You’re Not a Real Business

You’re Not a Real Business

Let me ask you, is this “a real business”?

For 20 years as an IT consultant, I would get a client, work exclusively for that client for 3 months, 6 months, or a year. I was paid higher than full-time employees got paid, had no paid vacations or benefits.

At the end of the contract, I would find a new client. I did this for 20 years, as I said.  I was incorporated. I deducted expenses from my income, and paid taxes to the government.

Recently, I switched from the consulting model to the online teaching model. The business is effectively the same though. I create information products, and list them for sale on one web site. They pay me a royalty for that, and I deduct my expenses and pay the taxes on that.

Does that fit the definition of a business?

What does the dictionary say?

An organization or economic system where goods and services are exchanged for one another or for money.

Every business requires some form of investment and enough customers to whom its output can be sold on a consistent basis in order to make a profit.

OK, I meet the requirements for that first sentence I guess. Goods and services are exchanged for money. Check.

“Every business requires some form of investment”, I'm going to say that not all businesses require a financial investment. Businesses are bootstrapped all the time. But I invest significant time in creating my products. So even spending a month to create something is an investment. “Enough customers … on a consistent basis … in order to make a profit” – well I meet the requirements for that too.

Photo by wu yi on Unsplash

So why would someone say, you're not a real business.

The argument frequently made is that a business that is wholly dependent on another business is not a business. When I was consulting, I was wholly dependent on my clients. If a client fired me, I would have no income the next day until I found another client. And there's no guarantee of how long that would take.

Or as an online teacher, the argument is that I make most of my money on Udemy. If Udemy decided they didn't like me for some reason, the money would stop flowing.

That argument is crap, right.

Because there is no requirement in the definition of a business that “if you lost a client, it would not affect you.”

I worked for a marketing agency that had dozens of clients. But one client was bigger than the rest. When that client took their business somewhere else, 50 people were let go. It was a significant blow. 

In that case, having 20 other clients did not save that company from being affected by this loss. Those employees who were looking for a job from that event were certainly affected.

I have a business in which I am paid quite well. If something was to happen to that, I would adjust. That's what businesses do. They continue, and they adjust, based on changes.

 

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