Paycheck Envy: The Truth About Self-Employment

When I took a full-time job in 1995 after 17 years of being self-employed, I was absolutely giddy knowing that every two weeks, regardless of cash flow, I would be getting a paycheck.

Being gainfully employed was, for me, an 18-month busman's holiday. Eighteen months of not worrying about cash flow. Eighteen months of smiling every two weeks knowing that my checking account would feel the love of my being gainfully employed.

Paychecks are a beautiful thing. I want one. I really really want one. As much as I love what I do, as much as I love the freedom, as much as I love not getting sucked into the vortex of office politics, as much as I know it would not be a beach party on the inside, cash flow drama is causing me to think about the unthinkable. Fulltime employment.

For the past several months I have been living with paycheck envy.
Cash flow is the bane of my existence.The stress can be crushing and unrelentless. 24/7.
It's what I detest about being self-employed.

There are very few consultants and business owners who don't have to grapple with the cash flow issue. It's just that these nightmares are rarely shared in mixed company or on blogs. Instead they are comiserated with trusted friends over a glass of Four Buck Chuck.

People are much more willing to share their sexual exploits then to share what its really like to deal with checks that don't arrive on time, bills that can't be paid on time, and contracts that are ignored, simply because they can be.

To the uninitiated, and that would be anyone who has never been in business for themselves and had to rely on that income to live, cash flow is something that has to be managed, and if you don't manage it, then obviously you are a blooming idiot who has no business being in business.

If you want to read about cash flow planning there are plenty of pundits who will tell you how to do it successfully. But that's a little like reading an instruction manual on how to ride a bike and then thinking as soon as you get on the bike you can ride without falling off.

Bike riding doesn't work that way, and neither does cash flow planning.

Still the pundits are happy to share.

So if you want to learn about cash flow planning from the blogs, you'll get this:
From Kick Start Your Company

Never spend a penny more than the cash you have collected last week. It doesn’t matter how much you are planning to collect this week!

What will happen when you follow this rule? Let’s see:

Receivables will improve

Since you cannot pay more than what you have collected; only way to fulfill your payment obligations is to collect more. Here are few suggestions to collect more:

Some of the gems offered up include getting more receivables. Are you jokin' me? Trust me, when you are in business and you know your cash is low, you understand in your core that you need more business.

From Inner architect there is this advice for Surviving When Your Business is Low

A reduction in your income may impact many things, including how you perceive yourself, whether you are conscious of it or not. If you have prided yourself on financial success, your ability to feel good about yourself may be impacted as you battle a tough economy.

How to manage this challenge:

1. Remember that a successful life is not all about the money. Look for other non-monetary ways to define success.

* Are you helping people?

* Are you growing as an individual?

* What are you contributing to your community or to the world that does not involve money?

Feel better? I don't. A friend of mine who is no stranger to cash flow woes was telling me about one of her friends who had been banking on the Republican National Convention to make their year.

Business for this individual has been so bad that she had to rifle through her jewelry box and "sell" unused gold to pay the electric bill. But she had hope. Until last week.

She was anticipating that the Republican convention would add $250 thousand to her bottom line. That's not going to happen now. She is out of hope and out of gold.

My friend has taken to selling stuff on eBay and playing credit card roulette to find the one that has enough credit left to allow her to buy some groceries.

Here's the thing that many people don't get. If these business owners had a regular paycheck they would probably pay their bills on time and not live above their means.They would be hard working responsible contributors to society.

As Ike Elliot shares on Telecosm

But why not just stick with part-time work? The truth is that part-timers are never really full members of the team, and that daily interaction with a team that you respect and admire is a big part of the reward I get from working. Also, part-timers often don't have full ownership of a task or function. I miss that, too. Lastly, I'd be telling a white lie if I left out the fact that I am looking forward to the full-time paycheck.

What is not explicit is that he is tired, I would guess very tired of the cash flow dance.It is exhausting.

When business is good,( and that means cash flow is in the black) it's really good. When its bad, its horrid. And forget about that advice about having enough money in the bank to survive the bad times. Even if businesses start out with that cushion, chances are if you've been in business for several years you've probably used that cushion.

And, like a gambler who doesn't know when to leave the table, many business owners believe that if they can just hold on long enough, they can make everything better.Sometimes they can.

Another friend of mine has about an $80,000 payroll to hit every month. She has been in business for 25 years. Business is not good. She services the real estate industry. This year alone she has pumped in around $100,000 of her own capital to keep things going. Lucky for her she inherited an oil well two years ago.

