The dream of being their boss is alive in many people’s hearts. They want to break free of their office desks and do the work that they want. Fortunately, the world’s economy has shifted and allowed for more people to reach for this dream. But it isn’t easy. Here are some tips on what you should do to become self-employed.
Know What You Want To Do
The first step is to have a plan on how you will be self-employed. This includes what exactly you will be offering, how you will get paid, who your clients are, and more. It is pretty much a business plan since you will be running a business, with yourself as a boss. There are a couple of options available. One option is for your self-employment to come in the form of being a freelance professional. For example, you might be good at accounting and tracking cash flows; then you might go into CFO consulting. Freelance services like this are common, and many businesses use them if they can’t afford a full-time person for the job. Another choice is to start your own business where you become the boss, and you start employing others. This is a much more difficult approach since you will have to worry about others. A good middle-ground is running a business all on your own, which is a popular choice nowadays.
Prepare For Your Move
It would be best if you didn’t jump into self-employment immediately. Now that you have an idea of what you plan to do, you should be laying down the foundations of your move into self-employment. The most important one is to build up your savings. When you move to self-employment, you won’t have a regular paycheck. This means unless you start earning money quickly, you will struggle to pay your bills. Having several months of savings can help reduce your worries.
Besides savings, you should start planning to live frugally. You’ll need to shift to a tighter budget until more money comes in. Set up a budget so that your savings will last longer.
Start While Employed
Another way to prepare is to start your business while you are employed if possible. For example, if your new business is to become a caterer or a chef, start offering one-off services. Cook up a few batches of cookies and sell them at work. Another possibility is to occasionally cater a party on your own. While providing you with extra funds to prepare for going full-time, it also allows you the chance to test if you can handle things. Be aware that additional work can slow you down, so be smart on what jobs you take so you don’t burn out.
This early start to your business can also help you score permanent clients. Ensure that you put your best foot forward so that they can come back later or recommend you to others.
Be Sure That You Pay Your Taxes
One frequent mistake the self-employed often make is that they skip out on taxes. While it is easy to go under-the-radar when you start freelancing, the tax office will start to notice you when you become more successful. You don’t want to end up paying back taxes. Register yourself as self-employed and keep track of your payments and invoices. It would be best if you also track your expenses. From these, you should be able to calculate your taxes easily. If you are not sure about your tax obligations, you might want to contact an accountant so that the work is accurate.
Have An Exit Plan
No one wants to think about it, but not everyone will succeed in their self-employment. It would be best if you acknowledged it might be you by having an exit plan. This ensures that you can come out of this experience financially fine. There are several components to this. For one, you need to know whether it is time to give up. The usual sign is that you are not earning money. But that is common from the beginning, so the better choice is a savings level. If your savings dip that low, you might need to go back to formal employment. If you do need to do that, you should have an idea of what industry to join and how to present your self-employment as a learning experience.
Self-employment is a noble goal, but it has its risks. Many people have tried to go on their own but ended up returning to office work because of the safety net it provides. For those who are successful, it can be a rewarding experience both in terms of monetary compensation and personal fulfillment. The tips above should help in your attempt and hopefully ensure your future success.