Working For Yourself: Part 1

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.

Any questions?

16 Comments

Post a comment here or discuss this and other topics in the forums

thanks

Hi Robert,
thanks for sharing this.

Game programming

Hi Robert,

Did you teach yourself game programming just by reading books? Did you work for a video game company before?

Couldn't agree more :)

Hi Robert,

I really love reading this post as it give me the insight of what I might experience in the future after resigning from my 9-5 last month. I've only started my full time freelance writing in less than a month but I've already built my client base since the last one and a half year. Thank God the clients stick to me like glue (mostly of them are internet marketers who needs English articles, ebooks, etc).

So I guess your post served as a reminder to me especially the "keeping the overhead low". May I add that getting oneself a systematic work schedule also helps in managing time especially when the orders are mounting up by the day. Just my two cents.

Take care & best regards.

Shafina
Kuala Lumpur, Malaysia

Sweet post!!!!

Hey Rob,
This is a totally sweet post. I can relate to everything because I've spent the last year part-time trying to build up my income online and it ain't easy!

From next year I'm thinking about doing it full time, and I have enough saved up for about 18 months of expenses if I cut down on a lot of stuff like you mention.

There is no guarantee that I will succeed, but I know that I will. I also know that it will not be easy and it takes a huge amount of hard work, but i know that I can make it. And I feel like I have to try or I would be lying to myself. I want to take this leap and if i fail at least I know I gave it my all :)

Thanks for the inspiration and success with your online ventures!
Cheers
Diggy
http://www.upgradereality.com

Hi Greg, I've been doing

Hi Greg,

I've been doing general programming for about 11 years now and got into graphics a few years ago. I don't know what it means to have a background be in something as that's always moving and as soon as I get good at one thing, I start in on another.

I'm moving because it's the right time to do it in my life and my wife and I have picked an area that we believe has the highest potential for really happy, peaceful environment that is aligned with our general world views.

Very cool that you're also trying things. Android isn't so hard but if I can give a piece of android game programming advice, it's that if you're trying to develop high performance code, go native from the get-go :)

Hey Robert Thanks For

Hey Robert
Thanks For Sharing!

My Wife and I are on the same adventure, I am still a Software Arch/Engineer at a Engineering Firm and she quit her business to devote fully into this company... Definitely takes a lot of time and devotion... I am a Game/Simulation developer for c/c++ DX and openGL so trying to take on android has been a good hurdle for me... But did enjoy your article on Live Wallpapers...

What apps have you published?
Is that what you have focused your business on is Android Apps or doing more contract type of work?

Do you have a background in Graphics Programming?

I see you were/are located in North Dakota... interesting you mentioned this, we want to move our business to Minnesota, but I am afraid the clientel would be much smaller compared to the urban area I am now, has this been a struggle for you? I see you mentioned a cross country move... was this because of clientel issues?

Thanks for sharing

Greg

As a fellow freelancer I agree

I live on as little as I can each month, I sock away savings and I take it easy (stress-free is the name of my game)... it's a great and exhilarating jump but I'd also suggest doing research on the market before leaping. Not everything you do can translate into a freelancing job. Some things just don't fly.

Great Article, Robert!

Great read! I started working for myself at home about a year ago with my start-up, Ten Ton Books, and I must echo much of what Robert says here. Running out of cash sucks, but doing what you love everyday is awesome. And, flexibility is unbeatable. You can try lots of different approaches, tactics, and techniques...changing, adjusting, until you hit that right mix.

Plus, Sundays are no longer ruined with the dread of Monday...instead, it's exciting to think about what the coming week will bring. Thanks for a great article!

Geoff

Great Article

Thanks for posting your honest experiences of becoming successfully self-employed. I am a filmmaker, and I am in the process of doing the same thing you have gone through. I am not making any money whatsoever, but it was inspiring to read your article and see that it can be done. I will be sure to check out more of your site.

spot on

All good and very valid points. I started a pet products and services magazine www.sapetpages.co.za about a year and a half ago and at first it was very difficult to convince advertisers to go with my product. We have already moved from being a regional magazine to being a national magazine. It's really a simple case of what you put in you will get out, and the fact that you have ownership and are building for the future makes it that much easier to work late into the night!

People who work for corporates are under the false illusion that they have job security and a pay-check at the end of every month. Sure...until someone else makes a poor business decision and you get retrenched or the business does well and you get retrenched in the re-structuring when a larger competitor buys the company.

