Wednesday, November 14, 2007

Adventures in Self Employment

As the third anniversary of my Self Employment For Bohemians blog approaches, it's my intention to reassert the central premise--not only is it very good indeed to be self employed, much preferable to the living death of holding down a regular job (especially one in a soulless corporation), but it is very do-able to be self employed.

I am not the only artistically inclined entrepreneur with a broad anti-authoritarian streak, and certainly I'm not the most articulate. I do, however, have something to say about the process of building an independent work life for oneself, and sometimes I'm even funny!

Digging back to the beginnings of this blog, I am going to reprint my seminal pieces about self employment over the next stretch. Presumably I'll have something new to say on the subject once I've reposted my core articles.

The following was first posted at the end of 2004, it's been edited since.

Self Employment for Bohemians
By Steve Lafler

I was fifteen minutes from reporting to my first day of work as a minimum wage dishwasher early one evening in June, 1979. It was my first summer living out of my mom and dad’s house. Things had started well enough—my intention was to sell wholesale T-Shirt printing services, pumping out the jobs myself on a freelance basis. The first week, I sold a gross of shirts to a local pub, making a gross of dollars. Considering that rent for my summer sublet was all of $60.00 per month, I felt flush! But I hit the wall after that. Despite hanging flyers all over Amherst and environs (including on the enormous University of Massachusetts campus), the fact was that my client base (dorms, student clubs and the like) had departed for the summer and no one was buying.
Having spent most of my last $20.00 on a book that caught my eye (I’d convinced myself that this was practical through some alchemical equation), I was ready to throw in the towel and signed on for a dishwasher job on campus. UMass hosted an odd assortment of conventions, seminars and crackpot camps in an attempt to pay the bills over the slow summer season. I was to be washing dishes in the campus dining commons for a group of several hundred Transcendental Meditation practitioners from the west coast who were convening a seminar on levitation. I did mention it was the Seventies, right?
I was filled with despair at the bleak prospect of washing dishes. I’d done my time as a dishwasher at a fast food steak house in high school where I was required to wear a polyester cowboy outfit. I had no desire to return to the low rent glory of the dishwashing pit.
At fifteen minutes to the 7:00 pm diswashing shift, a bolt of lightning struck. Of an instant, a fully formed scam literally sprang out of absolutely nowhere and announced itself to me. The underlying message was clear: YOU ARE NOT TO REPORT TO THE DISHWASHING JOB! I’d recalled that an acquaintance, Sue, who worked in the campus center building, had mentioned to me that she had a list of groups who were holding events in the concourse of the campus center that summer. Sue had actually produced a list of the events for me. She assured me, if I was to set up and sell T-Shirts at these events, she would look the other way; not charge me for the space. It seemed risky and a bit scurrilous, and I’d forgotten about it until fourteen minutes to dishwashing.
It was a Thursday evening, and that very weekend, the New England Camera Club was hosting their annual convention in the campus center. I determined that I would grace the show with their official (bootleg) t-shirt. The first problem to conquer was lack of capital. I knew where I could score some blank shirts for a dollar a pop, which I could print and mark up to the princely sum of four bucks, but since I was down to $3.00 on hand, it didn’t seem much of a plan. If I had a hundred bucks, I could buy a hundred shirts and turn it into four hundred over the course of the weekend, enough to finance a month of summer living!
Did I mention it was the Seventies? Very fortunate, as it turns out you could hitchhike anywhere in New England back then within the course of a few hours, a day tops. I elected my mom as my financier and was on the road by five minutes to seven with my thumb up. As my folks lived about 70 miles away, I figured I’d get there just before the summer night settled in. I got a ride out of Amherst towards the western burbs of Boston just about the time my shift supervisor probably started wondering where the hell I was.
Okay, so mom definitely raised an eyebrow at the plan, but recognized my desperation and fronted the bucks. By early Friday afternoon, I was back in Amherst at my drawing board putting together a cute little cartoon logo featuring a guy who had a camera for a head. Somehow I managed to rustle up the blank shirts and get them all printed by eleven that evening.
The next day, I set up bright and early on the campus concourse with a table that Sue scrounged up for me (she was slightly horrified that I’d actually taken her up on her offer!). By noon I’d made Mom’s stake back, and was up to $250.00 by the end of the first day.
By just past noon on Sunday, I hit about $430.00 (having managed to get the shirts for .89, I had a few over 100 pieces). At that point, an obnoxious fifteen year old (who had been flirting with me earlier) returned. With an attitude of scorn and derision, she asked if these were the official New England Camera Club T-Shirts? I said that indeed they were! A pale and disheveled fifty year old sad sack with caved in shoulders stepped forward and introduced himself as the president of said club. I handed him the four remaining shirts, and barked “Here’s your cut!”. I was breaking down the table over his protests and briskly walking it back to the storage bay that Sue had plucked it from the day before. Table tucked away, I smiled at the Pres. and thanked him profusely. Then I turned on my heel and ran close to four minute mile pace back to my flat, a remorseless 22 year old flush with success!
Now I admit that I’d pulled a fast one on that guy, but I am hardly the only college kid to ever make a quick bundle of cash bootlegging a few T’s. The moral of the story, such as it is, goes like this: If you’ve got the BoHo self employment stuff, you know it, because you have an anecdote or two a lot like this. Normal, sensible, thoughtful people do not take risks like this, they do not engage in such brazen behavior. They want “security”! You and me, we’ll take the risk any day… for those who prefer the living death of the secure government job and pension, they can have it!

