The transition from employee to self-employed can be a frightening one. The vast majority of people have gotten used to functioning as an employee, one part of a larger company which provides guidance and resources. While there is a lot to consider when making the jump from employee to self-employed, careful planning and a realistic approach can ease the transition.
Everyone dreams of pursuing their passion and doing work that creates a sense of fulfillment. One of the things to consider when deciding to take the first step towards self-employment is whether or not it is possible to meet one’s financial needs by doing so. A stay at home mom turned entrepreneur may well be able to make the extra cash she needs to make ends meet, while a sole provider dreaming of a less-than-profitable small business may find himself in trouble.
Assessing financial needs and weighing them against the earning potential for a small business can help determine if this is a feasible path. Don’t forget to consider availability and cost of insurance coverage and other benefits which may have been taken for granted as an employee.
With the basic designs covered, the next step is for an individual to form a plan of action and map out his or her needs and expectations. Consider start-up costs, material and space needs and tax requirements. Visit the U.S. Small Business Administration and learn about different business entities. Set short-term and long-term goals, essentially creating benchmarks by which success (however small) can be measured.
Whether self-employment means offering a product or service or creating a small business and hiring employees, the market needs to be determined. Who will buy this product or service? What is the target market, and how will it be reached? If a client list is already maintained, the transition may be quite simple. If advertising will be required, consult with a publicity specialist or determine a marketing budget so there are no unpleasant surprises later.
By approaching small business ownership and self-employment in a logical, well thought out manner, a former employee has a better chance of succeeding as an entrepreneur. Talent and knowledge are an important basis for success, however a business plan and realistic expectations are what takes a dream and makes it a financially sound small business.