Working for Yourself

You've got it right. I started my own business (an international trading company) in 1975 & retired in 1997. My first commission check (for a very small order) was less than $10...not worth cashing, so I framed it. Bought used everything...office furniture, IBM Selectric (didn't go computer til 1984). Basement office, no windows....$150/month. Wait til after 5pm Eastern time to call the West coast at a lower rate.

The first time in my life I was the President & emptied my own waste basket.

Went one year drawing no salary & the next year at a survival salary only. Took four years before drawing a good salary.

But I wouldn't trade it all for anything.

More on Networking

Hi Robert,

From someone who just set out on his own a couple months ago, thanks for this post. I can definitely relate to your points (especially to #6).

Under the company I started, I help companies with business process automation by writing custom code and developing reporting templates. Of course, with a model like this I need to seek out my own clients and convince them that my services are useful. It isn't easy. For your readers leaning toward a services-oriented business rather than a product-oriented one, I thought I'd pass along a networking tip that has helped me immensely:

Volunteer your services for local non-profit organizations.

It's a win-win opportunity. First of all, it feels great to help out your local community. I've met some awesome people who are truly grateful for what I've done for them. They are happy to provide me with references for when I approach new potential clients. Additionally, many non-profits are very well connected. Their boards are often filled by local business owners who appreciate the hard work and initiative you put into your own business. I've met my biggest clients through pro bono work I did for their associated organizations. Finally, your efforts go a long way toward getting your name out in the open, and in an extremely positive light at that.

This might not apply to everyone starting a business, but it has certainly been a huge part of getting my company off the ground.

Stan

Lifehacker!

My little guy's all growns up!

Nice post.

My wife and I opened our own

My wife and I opened our own law practice six years ago and just about everything you said above is true with our business too. It took over a year to turn a profit. I was working full time at a corporate job during the day just to pay the bills at home. Once I got home I would work until 2am on our business. Most business owners are good at their craft but bad at networking and marketing. You have to have the whole package to be successful. It's a lot of work and higher risk but nothing beats working for yourself.

Hi Andrex, I thought I was

Hi Andrex,

I thought I was going to sprinkle my time nicely across both the games and the sites but the games side took over (as it normally does) because it's so demanding of time and resources. I probably could have had more reliable income growing my sites but as they say - you've got to follow your passion and I apparently love graphics programming :)

I didn't have any savings when I started. I still don't - but I don't operate in the red anymore either. I have a big line of credit (not recommended to use unless you have no other options) that has been my lifesaver. I'm slowly paying it down now.

$1000/month may be unrealistic in your first few months. I believe my games company made no more than a few hundred per month for the first 5 months - and I got into the Android games market very early. It's much harder to break through now. Also, you may not want to do traditional game dev (make a game, make a demo version, sell) but instead choose to design a game specifically that will be rated as 4.5-5 star, make it totally free and hook up with tapjoy or some kind of in-game upgrade credits system. Those things don't often occur to the first time developer as the most profitable but it is of my opinion right now that alternatives should surely be tested as the mobile game market is highly saturated.

Do you have an IGDA group locally? That's what I go to here. If you don't have one, you could form it, but it'll be a little slow getting it ramped up, so just be prepared.

The website business is to make new sites that are wholly owned and operated. It's hard to do (not to build the site but to venture and have people actually start using it en mass)

Glad this was helpful!

Cheers

Whoah, first of all thanks

Whoah, first of all thanks Robert. It must have taken a lot of time and effort to write this whole thing up.

What's kind of odd is I seem to be in your exact same situation, or I will be eventually. I love making both websites and games, and I hope to work for myself doing the latter eventually.

I have to ask, how long did you start saving up to become self-employed before you finally did it? How much in savings did you need?

For myself, since I'm not married, I'd probably think $1000/month within the first few months would be pretty fantastic. I'd be totally happy making that, but as you said, that's only if I was able to trim expenses and I kept the payments I needed to make low.

Also, the place where I am is pretty much the pits when it comes to local game development groups, it's kind of depressing. I'd like to move to California eventually but from what I understand, housing there is really expensive and thus not conducive to starting up a new company. So it's a paradox of whether I want to network more or save money. Advice on this would be appreciated.

With your websites, are you doing contract work (making designs for others)? Or are you genuinely developing new websites? To me, I find it easier to make websites than games so that's what I've been doing in my spare time, and I genuinely derive joy from launching new sites. So I'm kinda split on what I should focus on, but as I said, for now I'm going to focus on games. I never thought of just doing both though. :D

Again, thanks for the post, it makes keeping you in my RSS reader over the last year completely worth it. You've earned a permanent spot. ;)
-Andrex