Making the decision to work for yourself is one of the most life-changing choices you may ever have to make. Starting a new business, freelancing or consulting means you will no longer have a steady paycheck and you are
now responsible for every decision, good or bad.
Basically, the buck will stop with you. There will be no upper management line to assist with complications, no colleagues to share the blame with either. You need to deal with the problems that arise, and must be ready to face the consequences of poor judgment calls. Whilst there are many pitfalls to running the show, by contrast there are also times of extreme satisfaction, personal achievement and of course financial rewards.
Several important issues need careful consideration by anyone thinking of becoming self-employed. Choosing your field of expertise is probably the most important step. You may be good at doing more than one thing, but you need to decide which of your talents is best and most importantly: satisfying. Once you’ve made up your mind to pursue a certain avenue, then you must lay out your plan. This part of the process may be tedious and drawn-out, but a good plan should lead to good results.
Your plan should consider all factors of your business. The money issue is of course one of the priority items to tackle. Before quitting you job, be sure to have enough money to support the family for at least six months. By the time your six month hiatus into self-employment is over, you should have generated enough income to keep going. Your startup capital should come from savings or other sources, loans are an option but not recommended at first.
Once you begin on your own, be sure to get into the “Failure is not an option” mindset. Hard work, dedication and persistence will be the keys to your success. Running a successful business is much more work than most jobs, be prepared for very long hours and weekends.
Accurate bookkeeping is extremely important. Unless you’re an accountant, you should consider hiring one. Fees for filing your required government forms late or incorrectly could add up. Your books need to be in order,
This way you’ll know where you stand financially at all times.
Keeping your business and personal finances separate is the best way to go. Even if you decided not to incorporate, you should open a separate bank account for your business transactions. There are no sinister motives here, it simply makes sense to have a dedicated business account rather than trying to identify and separate transactions from your personal banking details.
Having a good relationship with your banking manager can be an invaluable asset. You will get help, advice and fee reductions from your banking manager as long as you’re honest and respectful. Inform you bank of any financial difficulties and work with them on deciding how to best go about solving these.
Summarizing, the road to self-employment involves these three simple steps:
1. What to do. First decision.
2. How to do it. Planning.
3. Doing it. Hard work, dedication, persistence and good bookkeeping.
Just follow these three steps and your business should prosper. Good luck!