A business adviser would probably look at her financials and tell her to enjoy the rewards of inheriting an oil well and stop wasting it on her business.

But what business advisors don't understand is that business owners fall in love with their business and like a mom who wants to protect and nurture her baby, the business owner will do the same to keep a business alive. Sometimes that means huge sacrifices. A willingness to deal with cashflow and all that a bad cash flow brings like melting your gold to pay the electric bill.

Being a business owner means you are willing to take risks and deal with the consequences. If Lisa, Jory and Elisa had not been willing to risk their credit card balances, BlogHer would never have existed.

They did not follow the rules recommended by pundits who said don't spend money you don't have.

They gambled. Many of us are glad they did.

The rest of us gamble and 80% of the time, it works. It's just that annoying 20% that causes the upset stomach, insomnia and the fantasy that a paycheck would make life a whole lot simpler.

I know that it my paycheck envy could end tomorrow if I pick up the phone and someone on the other end says, " I'm hoping you have time on your calendar to help us."

There is a little of Scarlett O'Hara in everyone who owns a business.

Elana blogs about business culture at FunnyBusiness

Submitted by Elana Centor (view blog

) on Sun, 08/17/2008 - 9:05am

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My Response to Paycheck Envy

Very interesting post.

I find that after being an employee for approximately 20 years and then attempting to shift into self-employement has been such an emotional ride that I feel the best way to handle it is to face and deal with the various feelings I have.

And telling myself it is O.K. to feel this way, just don't allow it to intefere with your goals.

Getting a paycheck does provide a sense of security. But, if you really think about it, what, in life is really secure? The paycheck could be flowing in nicely for years and than all of a sudden, and without any warning what-so-ever nor fault of my own, could stop!

Security, yeah right! A false sense of security.

And then, there are the limitations. Being an employee I'm limited to how much I earn, and often, limited, or restrained, in the opportunities I have to increase the earnings within the context of my job; regardless of my performance level, experience, etc.

So, for me, the challenge is embracing where I am today; full-time employment, a part-time consultant, a self-taught securities investor, and, soon, an aggressive real-estate investor; and leveraging all of my talents, skills, knowledge, and abilities so that I will no longer feel that I have to depend on being an employee to survive.

And if I get the boot, (and it won't be my fault) it's o.k., because I have built sustainable options.

I'm currently blogging my securities investment journey:

http://www.ourstockmarketjourney.blogspot.com/

Be Well.

Submitted by AlisaG on Sun, 08/17/2008 - 10:01

i can't agree

There is nothing more rewarding than the freedom to work for myself. and if that includes having to be poor-er, or work harder, or go without to make the bills, than so be it. I would rather struggle with my own business than ever work this hard for someone else. When that sweat equity finally turns that corner, and you realize that your "steady paycheck" is really just you busting your butt for someone else so they can reap the rewards of freedom. Then nothing in the world can make you go back.

I don't miss the daily diatribes. primadonas, political nonsense or what not. I get plenty of teamwork, team efforts and all via the cable lines. And my clients treat me like an integral part of the team, even remotely.

So! No paycheck envy here....

ps. I'm not above going back into the employment pool if ever i needed to. But it truly would be with heels dug in and mefighting it all the way.

jojo

www.goodnessgraciousacres.com

Submitted by jojom on Sun, 08/17/2008 - 12:07

I don't think we are disagreeing

Shortly after I posted this, I got a call from a friend who works for a major law firm. She's an equity partner and until three months ago loved every thing about it. She's in real estate law. The work is drying up. A month ago they took her admin and moved her to an office a block away. She is very worried that she is going to be laid off.

And yes, I feel I am in a much better place than she is. I have work. I have steady clients and I have the ability to get new clients. I would not want to be a 50 something real estate attorney looking for a new job.

I really debated about writing this post but in surfing blog posts I was so surprised that no one really talks about the underbelly of being in business which is there are times you can't pay bills or vendors on time.

And for many of us that is a very uncomfortable place to be. It is not something we planned for. But it is reality and so yes, while I have paycheck envy( is there anything wrong with that?) I also know I am a lucky girl.

elana
Blogher Contributing Editor,Business&CareersFunnyBusiness

Submitted by Elana Centor on Sun, 08/17/2008 - 12:57

I agree

Bravo, Elana! I have also wondered why so few freelancers talk about the struggles of freelancing on their blogs, when they will do it in person over drinks. I think that many of us are reluctant to be honest about cash flow and struggles with freelancing because our clients also read our blogs.

