There are many paths people take when beginning to freelance or starting a business. Some people are laid off from their primary jobs when they decide to work for themselves. Other people juggle full-time work while they freelance on their own time. Others leave their full-time jobs entirely to focus on developing their own businesses. And some people actually do their own thing from the beginning of their career and never even work for someone else.
My journey was a combination of getting laid off, finding another job and starting my business on the side while I worked in the corporate world and built up the confidence to take the plunge. However you get there, it can be a very scary (and exciting) prospect to consider leaving your job to go out on your own. Based on what I’ve experienced, here are some things you should think about before handing in your resignation.
The most important factor to consider before quitting your job is money. If you have been freelancing on the side, it will probably be easier for you to gauge your financial situation, at least in the short-term. If you are thinking about quitting cold turkey and then working to establish your business, be realistic. It can take months, but usually years, to see a profit from working on your own, so make sure you have enough financial reserves for at least six months of living expenses, 18 months if possible.
And don’t forget about the cost of working for yourself – equipment, software, legal fees, marketing activities, etc.
If you don’t have a spouse or partner with benefits who can claim you as a dependent, you will need to set aside finances to purchase health insurance. This can be extremely costly, and it is sometimes difficult to find adequate coverage at an affordable price.
Even if you don’t have a formal business plan, you should create some kind of written document that outlines what you want to accomplish on your own and how you plan to do it. What will it cost to start your business? How much do you need to make? What products and services will you offer? Who will you be targeting and how will you reach them? How will your services fit into the current market? Where will you work from and when?
It can be a constant struggle to make it work on your own if you do not have the support of your loved ones. If they are on-board, your family members can be your biggest cheerleaders. Make sure they know all of the elements of your plan and agree it is the right time before you go for it.
Do you have a personality that supports self-employment? You will need to be able to focus and keep yourself going, even when you hit a roadblock. You should also be able to effectively work alone, or have a plan for finding a collaborative work environment. Keep in mind that working on your own takes a tremendous amount of discipline. If you aren’t able to complete work and meet deadlines, you will face a difficult time.
Although it seems like there may be a lot working against you when you’re considering working for yourself, it definitely is possible if you put in the time to plan and position yourself for success. And once you take the plunge, and experience the freedom of doing the work you want to do when you want to do it, you will never want to go back to the corporate world.
What path did you take to self-employment? What would you add to this list of considerations?
Image credit: Johnny Magnusson
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