Working for somebody else offers a certain level of security. A regular paycheck, health insurance, as well as different benefits and perks are perfectly good reasons to stay within your comfort zone. However, being your own boss provides a greater sense of freedom and purpose despite its fair share of risks. Embarking on an entrepreneurial path is exciting but at the same time challenging, which is why you need a couple of tips on how to make a smooth transition from being an employee to being self-employed.
Prepare yourself thoroughly
Maybe you’re fed up with your day job and the prospect of freeing yourself from the chains of the 9-to-5 rut seems like a solution to all your problems, but a decision to quit requires a great deal of planning and preparation. Don’t forget that you’ll need money until your business idea materializes and starts bringing profit, so keep your regular job until you have everything ready. First of all, do your research about the market, competitors, and a need for the product or service you want to offer. Secondly, crunch numbers and establish how much money you need to start your business. If your savings can’t cover everything, there are affordable fast loans which could help you with funding your venture.
Adjust your mindset
What’s equally important to understand is that a shift from being an employee to becoming a business owner is a tremendous one. No matter how well-prepared you are, you actually don’t know how things will pan out. Risk taking is something that you’ll be doing on a daily basis, which means that you need to adopt that particular courageous frame of mind necessary for making important decisions based on the information you have. This can be a huge stress since both the success and failure of your business are your own responsibility. Instead of waiting for assignments and tasks, you’ll be the one who delegates and manages the workflow.
Forget about the 9-to-5 workday
Sometimes you’ll have to work from 9 to 9. And on weekends. While it’s true that you can come to work later and leave earlier without having to report this to anybody, this doesn’t mean that you’ll have more free time on your hands. Quite the opposite. Your schedule will become even more hectic, especially until you can afford to hire more employees. Business owners have to be jacks of all trades, ready to do everything from customer support to invoicing.
Create a sound business plan
The importance of creating a business plan can’t be stressed enough. This document is essential for giving you a clear sense of direction and helping you manage and grow your business. Some of the basic elements of a business plan include:
- Executive summary, together with your company’s mission and vision statements which will explain what you’re trying to create and what you’re striving for;
- Company description containing key information about your business as well as an explanation about how your products or services will help your target audience and what makes them stand out from the crowd;
- Market analysis, which will provide details about your target industry and discuss how your business fits into that particular market or niche;
- Competitive analysis, which will list your competitors and compare how your business stacks up against them;
- Management description with information about the members of your management team;
- Description of your products and services;
- Marketing and sales plans;
Polish your financial skills
Did you know that as much as 82% of startups fail because of cash flow problems? It’s important to keep track of your financial records if you want your business to thrive. However, many entrepreneurs aren’t exactly financial wizards which is why it’s a good idea to hire a reliable accountant who will keep things under control and prevent potential legal issues. Still, it’s important for you to educate yourself in this department because financial literacy can help you run your business and seize the opportunities that come along.
Create a reliable team
Many startups and SMBs start out small and they’re usually one-man-band ventures. But this burden of responsibility can be very heavy and sometimes it’s important to have people who can pick up the slack, give you new ideas, or simply perform some minor tasks while you focus on decision making. At first, these people can be your friends and family members, but as your business grows, it’s important to start thinking about creating a team of professionals capable of taking on part of your responsibilities and help you manage the company.
The most important thing when it comes to making a transition from being an employee to becoming a business owner is that at first, you’ll have to work more and earn less until your company starts making a profit. So, always hope for the best, be prepared for the worst case scenario, and never give up.