How to prepare for self-employment
How to prepare for self-employment
There’s a certain allure that comes from running your own business and working for yourself. We’ve all been seduced by the supposed freedom that comes from this type of work and self-employment is regularly touted as the surest way to riches. The media glorifies this hustle and grind and it seems like everyone and their cat calls themselves an ‘entrepreneur’ nowadays!
Look, I get it.
This narrative isn’t wrong, per se, but the truth is that self-employment is also incredibly challenging, exhausting and exhilarating. The highs are higher and the lows are lower, which is undoubtedly part of the thrill.
If you’ve spent even a hot sec on an inspirational entrepreneurship Instagram account, you’ve come across the quote “Entrepreneurship is living a few years of your life like most people won’t, so that you can spend the rest of your life like most people can’t.”
I’ve built my business to a stable and profitable place, but in all honesty I got here by trial and error. Looking back, there were definitely ways that I could have prepared ahead of time so that when I started out on my own, it wouldn’t have been so daunting and touch-and-go.
Today I’m sharing 5 tips for anyone who is considering making the leap into self-employment.
Whether you plan to start a services-based business or sell products (physical or digital), I hope that these suggestions give you something to think about before taking the plunge.
Let’s take a look, shall we?
1. Get crystal clear about how you’re going to earn money
I’m frankly blown away by how many people quit their stable jobs and decide to “wing it” in self-employment. These delusional hunnies hope that money-making opportunities will magically fall into their laps - but the truth is business doesn’t work that way.
I saw this several times at my co-working space in Bali and it drove me nuts. These well-intentioned people wanted to call themselves an entrepreneur/founder of an online business- yet they had no actual idea how to bring in the $$$! They would bounce about from one business idea to another without making any real progress, then start freaking out because their savings were dwindling. Many of them defaulted to unskilled, low-paying work to just scrape by. It sucked to watch.
If you're considering self-employment, I strongly suggest that you figure out and get super clear on what services/products you’re going to offer and how you’ll price them out. DUH, right?
Niche down, identify your ideal client and how you’ll serve them, and price according to value.
Let’s look at a few examples:
A web designer could offer custom website packages AND custom website + branding packages
A copywriter could specialize in email marketing, content upgrades, website copy, etc.
A social media manager might offer software setup, post creation, analytics & reporting, etc.
It’s not enough to say that you want to work for yourself - you need to figure out what type of work you want to do, who you want to do it for, and what you’ll offer and how you’ll price it.
Related : 6 ways to totally WOW your clients
2. Know your expenses
Before you even think about self-employment, you MUST know what your current expenses are and how that will/might change if you make the switch.
Open up your bank statements and go over your previous 3 months’ expenses to get a feel for what your lifestyle costs and how much you spend every month. Consider obvious expenses (rent, phone, internet, groceries, insurance, transportation, entertainment, etc.) but don’t forget about all the little things that add up too!
Once you have an idea of how much you need to live off of every month, the next step is to predict any potential business expenses you’ll have to cover on top of that. For example, you might have to purchase a domain, pay for Squarespace hosting, email marketing tools, social media scheduler, a photographer to take your brand photos, a graphic designer to create various materials, tech, software (e.g., Zoom, Freshbooks), a co-working space, etc.
It’s totally normal to scale back your personal expenses during the first few months of self-employment, but you still need to know what your earnings have to be in order to break even. And that’s just the bare minimum! We aren’t doing this just to scrape by.
Shameless plug : My Income Tracker Spreadsheets are a godsend and will help you get an understanding of your expenses. Take a look, watch the video tutorial and see if this resource is a good fit for you!
3. Network like crazy
One of the most valuable and under-appreciated ways that you can prepare for self-employment is to tap into your network. Seriously, shout your plans from the rooftop and tell anyone under the sun that you’re starting up a new business venture! Spread the word to your friends, family, acquaintances, neighbours, former co-workers, social media followers, the cutie at your gym, literally everyone.
