Deciding to leave your full-time job to become self-employed is a big leap for many people. Self-employment can have many pros, such as being able to work your own hours and establishing a business under your own terms. Self-employment can be a fulfilling career step that can ultimately yield financial independence. However, it can also lead to some missteps if you do not plan the beginnings of your self-employment journey carefully. Here are 6 things you should have covered before considering becoming self-employed.
- Establish your clientele – Before even considering embarking on self-employment, you want to make sure your business venture is even profitable. Working to build your clientele first part-time can help you create an established network before jumping into self-employment full time. This can help in transitioning from a traditional 9 to 5 to self-employment. It helps to have cash coming in as you are transitioning to independent work so that you are not relying on your savings to keep you afloat.
- Pay off or pay down debt – Another thing to keep in mind when transitioning into self-employment is to consider the amount of debt you are currently in. Paying off or even just paying down some debt can help you to have some wiggle room when it comes to finances. There are several strategies you can use to try to pay down debt such as paying off your smallest debt first and then work on paying off higher debt. Once you pay off that first debt, it can bring in more confidence to pay off other debt. This can help with establishing yourself financially for self-employment.
- Have some cash cushion – Having some financial cushion when you are first establishing yourself as self-employed is crucial. Any way you can come up with some extra cash before you become self-employed can help you to have more financial confidence in your business. The beginning stages of self-employment requires having a lot of back up cash. You may even want to consider taking out a small personal loan at the beginning. Small loans such as car title loans can get you cash quickly and if you know your business will bring in steady profits relatively quickly you can easily pay that loan back before interest builds.
- Be prepared to work solo – Being self-employed means working on your own without any coworkers or colleagues. This could be both a good and bad thing. Working solo can end up being very lonely and also end up being a distraction to productivity. Be prepared to work on your own and build some intrinsic motivation. You will likely end up working more hours than you would at a traditional job. Make sure you are mentally able to be motivated to work on your own and be able to be organized enough to get tasks done on your own.
- Establish a schedule and goals – One way to help prepare for working solo is to establish a set schedule and set up goals for your business. Establishing a proper work schedule can help prevent you from working too much and too little. Set aside a specific amount of time to work instead of just an endless session of work that could lead to browsing social media. Also, setting up small goals for your business can help you stay on task instead of being overwhelmed.
- Protect your business – A big factor to consider before leaping into being self-employed is to make sure you are taking steps to protect your business. You should consider getting insurance depending on the type of business you are starting. Make sure to invest in things that can help protect your business such as online fraud and working with trusted vendors.
Overall taking the leap into self-employment should be planned out carefully. You want to make sure you are one hundred percent ready for full-time self-employment. Being self-employed is a big financial and personal investment that should not be taken lightly. Make sure you have covered all the ifs, ands, and buts before transitioning to being self-employed.