Many people currently in full-time employment have their hearts set on setting up their own business and being self-employed. If the idea of working for yourself excites you and you have a business idea you’d like to pursue, you probably want to ditch the 9-5 and get started straight away.
However, before you take the plunge you need to make sure you will be able to support yourself financially. It’s impossible to completely eliminate risk when you’re starting your own business, but you can cushion yourself to ensure you’re as financially stable as possible.
Consider Going Part-time First
If it feels too risky to leave your day job straight away and jump in with both feet, you may want to consider a slow transition from employment to self-employment. Rather than quitting your job and starting on day one with no income coming in, could you reduce your hours at your job to part-time? This would give you a little more spare time to dedicate to your new venture, but still give you a guaranteed income until you’re able to go it alone full-time.
Dos and Don’ts of Switching From Employment to Self-employment
- Do as much as you can in the early days to prepare you to hit the ground running – for example set up your website, social media accounts, business bank account, and so on.
- Do continue to dedicate yourself to your full-time job while you are in the office
- Don’t carry out activities related to your own business in the office, or use your employer’s resources for your own business
- Don’t compete against your employer while you still work for them
- Do check your contract for a non-compete clause, which may apply for a few months after you have left the business
How A Business Plan Can Help You Make the Transition to Self-employment
By writing your business plan, you will be able to see exactly what you need to achieve to fulfil your dream of working for yourself. Start by breaking everything down into achievable chunks. How much money would you need to earn per year in order to support yourself? Will you be spending more or less money on certain things than you would if you were self-employed? For example, your travel costs may increase if you need to drive to more client meetings, or it might decrease if you will be working from home. Find that yearly figure, and then find out how much money that would be per month, per week, and per day. Once you have your daily figure, the prospect of working for yourself full-time should feel a little more achievable, and less overwhelming.
When you’ve done this, think about how you’re going to achieve that daily target. Where is your revenue coming from – do you have multiple revenue streams? For example, if you’re planning on setting up your own ecommerce business, your revenue may come from selling your own products and also from advertising or affiliate marketing. Separate these two revenue streams and look at each of them practically. What steps are you going to take in the first week, month, and year, to increase your profits from these streams? Your business plan should help you to figure out all of this.
Don’t forget to factor in your business costs, too, and be as realistic as possible. How much will you be spending, and what do you anticipate your profit to be? Meticulous planning will make you feel more confident and focused, and when you provide yourself with a step-by-step guide, you will be able to achieve more.
The financial risk of moving from employment to self-employment can’t be avoided completely, but it can be mitigated with some careful planning. If you’re thinking about making the leap and you need a little help with writing a business plan, we can help. To take the next step towards growing a successful business you can call your own, get in touch with cbm online or call 01604 420 420.