I recommend doing this before you actually leave your 9-5 if at all possible because it gives you time to get the word out prior to making the switch.
Remember that people want you to succeed and they will want to put you in touch with other people they know who might be able to help you out. These people might already be self-employed or support themselves in-part with a freelance business - either way, they’ll have plenty of insights to share with a newbie like you.
Accept these introductions and follow up with meetings!
It takes a huge amount of courage to branch out on your own in business so you will get a lot out of the conversations.
When I did became self-employed, I made a list of questions I could ask these new connections and I was able to get super valuable takeaways, pointers and actionable advice out of each meeting.
It’s also helpful to think of networking as a numbers game: the more people you speak with, the more your network will grow, and the more business leads you’ll get. It’s possible that these intros will end up being clients, but the more likely outcome is that these new contacts will recommend you to people in their larger network who will be your new clients/customers.
4. Plan out your finances
Once you know your expenses and how you’re going to make money with your new business, the next step is to come up with a PLAN of how you’re going to earn the income you want. Here are a few examples with totally made-up numbers:
You’re going to offer web design services that will cost $3,000 when you start out. If your goal is to make $6,000/month, you’ll need to book 2 custom website packages each month. Check out this post for more inspiration related to this particular example.
As a social media manager, your new Instagram packages will be $200/5 posts. If your goal is to earn $5,000/month, you’ll have to book 25 packages every month. If the average customer purchases 2 of these packages each month, it means you’ll have to secure 12-13 clients each month.
You’re going to be a copywriter who specializes in email campaigns for wellness clients. If your goal is to make $5000/month and each 7-part email campaign package is priced at $500, you’ll have to sell 10 of these packages every month to reach your goal.
Planning out your projected business income is crazy important because it will give you an idea of what numbers you need to hit in order to reach your business goals. I can’t emphasize this enough!!
You will probably start off with your income plan by looking at the numbers on a monthly basis but don’t forget to consider the year as a whole. Pull out your calendar and block off any time that you might need/want to take off. Consider weddings, holidays, birthdays, conferences, etc. that might get in the way of regular work time. If, for example, you want to take two weeks off at Christmas, how will that change your work load in December? Will you still be able to bring in the same amount of money that month or will you plan to earn only half your normal income? Will you work extra before/after to make up for that time off? Have a leaner month?
There’s a lot to consider here and even though it can be stressful, your business will be much better off if you have a financial plan.
5. Start before you’re ready
My friend, it pays to be brave! Take imperfect action! Course-correct and pivot as you go!
You will never feel 100% confident in this decision yet at some point you’ll have prepped as well as you can. It’s time to get started and do the dang thing already.
You’ve got this!
Learn by doing and let experience be your teacher. Refine your offerings as you improve, raise your rates, release new & improved versions of your product - change is normal and should always be expected in the self-employed world.
Obviously I don’t suggest quitting your job and becoming self-employed on a whim - that will most likely end in disaster - but if it’s something you’re seriously considering, I’m here to be your biggest cheerleader.
Jump right in and START already!
Self-employment is a wild ride but I firmly believe that anyone who is interested in this type of work can be successful with a bit of planning.
Most people who have been able to build successful business aren’t any smarter or more skilled than you - they just had the gumption and tenacity to give it a shot.
Self-employment is terrifying at times but it’s also a whole lot of FUN. You’ll be your own boss, decide exactly what kind of work you want to do, who you want to work with, set your own schedule and the sky is the limit when it comes to how much money you can earn.
If you’ve been thinking about making the switch to self-employment, know that it’s totally possible to thrive in business! Be smart, plan for success, and be realistic about how you’re going to rake in that cash money. If I can do it, you can too!
I’ve written lots of blog posts about my own business and tips to I share with fellow freelancers, and you can read more of those Business posts here.
Now it’s your turn to tell me, are you self-employed? Do you work as a freelancer? Run your own business? How has your experience been so far? Any big lessons learned that you can share? Is self-employment something you’re interested in? I’d love to know so leave me a note in the comments below!
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