Have you recently been “downsized” because you are no longer “economically viable“? Or maybe you’re just sick and tired of being sick and tired and want to take the steps necessary to fire your boss once and for all! Either way, you’ll probably need some sound advice on becoming self employed.
There are a number of things to consider depending on which path you take to self employment.
- Marketable Skills
- Start Up Costs
- How Long You Can Maintain Without Income
- Type Of Business Entity (LLC, C-Corp, etc.)
Getting Paid For What You Know
Many people possess skills that they could easily build a business around by cutting out the middle man (the boss). Most people will never capitalize on their skills because, let’s face it, it’s easier to put time in at a job than it is to build a business. If you find yourself in this situation and have decided it’s time to go out on your own, here are a few things to consider.
- Evaluate any skills you have that you can offer directly to the public or to another business. Take your time and really think about everything you can offer. You may have idea’s that you boss (or former boss) wouldn’t even consider.
- Learn all you can about your market and your potential clients. Is there a need for a specialized service within your industry that others seem to be overlooking? These are where some of the biggest opportunities can be found for new entrepreneurs!
- Be willing to put your services to the test. It can be tough to break into a market when you have no previous clients to speak of. If this turns out to be the case for you, you may have to offer a freebie. Yes, working for free sucks, but sometimes that’s what it takes to get the ball rolling.
What If I Have No Marketable Skills?
Not all acquired job skills are useful for becoming self employed. I can certainly relate to this. I grew up in the North East and never pursued a formal education. That seemed to have doomed me to a life of physical labor and factory work. I was a good factory worker, but my skills weren’t marketable to anyone outside of other factory owners!
I found that I needed to learn a whole new set of skills if I was going free myself from the shackles of employment and make my own way in the world. This created a whole new set of challenges however.
- What Industry Do I Want To Work In?
- What Skills Do I Need To Acquire?
- Where Will I Acquire Those Skills?
How you answer the first question can have a huge impact on how you answer the next two.
- Do You Need A Degree, Or Can You Get By With Just A Certification?
- Is Either One Of Those Even Necessary?
- Do You Have The Time Or Financial Resources (or both) To Pursue A Formal Education?
These are not always easy questions but they are important to consider. Due to my personality type, I am often plagued with agonizing bouts of indecision. It took me many years to find a path that ultimately worked out for me.
Can You Afford To Start A Business?
So, your plan is in place and you’re ready to stake your claim and get your share of the pie. Great! Now, you’ll want to make sure that you have everything you need to make your move. Some of the costs that my be incurred when starting a new business may include:
- Entity Selection
- Registering Your Business
The first three items on this list are not always necessary. However, if there is any chance that you could potentially be sued, you should strongly consider protecting your personal assets by operating through a business entity.
Marketing your business is NOT optional. In fact, it may be the most important aspect of your business! This doesn’t have to cost a fortune when you’re just starting out. Some of the more economical methods of marketing are:
- Business Cards
- Website (Don’t overlook this!)
- Word Of Mouth (The best kind of advertising!)
Make free flyers at postermywall.com
Get 250 business cards for $10 at vistaprint.com
Get 2 free websites and video tutorials to get it setup here
And of course, don’t forget about social media.
Should You Quit Your Job Or Start A Business On The Side?
This is a BIG one! A decision that cannot be taken lightly. If you rely on income from a job to survive from week to week, giving that up to venture out on your own can be extremely risky.
Many new businesses can take six months to a year to become profitable. There are always exceptions to this but you must be sure that you are one of those exceptions before you quit your job without enough cash put away to cover living expenses while you build your business.
If you cannot predict with any kind of certainty when you may be become profitable, starting a side business is probably the safer way to go. In fact, many big businesses where started by people who worked on their business in their spare time.
How Can I Build A Business When I Work During Regular Business Hours?
This is one of those “catch 22’s” that prevents so many from going out on their own. Some businesses are restricted to certain hours of operation. How do you start a 9 to 5 type business when you’re already working 9 to 5? This can be challenging but it is NOT insurmountable! It just requires a little resourcefulness.
For example: Are you planning to start a service type business where you will be working with clients? There are no rules that say you can’t start prospecting for clients before your business is officially launched. If you learn to properly market your business online, you may even have clients looking for you!
In fact, it isn’t too uncommon for people to get a payment from a client up front and use that money to fund some of their start-up costs. For an entrepreneur, the work begins before there even is a business. Lining up clients is part of that work.
Do I Need To Form A Corporation?
The forming of a corporation can be a complicated subject. It is advisable to consult with an Attorney for this one. As I’ve previously mentioned, they can be useful for keeping your personal assets away from the prying eye’s (and hands) of some lawsuit happy, disgruntled client. There are also many tax advantages to incorporating.
There are many business models that will work perfectly well with a sole proprietorship. They are the easiest types of businesses to setup and operate and no red tape to deal with.
If you are relying on your fist payment from a client to get your business officially launched, you can always print out a client agreement which is worded in a way to insulate yourself from lawsuits.
To learn some of the many advantages to forming a corporation, I would highly recommend the book, Own Your Own Corporation by Garret Sutton Esq.