Written by Jeffrey R. Armstrong – President/Owner of Armstrong Capital
Your favorite Master Note Buyer – Straightforward, Honest, Fair…
Being in the Note Business and being your own boss is great! Being your own boss is also hell sometimes! Often, people want to be in the Note Business because they’re lured by the freedom of working from home. If that’s what you care most about, you’re probably better off trying to convince your boss to let you telecommute and learning about the downsides of working from home rather than leaving your employer to work for yourself. Being in the Note Business and owning your own business can have the same benefits (and challenges) of working from home, but there’s a whole lot more to consider. Here are the some of the biggest things I think you should know.
You Might Be the Worst Boss Ever! It’s true when you’re an independent contractor or business owner in the Note Business your note holders and investors are in a way your collective boss, but that’s not really the same as being beholden to one company holding the purse strings. When you’re a business of one, it’s much easier to let your weaknesses (e.g., procrastination or poor time management) get the better of you. Even if you thought you were productive as an employee, you might be nowhere near as productive when you’re working on your own.
In the Note Business you’ll need a strong work ethic to begin with, but perhaps even more important is to schedule your work hours and consider them set in stone. E.g., between 8 AM and 2 PM only emergencies can pull you away (this helps when working from home with family around as well). If you find it really hard to motivate yourself, you might need to get a personal assistant to keep you on track or reconsider working for yourself. You need to be both a good worker and a good manager to pull this off.
You are the President, CEO, CFO, Accountant, Pricing and Negotiating Department, Processing Department, IT and Customer Support Team, Operations Team, and Janitor! Everyone knows you’ll have more than one hat to wear in the Note Business if you go it alone, but there are two things about this that might throw you off:
You under-/overestimate how good you are in a particular role. You might think you’re great at marketing or negotiating but actually hate it when you’re doing it for a living. Similarly, I’ve always dreaded processing, but given something I’m passionate about, I’ve learned to be quite competent. The point is, don’t be afraid to go into the Note Business for yourself if one of these areas is a weak spot. You can develop these skills over time through practice, repetition and time on the water (experience).
You have to do all of these tasks regularly. That said, plan on marketing/selling yourself more often than you might be comfortable with and dealing with the grittier side of owning your own Note Business (more paperwork! tax headaches!) than you might have expected. If you neglect any sides of the business for too long, you’ll run into problems.
It’s definitely a juggling act. Knowing which roles you’re not great at and either work on them or outsource them (if possible) so you can focus on your strengths. For getting more comfortable in roles you might not be used to, check out a few home-based business books/guides from the library to give you the advice you need to at least make sure your bases are covered. For creative types, I like The Business Side of Creativity and for general self-employment, Small Time Operator and don’t forget The Seven Habits of Highly Effective People. There are only so many hours in the day, so you’ll need to carve out your time diligently.
You Might Not Remember What “Free Time” Is Anymore! The nice thing about being an employee, at least in many fields, is when you finally pack up and go home, you’re on your own time. As a Note Business owner, when you have everything—not just money, but time and emotions—invested in your endeavor, there’s no real “going home.”
Part of this is there’s just so much more to take care of (see the point above), and the other part is you might always be thinking about your work. Working on your business is both a pastime and a responsibility that can eat into your entire day or take over your life if you’re not careful.
As much as I dislike a rigid schedule, the fix, again, is to schedule your day, and also to be mindful of whether what you’re doing is really productive – for work or for entertainment. I’m learning to be much more protective of my personal time and not let seemingly work-related activities look like work.
The “Feast or Famine” Cycle Is a Vicious Rollercoaster! One nice thing about being a salaried employee (or W2er) is predictability: Every paycheck is the same. Your taxes are paid. Your benefits are set. Your vacations and holidays are assured.
When you get a 1099 (as an independent contractor) or own your own Note Business, your earnings—and how many transactions you get—are largely unpredictable. Count on it: There will be times you’ll have more work when you can barely handle it, and little to no work at others.
For my part, the first couple years of my Note Business, transactions came and went. At first, I had to learn to hustle, negotiating on as many opportunities as I could. Then, after a time, I was so overworked and frazzled, my biggest issue wasn’t making money or finding work, it was staying sane. When you’re on your own, you’re more likely to burn out after taking on any and all transactions that comes your way. (You’re like an animal that doesn’t know where the next meal is going to come from, so you take on every transaction. You feast, if you can.)
To get off that rollercoaster, you have to plan your time so you’re always working on all areas of your Note Business.
You Might Envy Your Salaried Colleagues! There was a point in my life when I had to decide between being an employee or being self-employed in the Note Business. I now know that I made the right decision for me, but I still wonder sometimes, especially when I read articles that say things like this:
“…If you’re the worker, you may be tempted to stay “1099,” figuring you’ll get a bigger check that way. You will in the short run, but you’ll actually owe higher taxes. As an independent contractor, you not only owe income tax, but self-employment tax too. On the first $113,700 of income, that’s a whopping 15.3% rate. Beyond $113,700, the rate drops to 2.9%…”
Similar “am I doing the right thing” times include when I question taking a vacation or sick day, when I hear friends talking about benefits (retirement matching, healthcare, gym membership reimbursement, paid sabbaticals), and, of course, tax season.
Doubt is fine and normal. Remind yourself that if you were an employee, you might be wondering “What if?” as well (“the grass is always greener…”). And then remind yourself of all the benefits of working for yourself in the Note Business, including: greater/more diverse work opportunities, more flexibility, extreme passive income and more job security—and why you got into the Note Business in the first place.
After going from a “normal” W-2 job to a work from home one-man operation, these are some things I wish I had known when I started. It would not have changed my mind but may have given me some more insight into what was ahead. I hope these tips help you on your way to Extreme Passive Income in the Note Business! Remember success demands action, keep on marketing, it’s going to work! TWITA! (That’s What I’m Talkin’ About!) J