6 Things To Do Before Becoming Self-Employed
So, you’re thinking about cutting the cord with your full-time job in order to pursue your passions and professional ambitions as a business owner. First things first, congratulations! That’s a big and thrilling step.
But, before you get all wrapped up in the excitement of your next career endeavor, you need to make sure you have all of your ducks in a row. While you may be tempted and eager to dive right into your new life as a freelancer or business owner, there are a few things you should take care of before ever leaving your full-time job. Handling these tasks right from the get go will help you to set yourself up for success in the long run—and avoid that stomach in your throat, sweaty palmed feeling of panic when you realize your new career doesn’t bring in enough money to even pay your rent. After all, leaving the comfort and security of your full-time job is scary enough without that added pressure.
If you’re currently working a traditional full-time job and daydreaming about pursuing the self-employed life, you’re not alone! And, I’m always in favor of going after your goals and doing your own thing. But, here are a few things you should do before kissing that steady paycheck goodbye.
1. Work Your Side Hustle
First things first, you don’t want to take the leap from your full-time job if you don’t have anything in place to catch you. So, prior to turning in your two-week notice, take some time to build up a side business.
Take on different freelance projects and gigs while you’re still working full-time. Yes, this will probably mean some late nights, early mornings, and stressful weekends. But, establishing a client base before shutting the door on your full-time job will help you have some money coming in when you do decide to jump, and will also take some of that pesky anxiety out of your transition.
2. Do Your Research and Form a Plan
As with anything, planning is absolutely crucial. Leaving your full-time job is scary. But, it’s even more frightening if you take the leap and then suddenly realize you bit off more than you can chew.
While you’re still employed at your nine-to-five, dig in and do all of the necessary research to get your questions answered. Figure out what products or services you intend to offer. Determine specific customers you’ll be targeting. Talk with other freelancers or entrepreneurs in your same industry that can tell you about their businesses and their transitions into the self-employed life.
You should also figure out your financial situation while you still have the security blanket (and steady paycheck) of your full-time job. How much money do you need to make in order to survive? And, how much business will you need in order to make that amount? Yes, this can all be a bit of a rude awakening, and even seem a little discouraging. But, it’s an important step. Because, one way or another, the bills need to get paid—full-time job or not.
3. Save Your Pennies
Since we’re talking money, it’s also important that you build up a decent savings cushion before saying “so long” to your full-time position.
Starting your own business is hard. And you should be prepared for the fact that you might not make that much to start with. So, I recommend stashing away at least enough money to cover three months of your living expenses. That way, even if you make nothing your first few months in business, you can at least afford to keep your lights on.
Yes, this might mean sacrificing some shopping trips, vacations, or cocktail nights with your friends. But, it will be well worth it in the long run—especially when you’re not left eating cold beans out of a can in the dark because you neglected to prepare financially.
4. Determine Your Comfort Level with an Unstable Income
Many people become so involved in the thrill of starting their own business that they neglect to ever even think about any potential downsides. If I’m being perfectly honest, I was that exact same way. Sure, maybe you don’t like the rigid schedule or limited vacation days involved with full-time employment. But, that steady paycheck you’ve learned to count on every two weeks? Well, that’s pretty nice.
So, before jumping with both feet, it’s time for some serious self-reflection. Running your own business or working as a freelancer typically means you’re living with a sporadic and inconsistent income. How comfortable are you with that idea? Are you fiscally responsible enough to manage that unpredictable financial situation?
If the mere thought of that makes you more than a little uneasy (let’s face it, it makes everybody at least a little nervous), you might want to reevaluate your plans. Perhaps you’re more comfortable working part-time, and spending the rest of your day working on your business. There are no rules—you just need to find what works best for you!
5. Take Care of Nuts and Bolts
Of course, there are a lot of logistics involved with doing your own thing. And, the worst part about all of those pesky administrative tasks? You’re not getting paid to do them. So, while you’re still earning a steady paycheck from your traditional employment, work on taking care of all of the nuts and bolts necessary to start your business.
Find an accountant that will be able to help you with your taxes, as well as an accounting system that will help you keep your income and expenses organized. Figure out what you’ll do for health insurance. File the paperwork to establish your business entity, such as an LLC. And visit the bank to set up a separate business account.
Some of these tasks will just never be fun. But, getting them crossed off your list while you’re still earning some regular income will make you feel a little less guilty about needing to spend any time on them.
6. Be Prepared to Work
You likely don’t need me to explain this to you, but being self-employed involves some serious hard work and dedication.
When I tell most people that I work for myself out of my home, I can ascertain that most of them think I sit on my couch in my pajamas, binge on Netflix, and occasionally write an email or two. But, the truth is, I work even harder (and longer hours!) than I did when I had a traditional full-time job.
When I first started my business, I was working my fingers to the bone for a pretty paltry amount of money. Yes, it could be a little discouraging. But, you need to use that as your motivation to keep on hustling. So, needless to say, you should be prepared for the fact that doing your own thing is going to involve some serious elbow grease on your part.
There’s no doubt, deciding to quit your full-time job in favor of being self-employed is thrilling. But, it’s also pretty overwhelming and stressful. Luckily, there are a few things you can take care of while you’re still at your full-time job in order to make the transition easier.
Check these things off your list before submitting your two weeks notice, and you’ll be all set up for your future as a successful entrepreneur and business owner! Then, go reward yourself with a pint of Ben and Jerry’s or a bottle of wine. You deserve it.