Nowadays the term “entrepreneur” is part of our normal vocabulary, but no one striking out on their own becomes an overnight success. If you’re thinking about pursuing self-employment and running your own company, here are five ways to properly prepare yourself for setting out on your own.
DO YOUR HOMEWORK
Self-employment is not for the faint of heart. If you are committed to pursuing the pros of working for yourself, you also have to be hyper-aware of the cons. As you contemplate leaving the financial stability of your corporate job, begin to evaluate the added stresses that come with being a company that is a party of one. For example, I thought critically about having to pay a very expensive health insurance bill every month where previously health insurance had somewhat silently been deducted from every paycheck.
I determined that the stress of that monthly payment would be more worthwhile than the stress I was feeling from my corporate gig where I was feeling unchallenged and unfulfilled. I also looked at what I would be doing from a day-to-day basis that couldn’t be covered by a team. I’d be offering clients my services from the ground up and they’d all be handled by me - no delegating up or down on a team. By thoroughly researching what your new normal will look like, you’ll be in for less of a shock when you become accountable only to yourself.
By far the most valuable thing I did in preparing for self-employment was tapping into my network. I began seeding to my friends, family and acquaintances that I was planning to leave my job to consult and one by one my network grew.
Everyone wanted to put me in touch with someone who’d had the courage to do what I was planning to do. I began speaking to loads of other freelancers and consultants and I came prepared to every meeting with a list of questions. Every encounter held a powerful and helpful takeaway and the more people I spoke with, the more my network expanded and the more business leads I started to pull in. Those I spoke with also were incredibly valuable when it came to setting the costs for my services, determining what tools I’d need to invest in and helping to provide guidance on how to successfully manage my business.
GET ORGANIZED OPERATIONALLY
There’s a lot that goes into operating your own business and some of the things may even surprise you. Before you leave your job for the land of self-employment, I recommend starting to get the pieces of the operational puzzle in place. One of the first steps I took was finding a lawyer who could incorporate my business. Then I set up a business banking account so I had a checking and a savings account for the company and also a credit card for all expenses. I got set up on Quickbooks to run the financial side of my business and also built a forecast so I was setting goals for myself to meet from a revenue standpoint.
"Before you leave your job for the land of self-employment get the pieces of the operational puzzle in place."
Next came working with my lawyer to draft contracts and other necessary paperwork I would need to run my business from a client services perspective. I also developed a capabilities deck I could send to prospective clients, built a website, ordered business cards and developed a list of companies I was interested in speaking with. Once everything was done prior to leaving my job, it was easy to hit the ground running pursuing business because I had prepared all of my operational to-dos.
Before you commence self-employment, you have to first accept that you won’t know from where your next paycheck is coming. Which translates to having to prepare financially for those inevitable times that you won’t have steady pay coming in. Knowing I lived in the most expensive city in the world, I put pen to paper to determine what living in New York was really costing me every month in regards to expenses. I signed up for a Mint.com account to build out a budget and for two months tracked my expenses. Once I had an idea of averages in particular categories, I built out an expense worksheet for myself that included rent, health insurance, groceries, travel, utilities, etc. I knew I wanted to have whatever that number was per month times six saved before I pulled the plug on my corporate job so that when the time came to dip into savings, I felt OK doing so.
Do the math and start saving accordingly before you up and leave your job. You’ll be far better off down the line for having done so.
THINK LONG TERM
When you begin working for yourself you’ll feel like you need to say yes to whatever initial projects come your way because you fear the unknown. But when you accept projects or clients that you don’t feel passionate about, you’re defeating one of the best perks of being your own boss: the ability to say no. While you certainly need to pay your bills, you shouldn’t take on work that you don’t feel capable of delivering on or for people or brands that don’t make you feel invested in the work. If you begin to take on projects you’re not jazzed about, you are limiting the hours you have a month to pursue and accept jobs that will not only give you income but also fulfillment.
Meghan Donovan is the founder of mmd communications, a public relations and influencer marketing agency in New York City helping to elevate lifestyle brands with dynamic, meaningful ideas. In addition to her decade of experience in the marketing industry for major brands like Procter & Gamble and Virgin America, she also pens the popular life + style site, wit & whimsy. You can read more about her journey to self-employment here.