Eight years ago this month I left my full-time employed job to strike out as a freelance web designer and adjunct college professor. I am glad I did, but not a year goes by where I don't look into full-time employment again (mostly looking at listings and revamping my resume & LinkedIn profile).

I have only seriously looked for a web design position at a large business three times in the last 8 years and all three times I made it to the last round when I was informed that they were concerned about me as an employee because I had been freelance. Their concerns were that I would not be able to integrate into the team, I would not deal well with office politics, and that I would find the pay too low. Despite my objections that I love people (in fact working at home can get very lonely), I want to work in a team, and that a regular paycheck would be lovely (higher or lower than my current income it matters not, it is regular!), I lost each of the three positions to an inside candidate who had been at the company for over 5 years.

The freedom of freelancing may be lovely, but I do miss working as a part of a team. Co-working has not come to my area and my attempts to round up other web freelancers has gone to not. And the money thing... oh tell me all about it. Vlarg!

Black Phoebe :: Ms. Jen
Barflies.net
Around Ireland
The Happy Tastebud

Submitted by msjen on Sun, 08/17/2008 - 15:21

I Hear You

I quit a full-time job after 9 1/2 years a year ago and am learning about the freelance life. For the first time in more than 20 years I have actually been able to enjoy the summer a bit. The uncertainty is maddening -there's a lot of hurry up and wait as contracts are delayed, starting dates keep moving on the calendar, etc.

That said, like others who've commented, there is absolutely no security in the world today for people who aren't wealthy. A lot of people I know are being laid-off, down-sized, eliminated and it hasn't mattered how good they were at their jobs or how loyal they were.

I'm finding myself saying yes to everything and I literally don't go the stores except for food and other essentials. I'm trying to lose weight because it would open up a whole new wardrobe of clothes stored away.

I don't have paycheck envy - I have money envy as in how it would feel to have enough money to be free to only do fulfilling work and only pursue what I feel is my true purpose.

In the meantime, here on earth, hard work and uncertainty - sprinkled with bits of fulfillment and joy - is what I see whether you get a pay check or work for yourself.

blog.candelariasilva.com

Good and plenty!

Submitted by Candelaria Silva on Sun, 08/17/2008 - 17:43

Money Envy - I have that too!

If I had financial independence I would definitely focus all of my energy on blogging and I would give up my life as a consultant/facilitator. It's not that I don't enjoy that work, its just that if I had the freedom, I would blog full time.

But since that would require winning the lottery and I don't usually purchase lottery tickets, that definitely won't be happening any time soon.

So I would settle for a regular paycheck -- and that can happen when I have a client on retainer who pays on a regular basis.That is not outside of the relm of possibility.

elana
Blogher Contributing Editor,Business&CareersFunnyBusiness

Submitted by Elana Centor on Sun, 08/17/2008 - 18:43

I worked for a small company

That had cash flow problems quite often (much of the business being tied up in expensive assets). This involved very creative accounting to make sure that, say all the employees got paid on time. For example we would not release paychecks until after 2 pm on some Fridays so that money would move itself around by the time people deposited them (no direct deposit there). Everything was above board, but I remember thinking, "wow, my boss is either crazy or very cool."

Submitted by KatieBeez on Mon, 08/18/2008 - 11:57

I just (really) recently

I just (really) recently decided to give full-time writing a go. It's something I've wanted to do for a long time. Everything you've written is incredibly insightful. I know it's not going to be easy, and I think it's worth it, but I know I'm going to miss the regular paycheck and the paid health insurance. Then I think about how miserable my job was, and I know I owe it to myself to try. Thanks for these reflections.

Submitted by KBestOliver on Tue, 08/19/2008 - 16:04

Elana--thank you!

I'm coming late to the party here, but reading your post reminds me of my days as a freelancer (I did this three times, for a total of about 3 years before co-founding BlogHer), and much of the material on my personal blog Pause is an internal discussion with myself of steady paycheck vs. freedom. It's true--it doesn't feel like freedom when you don't have an income. When I first started out I envied the folks with paychecks because at least they could feel free to spend their money, while I kept every penny "just in case." Still, with so much experience under your belt, you learn how the cycles work. After a while, you don't just freelance, you become a freelancer. It really is a state of mind.

Jory Des Jardins
writes on business and career topics at BlogHer, and on her personal blog Pause

Submitted by Jory Des Jardins on Sun, 08/24/2008 - 16:32