Is BoHo self employment for you?

Are you an insubordinate scalawag who hates being a cog in a hierarchical organization? Do you enjoy simple accounting? Then BoHo self employment may be the designer lifestyle of choice for you.

I was a paperboy from the age of thirteen until I was fifteen. I wasn’t particularly ambitious about adding new customers, nor was I the best accountant/enforcer I coulda been, but I was conscientious and punctual about getting slightly over forty households their morning Springfield Union for two years. I really enjoyed the earnings—at first, it enabled my Marvel Comics habit, which transformed into an album buying binge when I got a bit old for superhero comics. Finally, at the grand old age of fifteen, the gig supported important early forays into the enticing worlds of beer and weed! I didn’t give it much thought at the time, but apparently having a paper route is a good indicator that you may have the right stuff for entrepreneurship.

That may well be true, but the ultimate test is probably more like this: Have you ever been hired for a job (probably one you desperately needed) only to find yourself really depressed at the prospect of looming indentured servitude? Yes? Now there is a swell indicator that you have the right stuff for entrepreneurship!

Okay, that’s really only part of it. Where lies you passion? Do you obsess over something that can translate into a product or service? Can you see yourself building a business around this passion, this obsession? If you have an intense focus, if you naturally bend your will to doing something about it, bingo! You are ready to put yourself in the driver’s seat in your life. Lemme warn you though, you are in for one hell of a bumpy ride. You gotta want it BAD! Seriously, it is easier for most normal humans to just get a job and have a hobby on the side. Stare yourself down hard, look in your heart and do a gut check. Ready? OK, let’s go!

Disclaimer! I can only tell you about my experience, what has worked for me. Take what resonates with you and dump the rest. I am no business genius, but I am very canny about producing an income for myself. I have been able to do so in adverse circumstances. In the midst of the devastating recession of the early 80’s, fresh out of college with an ART degree (not a lot of hiring going on there!), I created a job for myself out of thin air (more about that in a bit.)
Right now, at the age of 47, I’m running a business that grosses about $130,000 a year. It pays me about 35K, and two part timers last year made a total of about 21K between them working for me. Mind you, I’m working an average of about 30 hours a week… part of my pay I take in TIME. Say what? That’s right, I pay myself in time to do what I want. That’s the BOHO part. According to my handy American Heritage Dictionary, Bohemian is defined thusly: “A writer or artist who disregards conventional standards of behavior”. I’m an artist as well as a businessman, so I’ve always been willing to trade potential earnings for time to do what ever the heck I want. In my case, to write and draw “literary” graphic novels. Yes, I make some money from the comics too, but not enough to keep the wolf away from the door.
I’ve managed to keep myself employed during three serious economic downturns since I got out of college. I’ve been able to buy a house (I went in on it with my wife and sister in law, a very economic way to buy real estate). By virtue of re-investing a lot of my earnings back into my business, I pay pretty darn low taxes. I’m no Donald Trump (thank god!), but I’m reasonably content with the job I’ve created for myself.

Okay, the place to start is at the beginning, and we’re almost there, but first I want to tell you about my foolproof concept for starting your own business—it’s called the Zero Overhead Model.

