An amazing 70.8% of Americans want to be self-employed, but only 7% actually are. There's obvious dissatisfaction with the traditional 9 to 5 workday, but not enough resources for people to break out of it.
Chances are, you're one of those people frustrated with your office job, and maybe you'd like to strike out on your own. However, you have no clue where to start and don't want to end up in a financial black hole from lack of direction.
If you'd like to be your own boss, then keep reading. I'll give you 6 key tips to becoming self-employed so you don't have anyone to answer to besides yourself.
In This Post:
1. Prepare for the Transition
The most unwise thing to do would be to quit your job without any savings or plans of what to do next. Yes, I know it's tempting to stick it to the man and just leave your job tomorrow, but without a good exit strategy, you're most likely going to fail.
Once you know you want to become self-employed, you have to start making plans for your transition. For example, you'll want to put away more of each paycheck so once you actually quit, you have something to fall back on while you set up your new business. And if it takes longer than you expected to find clients, then you won't have to worry about putting food on the table.
You should also talk to some of your contacts to get the most help possible. They can either help you with business logistics or connect you with potential clients.
If there's any training or certifications you need for your future business, then make sure to do it now, before you quit your current job.
2. Make Sure You Have Enough Money
This doesn't necessarily mean enough of your own money. Most people aren't fortunate enough to have enough money to create a business all on their own. This means loans to start new companies aren't uncommon.
However, do be aware that many banks don't lend money to startups, which can leave you between a rock and a hard place if you apply for a loan and get rejected.
29% of startups fail because they ran out of funds. So make sure if you need extra money from loans, you can secure that. And if you can't, you've got to have a backup plan, or risk failure.
Before you quit your job, take the time to improve your credit score. That way, you'll have a better chance of securing the loans you need for your new business.
3. Find a Business Location
For some self-employed jobs, you won't need to have a physical office. For example, if you want to be a freelance copywriter or IT support, you can usually work outside of your home.
But if you're opening a business that requires some office space, you'll have to scope out retail space before you can proceed. Without knowledge of what your retail space is like, you won't be able to make orders on things like tables, chairs, and other equipment, after all.
4. Get the Necessary Permits and Licenses
While it'd be great if you could just create a business out of nowhere, unfortunately, you'll need to jump through some legal hoops before you can actually start.
First, you need to consider what type of business you want to start. You have a few choices: sole proprietorship, partnership, limited liability company (LLC), or corporation.
Most people go with an LLC or corporation, but you may want to consult with a professional first to make sure you choose the right type for your personal situation.
After that, you'll need to apply for the necessary permits and licenses to operate. For instance, if you're opening a bakery, then you'll probably need to apply for a food license.
Go to your city's business office and make an appointment. They'll be able to advise you on how to proceed to make your self-employed job a reality.
5. Get Workers' Compensation
When you think of workers' compensation, you may think it only applies to employees at a traditional workplace. So you might be disappointed that you can't enjoy such coverage.
However, you'll be surprised (and pleased) to know that there's such thing as self-employed workers comp insurance. Unlike regular workers' comp, this type of insurance doesn't cover all of your employees; instead, it covers just you.
While this may be an extra cost, it'll be worth it should you be unable to work due to illness or injury. This is especially beneficial if you run your business all on your own and have no one to fall back on.
6. Take Advantage of Small Business Apps and Programs
Being your own boss can be tough, especially if you have other employees under you. Trying to do it all on your own is not only impossible, but also unnecessarily stressful.
Take a look around online and see what resources you can take advantage of to streamline everything. For instance, there's Wave (accounting software) and MailChimp (email automation software).
Many of these apps and programs are either free or very affordable, so you'd be losing out if you didn't at least experiment with them.
Be Your Own Boss and Conquer Your Industry
To be your own boss, it can be scary in the beginning. Because you don't have a steady paycheck or insurance to fall back on, you may be anxious about the lack of a safety net,
But the best trade-off of becoming your own boss is you have so much freedom. No longer do you have to answer to a manager, nor do you have to succumb to the constraints of a work schedule.
Considering all these perks of being self-employed, it's worth some uncertainty in the beginning. By using my tips above, you'll have a higher chance of success and less stress!
For more work and financial advice, please take a look at my other blog articles.