It's been nearly 2 years since I've received a corporate paycheck. I left that world in Jan of 2009 and haven't looked back since. Was it an easy jump? Hell no. It's been hard - very hard, but I don't regret it and still consider it one of the very best things I've ever done for myself. Read on...
There are many ways to go into business for yourself. If you have a software development background, you may want to become an independent software consultant. If you're a good developer and can put together a portfolio of good-looking, functional software and build a reputation for yourself, it's not hard to get out and meet people and land some contracts. If you've been trying and are not experiencing that, there could be a number of things holding you back that you may not be aware of. It could be the way you're presenting yourself, lack of networking (the human kind) or the specific skills that are missing but could be easily acquired. Please post a comment if you want to talk more about it.
The issue I have with consulting is that the moment you stop billing, your income completely stops. My goal is to invest in things so that I slowly ramp up revenue while continually building new IP (Intellectual Property - site, app, design, game or otherwise). This may not work for many but this article is geared toward that sort of person.
I have managed to avoid consulting since I wend indie 20 months ago with the exception of this month where I decided to make a little additional money in order to fund a cross country move and home purchase. If you used to read my blog regularly, you probably noticed that I've only posted 4 times in the last year. That is the result of being overworked starting your own business.
I decided not to do the consulting route because I've stubbornly been following the notion that if I build lots of high quality intellectual property, Android games in my case, that I will find ways of monetizing in the long term. So far, despite errors in my projections, it has come true. The more I do, the better things get. I'm still not making what I used to, but I love working on my own terms and that's something worth working hard for.
In May of 2009, I was living in North Dakota and formed 2 LLCs: Green Web Publishing, LLC and Battery Powered Games, LLC. I formed two because the 2 businesses are unrelated and have totally different risks. LLCs and Corporations are specifically to mitigate risk so it made sense to do that and I'm still glad I did because if one crashes for any reason, I still have the other making money. I have a few active websites run by GWP and 5 games now published under BPG. Both businesses are profitable in that they make money even when I only do the bare minimum maintenance work. That's nice because it gives me time to continue investing in them and is the exact reason I chose the businesses I did.
I don't currently have any employees. It's just me and a select group of people that I work with, contract out to or pay royalties to. If you're looking to do this same kind of thing, here is my experience and suggestions:
1) Give yourself lots of time. It usually takes a lot longer to get good solid money coming in than you planned on.
Don't underestimate this. I remember last summer when I was honestly convinced I could publish a game that would reliably make me 50k in the next year. Not true! Of course there are exceptions but when you're in a highly competitive market with low margins and fickle consumers - you can't bet on anything! Give yourself LOTS of time to get started. A full year MINIMUM. 2 would be good. In my experience and with talking to others in the same boat, it seems like it's a good 2 years of R&D and learning about the market and how to sell your products before you're making what you originally thought you should be at 2 months.
2) Keep your overhead LOW! Running out of money is horribly stressful. You don't have a regular paycheck. On a good month, you'll make a few thousand. On a bad month, you'll make next to nothing. Business expenses will pile up, including new equipment costs, contracting, legal fees and other. If it costs you $2500 per month just to stay afloat and you only have 10k in savings or 10k available as credit, you're not going to last long! You must get your monthly expenses down if you're serious about doing this. That means selling your car if you've got a car payment. It means buying cheap groceries and rarely ordering food or eating out for a year. It means cancelling cable/sat tv - you won't have time to watch anyway. My wife and I found ways to rent really cheap or house sit for people we knew for over a year. That saved probably $1000/month for a year. It may not be an option to most people but don't rule any cost savings out. You NEED to keep your overhead low because you won't be able to make good decisions when you're desperate.
3) Network. Network with everyone. Find local common interest groups and go. Talk when you're there! I go to game development and mobile interest groups here in my local area and I've met some of the most valuable leads in my life at them. I've also seen people who show up and don't say a word, getting very little out of the ordeal. Just go and get to know everyone. Most people are very friendly at those things and you may end up making a few good friends out of the deal as well :)
4) Make yourself known. This blog alone has developed into good leads for my business. All I've done is blog about the Android development that I've done and even though I haven't really written much in the last year, it seems that what I wrote has been enough to get the attention of a few important people here and there and it's given me opportunities I couldn't have dreamed of before.
5) Be persistent. Your first attempt at what you're doing may very well fail. In fact, the second and third attempts might also be unfruitful. It gets tough - especially when you've got those glistening, big bright eyes staring at the prize and it all seems to slip through your fingers as the game, app or website you've developed simply doesn't take off. There's a lot to learn about designing, developing and marketing a product that really takes hold. For 99.9% of us - it doesn't happen overnight and certainly doesn't happen on the first attempt. I'm still searching for that magic bit of gluey game design that makes people rave about a title. I haven't quite found it but get a little closer with every try.
6) Be patient. This may be reiterating a point made above but these things take time. Though it's happened to a few, don't plan on winning the lottery with your first bit of IP. Stay the course, keep refining and improving and keep calm.
This may seem very abstract if you haven't started anything up yet but it'll make more sense down the road. Of course there are always exceptions but these things have been very important for me so far in my venture.