How to make the jump from Corporate Job to Self Employment?
First of all, you need to really think about why you want to leave a corporate job, really think. Is it so you can enjoy a better work/life balance? Maybe you have young children and want to balance looking after them with earning money from home. Perhaps it is because you have read books like Tim Ferris 4hr Work Week and dream of emulating this. Whichever reason it is, you need to really think about it and whether you absolutely want to follow this path because once you make the decision you will need something to mentally cling too when times are tough.
The next consideration is your current financial state along with family commitments. If you are in your early twenties and still living at home, this will be easier than if you are married with children. If this is the case you will need to have honest discussions with your spouse and look at all of the financial ramifications and risks because the guaranteed monthly income stops the second that you make the jump. In general, it is a good idea to have enough cash stored away in a bank account to cover at least three to six months living expenses.
So you have made the decision to go self employed, have ticked all of the financial boxes and your spouse has agreed to support the decision, the next step should be to try to start doing the role you wish to do full time outside of your normal day job i.e. evenings and weekends. If you want to be a self employed Accountant, maybe look for a small company and offer to look after their books for them, for a fee of course! If you are a Graphic designer take on some Freelance work locally or by bidding for jobs on websites such as Freelancer.com and elance.com. The main goal here is to test the market to see if self employment really is for you and to start growing a client base to leverage off of once the final jump is made.
As you start to bring on clients it is a good idea to open a Business Bank Account. Most banks these days are aware that many people run businesses after hours and have options to cater for this. Talk to your Banker to discuss what the best option is for you. Options to look for include;
Flexible pricing options
Free online invoicing, book keeping and payroll services
Credit and Debit card options
Now that you have this account set up ensure that these banking details are on all invoices so that clients can pay directly into it. Once the money is there, do not touch it as it will become your safety net for when you do make the decision to quit your Corporate job.
You will need to start to look at marketing yourself at this point, as the ultimate goal is to have enough clients that you have a negligible drop in income at the time of the jump, so create a basic website using Wordpress, or get someone to do it for you. Have business cards made. Attend networking events. Profile your target market and potential clients and then find people like them and offer your services. Often you will have to price yourself below your goal rate, this is fine for now, the goal is to build a track record and client base.
All of these steps could take between a few weeks to a year depending on how much time you can assign to the process and how committed you are to it. Either way you will eventually have to make the jump and be mentally ready for it. Once you do make it what can you expect?
Be prepared not to make budget for a few months. When you have a full time job it can be very easy to over estimate your earning potential. This is probably the single biggest mistake people taking the jump make. If you are prepared for the potential disappointment then you will cope a lot easier.
You will have to deal with the first payday where you don't get paid. For your career so far, you will, have been, used to, money magically arriving in your bank account on a set day of the month. This no longer exists and you need to be prepared for this day as it is a wake up call that you are now in control of your earnings.
Expect to be overwhelmed by time management issues. You will suddenly have to balance between Sales and Marketing (of yourself to new clients), doing the billable work that make you money, family time, visiting vendors and service providers, and unexpected downtime. The single easiest way to deal with this is to make a weekly and daily to do sheet as this will allow you to see exactly how you need to balance your week. Once you have done this stick to it. Also turn off your phone, e-mail, and social media feeds while you are doing billable work as you can then focus.
Expect the unexpected. It will happen and how you deal with it will set the tone for any success or failures going forward so learn to roll with the punches.
Seek out advice from others. You are not alone in this journey so seek out others who are also going through or have gone through similar processes even if it is just reading a book on a famous business person. It will help.
Accept that your goal of surfing or riding your Mountain Bike each afternoon will not happen for at least six months unless you are lucky. If this is your goal rethink it as you will be working harder than ever now.
Most of all enjoy the liberating process of being your own boss, it is a tough but ultimately rewarding lifestyle.
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Edited by: Rajesh Bihani ( Find me on Google+ )