangerous if you choose to leave the shelter of employment and stretch your wings as a freelancer, entrepreneur, or small business owner. When you leave your role as an employee, you also need to leave your employee mindset behind.
Why is the employee mindset so dangerous for those who are trying to build a business? Because it can trap you into doing things that are not in your best interests. If you are treating your clients as your bosses, you are more likely to take on tasks that you despise or even worse are unprofitable simply because you feel like that is what you are supposed to do. You also risk utilizing your precious time and resources to build a business for someone else rather than focusing on building your own business. Both are surefire ways to mediocrity and even failure.
Rather than working as an employee for your clients, you should take on a business owner mindset. You should be negotiating rates and terms. You should be actively seeking new clients (new business). You should place the advancement of your business at the forefront of your business strategy rather than working to advance someone else’s business.
Perhaps most importantly, you need to become comfortable with the idea that you control your own destiny. No one is going to direct you in how to best manage and grow your business. No one is going to hand out yearly raises (and honestly you should be able to do better than that for yourself). And no one is going to criticize you when you do something wrong (other than yourself hopefully).
Follow these 6 strategies to drop your employee mindset and start to think like a business owner.
- Employees Have Bosses, You Work for Your Business. – Unless you head into your own business right after finishing school (either high school or college),this can be the most difficult mindset to overcome. Many freelancers actually start their freelance business while they are still employed and as a result they take the directions and instructions or their clients the same way they would take instructions from their boss. This is dangerous on two levels. First of all, YOU are the expert in your field. Chances are very good that the majority of your clients do not understand what you do or simply cannot do what you do. That’s why they hire you. This means that, unlike a boss in a traditional job, they cannot offer you useful advice and guidance. Secondly, by treating your client as a boss, you are giving all your power away. This might not bite you now, but in future months it will in the form of lower pay rates, scope creep, unclear tasks, and a myriad of other client issues that can be easily avoided when you treat your business as a business, not a job where you are the sole employee.
- Employees Have One Boss, You Have Many Clients. – When starting out as a freelancer it can be difficult to wrap your head around this, mostly because you are too busy trying to please several clients (or bosses). You never say no, never negotiate, rarely consider your own needs, and pretty much do whatever they ask, the same as you would as an employee. When you are running a business, this has to change. You need to learn how to prioritize your own schedule over the clients schedule, you need to learn how to say no to some projects and you need to learn how to work as an equal with your clients, not as their employee. Once you can do this, life, and the growth of your business, becomes much easier. Once your clients understand that they need to work WITH YOU, you are able to schedule your tasks more appropriately and even make room for personal projects. Remember that unlike a boss at a company who will be responsible somewhat for your growth, when you are in business you are the only one responsible for your businesses growth. Your clients don’t know about your business intimately and rarely will they care if you are able to grow personally and professionally. That is all up to you.
- Employees Get Raises, Business Owners Set Rates. – When you are running your own business there are no annual performance evaluations and raises. YOU determine the worth of your services and YOU are responsible for charging accordingly. Too many freelancers undersell themselves because they are stuck in an employee mindset. They don’t know the true worth of their skills and are afraid to upset their new “bosses” by asking for a raise. You need to get away from this mindset. Determine how much your services are worth and then stick to that. If it means renegotiating with existing clients then so be it. You will soon find out the going rate for your work and you might be surprised to find that it is higher than you thought. And if a client isn’t willing to pay what you’re worth, don’t be afraid to walk away.
- Employees Need Training, You Are An Expert. – When you go to work as an employee you are provided training to show you exactly how a company wants the job you are performing done. This is not the case when you are in business for yourself. You should never ask a client for direction on how to accomplish a task. Clarification regarding instructions is one thing, but asking for direction is akin to telling the client that you don’t know what you’re doing. This is bad for business and bad for your reputation. Your client is paying you to do a job because they either don’t have the skills or the time to do it themselves. They hired you as an expert so don’t ever give them reason to question your abilities. Approach every contract with a can do attitude and the confidence that you are the best person for the job.
- Employees Get Paid for Their Time, You Get Paid for Your Services. – When working for a company as an employee you typically get paid by the hour. Guess what? When you know you are paid by the hour you rarely work as hard as you can. I remember a job I had at a steel manufacturer where one of the most common phrases on the floor was “It all pays the same”, meaning you got paid for 8 hours regardless of how much got done. As a business person you need to be better than that and you need to distance yourself from the pay by the hour mentality. You should always quote your rates by the project, not by the hour. This ensures that you are putting your best work forward each and every time. It also shows clients that you view your expertise as valuable, rather than viewing your time as valuable. In almost every case, you will get paid more for expertise than you will for time.
- Employees Follow a Path, You Create Your Own Road. – In almost every case, the reason for striking out on your own is to be able to create your own road to success. Otherwise, you might as well put your energy into becoming the perfect employee and climbing the corporate ladder as quickly as possible. With that being the case, don’t get stuck with the idea that you have to run your business the same as everyone (or anyone) else. It’s your business and you are free to do with it as you see fit. This means you can test new ideas, branch out into new areas, and create your own version of success. The only one you need to measure up to is yourself.
Are you still working with an employee mindset or have you broken the bonds of the corporate workplace? I would love to hear your story of how you are making the most from your business in a new and exciting way below.