When it comes to employment, there are those that love being employed and those that don’t. Some need the stability provided by their day job, whilst other employees dream of working for themselves. They want to set their own hours, pick who they work with and have earnings that aren’t dictated by anyone but themselves.
Those that want to work for themselves, decide on their ideal business model, select their niche and make plans about their next steps and, once they have a clear business plan, are ready to pack in their day job and go it alone – right?
When it comes to making the transition from employed to self-employed, there are a couple of things you need to have in place BEFORE you make that leap. So if you want to know if you’re ready to pack in your day job and go it alone, here are the things you need to have, before you go it alone:
#1: A financial buffer in place
If you want the transition to be a smooth, stress-free one, you need to have a financial safety net. Ideally you’ll have between 3-6 months’ worth of income in your bank account, to ensure your household and living expenses are covered whilst you’re growing your business.
This means you need to have a clear indication of how much money you have going out each month on household expenses – and remember to include additional expenditure your business may accrue too.
#2: A portfolio of work and clients
Whilst you’re still employed in your day job, you have the ideal opportunity to lay the foundations for your own business. Look to build your client base, by working on your days off, evenings and weekends. Once you have a few regular clients, you can ask them for testimonials, as well as using their work in your sample portfolio to gain more clients (with your clients’ permission, of course).
This enables you to build a reputation for yourself and gain valuable experience, as well as possible referrals, before you make the leap to full self-employment.
#3: The legalities covered
Whether you decide to register as a sole-trader or limited company, make sure you have all the legalities in place. Register your self-employment status with HMRC and start keeping accurate financial records. It’s also worth informing your home insurance company of your intentions to go self-employed and work from home – and you may even need to look at your car insurance, if you’re going to be using it for business purposes.
#4: Talk to your employer
Finally, it may also be worth you talking with your employer about your plans to go self-employed, to see if there’s a way you can gradually make the transition. They may be able to help you put a timeline in place, where you gradually cut down your hours working with them. This will give them a clear timescale in order to find and train a suitable replacement for you.
Chatting things through with your employer may also highlight any plans they have that you’re currently not aware of, such as voluntary redundancy or cost savings. They may need to start implementing them and your decision could then be of benefit to them too.
By ensuring you have the above in place, before packing in your day job and going it alone, will make the transition as risk-free and stress-free as possible – leaving you free to focus on growing your business.
Are you working your way towards your self-employment dreams? Did these tips make you feel clearer about your next steps or are there steps you feel should be added to the list? Why not share your thoughts and plans in the comments box below!
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