5 Key Steps to Turning from Employment into Self-Employment

At some point in their lifetime, many employees start thinking about leaving their current employer and becoming a self-employed entrepreneur. Some folks are sick and tired of listening to their managers’ demands, while others come up with original business ideas.

Either way, replacing employment with self-employment is a bold move that requires some serious thinking. And while you’re considering that option, it’s important to take some steps that will ensure a smooth and quick start of your individual business career. In this article, we’re going to discuss those moves.

5 Key Steps to Turning from Employment into Self-Employment

1.  Test the Waters:

Launching a pizza restaurant in a small town in which there are already five similar venues is a waste of money.

As opposed to that, opening a pizza stand next to a university campus is like hitting the bull’s-eye.

The point is that everybody who is thinking about starting a small business needs to feel the pulse of the community they live in.

When we say that you should test the waters, we refer to the degree to which the market in question is saturated with the services/products you’re planning to offer.

On the other hand, people who are planning to leave their full-time job in order to start working on the Internet can’t rely on their surroundings. They need to win over a certain number of clients before they leave their permanent job. That way, they’ll ensure a smooth change from employment to self-employment. You can read some tips on how to land your first client in an article published by Forbes.

As time goes by, they should make an effort to either expand their client list or start working for fewer clients but charge more for their work. 

2.  Work on Networking:

No matter what industry you’re working in, you make some connections. While those of a State Department employee might be different from those of a primary school teacher, every connection can be valuable in your future career.

Because of that, it’s useful to get in touch with people from other companies that you’ve collaborated with over the course of years. If you’ve been in contact with them regardless of work, that’s even better because you can approach them in an informal way and generate some leads for your future work.

Still, check your NDA, if you signed one when you started working for your current employer. If it explicitly says that you can’t work with their clients once you leave the company, make sure to follow the rules.

Nevertheless, those connections can connect you to their connections, which could also be beneficial for your new business. 

3.  Take Care of the Finances:

When you’re a mere employee, you get your paycheck every single week or month. You do you share of work for which you get paid and it’s as simple as it gets.

Leaving that comfort is a double-edged razor but there’s no other way to test your abilities in business reality.

Since you won’t be getting a salary anymore, it’s useful to get familiar with the financial conditions of self-employment.

To cut a long story short, it’s crucial for your professional and personal existence to put some money aside before you quit your full-time job. Experts usually suggest that you save the money that will cover your expenses for at least half a year. These assets will give you enough room to choose the most reliable clients for long-term collaboration.

Also, some businesses are eligible to apply for small business loans. Whether or not you’ll be granted a loan will depend on the field you’re planning to work in and the conditions on the market. If you get rejected by a bank, you can always turn to private investors and funds. 

4.  Learn More About the Taxes:

One of the most preparatory actions on your road to solo entrepreneurship is to register your business.

The simplest and most usual business type for an individual entrepreneur is the sole proprietorship.

If you opt for this form, you and your business are the same, i.e. you aren’t financially separate from your business. It’s important to get to know your tax obligations as a sole proprietor and sort them out on time.

If you live in the USA, don’t wait for April 15 to deal with your taxes. Although it’s the ultimate deadline for handing in tax returns in the US, American business owners need to calculate their taxes quarterly so it’s advisable not to miss those deadlines.

We suggest that you talk to an accountant, so as to make sure that you don’t omit any taxable incomes from your tax return. 

5.  Develop Your Brand:

While it’s clear that it takes years to develop a recognizable brand, you’ll get there sooner if you start off with a clear brand concept.

Thinking in a brand-boosting way includes several things.

First and foremost, you need to be a reliable entrepreneur from day one. Even if you make mistakes, which is something every rookie business owner does, do everything you can to correct them for free. For instance, an e-store owner who brings a flexible return policy is someone who is developing a positive brand.

What’s more, it’s always better to test several visual solutions for a brand before the launch and stick to it. If you’re talented for art, you can try and come up with your own ideas for the logo and brand identity. Moreover, asking professionals to have a look at your brand concept is a smart way to get things done in line with the rules of the trade. For instance, the creative artists from a web design agency in Houston, TA can help you put your ideas to practice.

When you finish the visual aspect of your business, enrich it with a tagline and you’re ready for the big business stage.

Conclusion:

Working for yourself and growing your own business will make you feel proud and eager to achieve more. However, switching from an employee to a business owner is a serious move that requires some detailed planning. From market research and networking to the financial features and branding strategies, developing a business brand is a serious process. We hope that the combo of our tips and your expertise will serve you well during the initial phase of your sole proprietorship. As time goes by, you’ll keep learning and making your business more successful.