The idea is that your clients are going to finance your business for you! I use my own business model here for a couple of darn good reasons. First, it’s a business I know well. I’m qualified to hold forth on the business of wholesale custom screen printing. Second, my business is built around both a service (custom screen printing) and a commodity (t-shirts/apparel). I believe that the zero overhead model can work for both a service based or a commodity based business.
Here’s how it works in a nutshell. Joe or Joanna Business owner (or any potential client) comes in to order 100 t-shirts imprinted with their logo. I quote a price on the job and they agree to it. I write up the order, detailing the particulars. The client signs the order form, acknowledging their agreement to the deal. Let’s say that the total on the job is $700.00. I tell the client that I require a 50% downpayment to produce the job, with the balance due upon delivery. With costs of about $250.00 total to produce the job, not only have I enlisted my client to finance production of the job, but I’ve gotten a little pocket money up front in the deal!
When I started producing custom screen printing jobs as an undergraduate, it didn’t take me long to figure out that my customers were also going to be my financiers. Necessity is indeed the mother of invention!
This little schema does bring up some obvious questions. For example, why the heck is Joe (or Joanna) Business going to trust you with the aforementioned $350.00 downpayment? Based on what do they trust you? Okay, I admit it’s a con game! A confidence game, that is to say. When you meet a prospective client, you are projecting confidence in your ability to deliver the goods. Your appearance and demeanor project professionalism. If you are indeed in the t-shirt game, you show them samples. They are welcome to walk if they see red warning flags in the course of your meeting. I’m a proponent of the soft sell; as such, I am very comfortable with a perspective client who decides not to place an order at any particular meeting. My attitude is, I’m not so much gunning to close a sale no matter what, rather I’m helping the client fulfill there need for some quantity of screen printed t-shirts. If the price is too dear for them, or if we aren’t a good fit to do business, I’m quite happy with that.
Another question: What about production equipment? What about samples? What about office or production space? Phones? Computers? Etc.? Well, when you are starting out, you just need to improvise. You (hopefully) have a roof over your head, whether it’s your place, your parents house, a sublet garage (ideal!), a dorm room, or even if you are couch surfing. Work with what you have and build from there. If you can borrow a friend or family members phone and/or computer for even an hour a day, that may be enough to contact initial clients and produce that first job.
I’ll dust off another anecdote as an example. I began freelancing t-shirt and illustration jobs while still an undergraduate at UMass, printing jobs in my dorm lounge. I took off for the west coast half a year after taking my degree. After several months of traveling, I found myself in Eugene, Oregon. I spent the little money I had securing an apartment. I placed some ads in the local university newspaper advertising my screen printing services, then I copied up a couple hundred flyers and papered the phone poles in the college neighborhood with them. I was down to about eight bucks when the first job came in (phew!). It was a small job, which would take only about $30 bucks in supplies to produce… yet somehow I had neglected to hit up the client for a downpayment. Oops! I needed a can of ink, four blank t-shirts, a squeegee, a yard of synthetic silk and a wooden frame. What to do… I borrowed the money from my girlfriend! From there I sold more jobs, just scraping by, until a bounty of dorm, frat and music festival gigs rained down on me in the Oregon spring.
You do not want to always ask friends or family to bail you out. And if you do borrow money from them, be sure to make it your first priority to pay them back. But you will rely on your network of friends, family and colleagues again and again. Community is a very good thing! When someone comes to you for help, gladly give it to them! (Unless they are a serial leech, in which case giving them a kick in the ass is the best favor you can do them… ).
The zero overhead model may be the only way to fly for BoHo entrepreneurs, but believe me they aren’t the only ones. Look at a guy like George W. Bush. Is that guy a self made business man? Hell no! Everything that guy ever owned was procured with sweetheart loans from his daddy’s fat-cat friends and stuff like that. Do you think the super rich ever buy anything with their own money? NO! They get it with O.P.M. (other people’s money). OKAY! That’s it for the zero overhead thing for now. I’m getting off track talking about these darn oligarchs and plutocrats.


The Schedule C is the best friend of the sole proprietor. Get to know it well. Work it! The Schedule C is the “Profit or loss from business or profession” form, to be filed along with your form 1040.

If you re-invest in your business, your business will grow, and you will pay very little taxes. Keep a very tight ledger of income and expenses, using the categories that the IRS provides on Schedule C; you may also add categories peculiar to your business. At the end of the year, compile the data and boom—it takes like ten minutes to fill out the Schedule C. Okay, so it took you five hours to add up your ledger, if you do it by hand like me. You can do it on your computer too.
You will pay taxes on the profit you show at the bottom line of the Schedule C, and you will also pay self employment tax (figure it on Schedule SE). There’s the rub, the sefl employment tax is a stiff one—currently upwards of 15%. So be sure to make quarterly payments to the IRS, or you’ll get your ass kicked come April 15th. The best way to do this is to set aside a percentage of your earnings for taxes every time you get paid—EVERY TIME! Don’t raid your tax fund when you get tight for funds! If you are tempted to raid it, that is the moments to send it to the U.S. Treasure! Anyhow, the theory is that you’ll get some of that self employment tax back as Social Security when you’re a geezer. Whoops, I forgot, W. is gonna trash Social Security…

Steve Lafler

Contents © 2007 Steve Lafler

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