Want to know how to become self-employed? There are plenty of jobs, careers, and home business ideas out there for you to explore.
Since I became self-employed, I’ve been really happy. But I don’t want to give the impression that it’s all smooth sailing. Becoming self-employed involves a lot of hard work and there are many steps to take before you can leave your current job.
There’s no single “right” way to transition to self-employment; everyone’s path is a bit different. However, if you take your time and prepare well, the transition can be much smoother.
Here are some steps to help you get started on your journey to self-employment:
1. **Start Your Business on the Side**
Begin your business while still working your full-time job. This way, you can test if it’s something you really want to do and if it’s a viable way to earn an income. It also reduces stress since you’ll have some business momentum before leaving your stable job. For example, I worked on my business for about two years before making the leap. Consider:
– What kind of business you’ll start.
– How you’ll make money and if it’s sustainable.
– Trying to live off your business income to see if it’s feasible.
– Learning about taxes, health insurance, and other behind-the-scenes stuff.
– What equipment and space you’ll need.
2. **Consider the Loss of Job Benefits**
Think about the benefits you currently have, like health insurance, life insurance, retirement plans, and daycare. Research and price these out now to get a better idea of your self-employment budget.
3. **Create an Emergency Fund**
An emergency fund is crucial when working for yourself. It can help during bad months or if you decide to pivot your business. This fund will reduce stress and prevent financial issues from negatively impacting your business.
4. **Have a Backup Plan**
While some may see a backup plan as a lack of faith, it’s a smart idea. It can help if your business doesn’t go as planned or if you find that self-employment isn’t for you. A backup plan can make you feel less stuck if things don’t work out.
5. **Understand Taxes and Legalities**
Make sure you understand the tax implications and legal aspects of running a business. Many new self-employed individuals underestimate their taxes. Do your research or consult a professional, like an accountant or lawyer, to ensure you’re prepared.
6. **Leave Your Day Job**
This is the big step. When you feel ready, plan the right way to leave your job, set a final workday, and give your notice.
Good luck with your business journey!