It’s obscured, but his right middle finger is pointing directly at conventional employment.

You want a real-world example of someone who flipped the bird to the idea of being an employee and never looked back? Here’s Part I of a test case for (and testament to) the wisdom of sacrificing a “secure” paycheck for the riches that come with self-determination. The thrilling conclusion will come Friday.

You don’t know him. His name is John McClain, and he’s the youthful 46-year old founder/owner of Dog & Pony Studios in Las Vegas. They do sound design for movies, TV shows, commercials etc. But that’s secondary to what the business has been able to do for its owner. Not only does has it created gainful employment for multiple people, it’s allowed John a lifestyle that includes a second home and exotic vacations.

(Wait, that sounds overly grandiose. The vacation home is a modest cabin in small-town Utah, not a private Caribbean island. And Laos is cheaper to visit than you think.)

He didn’t start the business in his parents’ basement, recording his friends’ conversations on 8-track as a precocious preteen and growing the business over decades into what it is today. Far from it. Instead, he…well, let’s let him tell the story.

John worked for an East Coast production studio, which we’ll call “Omega Center”. In 1996, Omega looked to expand to the West Coast, and put John in charge of those operations. The job involved him managing the studio, producing commercials and other pieces, creating original music, hiring and training employees, et al. He’d signed a contract, and, as John put it,

I made the classic employee mistake of not having an attorney look over my “contract”.  Because my employer would never do anything to screw me, right?

Of course, John didn’t know this (or even think of it) at the time. Most employees wouldn’t. I get paid every 2 weeks, the checks don’t bounce, why would I worry about my contract? Besides, those things are boilerplate, aren’t they?

When Omega offered me the job, I also had a great offer on the table in Detroit, where I was living at the time. I figured I’d throw caution to the wind and asked for $100,000 a year. They looked at me like I was from Mars but I kept a straight face and offered some story about moving my wife, leaving home, etc. They offered $45,000 + 7% of gross earnings.

Stop. John insisted on a percentage of gross rather than of net. He knew that gross revenue is easy to trace, and that’d he be the one largely responsible for maximizing it. Dollars in are straightforward. Not so for net revenue, which Omega’s accountants could easily lower to a level they found palatable. (“You bought lunch for the clients? Sorry, that counts as a cost of goods sold. We’re deducting it.”)

All I had to do was get the studio’s earnings up around $725,000 and I’d be earning about what I’d asked for. Before I started, West Coast operations grossed $150,000 and were performed via phone and FedEx. With a physical presence, in 5 years I’d raised gross revenues to $1.2 million and hired 2 producers (in addition to myself.)

Did my salary change? Yes. Did it go up? No. The owner never thought I’d do so well, and was angry that he had to pay me 7% of $1.2 million. Never mind that he was earning 93% of an amount he never thought he’d earn. He cut my salary and I began preparing an exit strategy.

Still, John was in a place that most employees would envy. He was “management”, he had 4 people under him (including an office manager), and the people he had to report to were 2500 miles away. It was his to succeed or fail with. Sounds liberating, right?

It should have been, but Omega suffered from myopia; you can’t do it that way, because we’ve never done it that way before. They micromanaged my office and told me I was doing it all wrong. By the way, the home office was retaining only 28% of its clients from one year to the next. Here on the West Coast, we were holding onto 68%.

It’s awesome that he’s petty and/or detailed enough to remember that years later. John was putting in 50 hours a week, and one day reached the point of no return that so many employees do.

I started telling myself the job wasn’t that bad.

Everyone who’s ever done that, raise your hand. Yup, you in the back, too. Higher, where we can see it.

John came to work one morning in 2003, and was greeted by the owner sitting at his (John’s) desk. Owners don’t fly across the country without a reason. And in this case, a severance check.

Omega paid John what the contract stipulated, but reminded him that the contract forbade him from plying his trade. John hired a lawyer to look it over, but

The owner had written it himself. My lawyer literally laughed out loud when she read it.

John had (or had had) a boss who knew nothing about contract law, but other firees aren’t so lucky. If you do insist on working for someone else, never accept a contract that includes terms that can affect you even after they fire you. Better to go hungry until you find an employer who won’t force you to stay unemployed months or years down the road.

So here’s John. Late 30s, wife, mortgage, cats, dogs, pink slip. Being rational, he took his new employment status in stride:

I freaked. Then I let all my friends and clients know what had happened. Then those same friends and clients started calling me directly to book me for their jobs.

He had enough work to see him through in the short term, and fortunately his wife was continuing to make good money. But as John (and not many other people) is frank enough to admit,

She and I were always spenders, not savers. One salary wouldn’t cut it at the time. We were super tight for dollars and had no savings to speak of.

Sometimes you wonder if the boss who’s holding the scimitar over your head knows that you haven’t saved anything. Every person who dispenses financial counsel loves to advocate creating an “emergency fund”, but hardly anyone actually does it.

The standard move at this point is, of course, to apply for jobs at other companies in the industry. That’s just what you do. But like a dog who’s been abused, John was wary. It’s hard to put 100% into your search while thinking, “The same thing might happen again. I need to go it alone.”

I received an offer from each of my prior competitors but I didn’t want to go back to another j-o-b.  My former employer had taught me how to not run a business, and I was determined to put those lessons to the test. 

You already know how the story turns out, especially if you clicked on John’s company’s link, but it didn’t go down the way you think. Come back Friday for Part II.

**This article is featured in the Baby Boomers Carnival: One Hundred Fourteenth Edition**