I’ve read that more than 70 percent of workers report that they’re not satisfied with their career choices. That may sound high — but to be honest, it’s not all that shocking. You put in mad hours, but aren’t any better financially or career-wise. You don’t have a personal connection with the company that you’re working for.
Maybe you just aren’t all that excited about the work you’re doing because it’s unfulfilling, boring, or isn’t putting your talents to good use.
That’s only scratching the surface. Maybe the hours you work aren’t conducive to your lifestyle. Perhaps you work in a toxic environment where micromanagement and bullying rein supreme.
Instead of staying put and dealing this for the next 20 to 30 years, wouldn’t you rather leave that job you hate and start your own business where feel fulfilled, set your own schedule, and create your own culture?
Of course you do!
Before taking that leap to becoming self-employed, here’s some tips on how you can successfully transition from being an employee to owning your boss.
Do You Have That Entrepreneurial Itch?
I don’t want to sugarcoat this. Not everyone is cut-out to be self-employed. Before you tell your boss that you’re leaving to start your own business — start paying close attention to the following signs that you may be an entrepreneur:
- You’re always looking at how you can solve problems. When you find a good one, you then can’t get it out of your head.
- You feel unfulfilled and can’t stand your current job.
- You work harder than your boss.
- People think you’re crazy.
- You have a love-hate relationship with money.
- You’re known to be persistent, restless, and a bit of a control freak.
- You’re a black sheep or college dropout.
- Your passion is infectious.
- Even though you’re confident and dream big, you also know your limits.
- You’re not afraid to lose, even though you want to win.
That is in no way an extensive list — that is totally correct. There can’t be — people are all different.
But this list above covers some of the most obvious signs that you were meant to be self-employed. If you notice these signs, then it’s time to put the wheels in motion.
Are You Making the Right Choice?
You saw the signs. Now what?
If you’re like most of us — you probably have several business ideas. Hopefully you’ve pinned one or two of the idea down.
You still want to take a step back and make sure that you are indeed making the right decision about trying to be self-employed — by asking the following questions:
- What are your motivations? In other words, why do you really want to start your own business? Is it because you hate your job that much or do you have an awesome idea that can change the world?
- What skills and passions do you currently have? Let’s say that you’re passionate about cooking, but it’s always been a hobby. Maybe you could launch a flood blog or your own food truck. Take stock of your situation and determine how you can monetize those skills and passion.
- Will your business actually work? Is there a market? If so, who are your customers and competitors? How much of the industry do you really know? Do your research to make sure your idea is viable.
There are other factors that must be looked at and considered.
- Should you quit your job? You can either leave your job right now or stay there while working on your business on the side. Until your idea has been tested and you know there’s a market, I would suggest holding on to your job. It gives you some financial security until your business gains traction.
- Will it be easy? There’s a misconception that when you’re self-employed you have it made. After all, you can work whenever you like and play by your own rules. The truth is that starting your own business is not easy. Be prepared for long hours, setbacks, and lots of sacrifices.
Be Aware of the Financial Challenges
You believe that you have what it takes to be self-employed and that it’s the right decision.It may be time to become aware of the financial challenges you’ll have to overcome.
- Taxes. Expect to set aside about a third of your income for federal income taxes, state taxes, and Social Security and Medicare taxes.
- Insurance. Before leaving your salaried position, research how much you’re going to have to pay in health insurance. The average monthly premium for an individual in 2017 is around $393 — or higher. For a family usually around $1,021. These are the non-frill plans.
- Paid vacations. You’ll be paying for your own vacations from now-on. Also, when you’re away, you may not be making money.
- Buying a house or car. It can be harder to get a loan when you’re self-employed. Consider making these purchases while still employed at your current job.
- Your retirement. Because of your other financial personalities, you may not be able to contribute to your retirement. Unless your business takes-off, this should be a concern.
Make it Legal
There are several ways that you can form and structure a business:
- Sole proprietorship
- Limited liability company (LLC)
The latter two options are often suggested since they limit your personal liability by creating a business that’s separate from you.
You’ll also need to obtain the proper business licenses and permits from your city, county, and/or state. That may seem overwhelming, but start with your city business office and go from there.
To make sure that you don’t get in trouble with the IRS or legally — find a solid accountant or lawyer to guide you when setting-up your business.
Most importantly, start separating your personal and business finances by opening-up a business bank out and lines of credit at stores and vendors that you’ll be working with.
Set Up Your Business Website and Social Media Accounts
You can generate some buzz about your new business before quitting your job simply by setting-up a business website and social media accounts. This allows you to let the world know all about your product or service. This also gives you a chance to start interacting with your audience.
When picking a domain name, it should be your business name. If not available, then pick something similar. Just remember to keep it short and easy to type.
Once you set-up your website, make sure that it’s registered and trademarked.
Draft a Business Plan
A business plan, as explained in our guide ‘How to Start a Business,’ “is simply a blueprint that will guide your business from the start-up phase through establishment and eventually business growth” by answering the following questions:
- What is the purpose of your business?
- Who are you selling to?
- What are your end goals?
- How will you finance your startup costs?
If you’re a solopreneur or plan on becoming an enterprise level business, you must have business plan. The good news is that your business plan doesn’t have to be too complex.
As long as it “clarifies what you hope to achieve and how you plan to do it, you plan could be jotted down onto the back of a napkin.”
When composing your business plan, focus on the following areas:
- Executive Summary. This is a summary up your entire plan, such as what you want to accomplish and the financing you are looking for.
- Business Description. This is where you describe your business, as well as an overview of the entire industry.
- Marketing Plan. This discusses how you’ll be marketing your product or service.
- Analyze the Competition. This will share the weaknesses and strengths of your competitors and what makes you different.
- Product/Service Description. This section contains more detailed information on what your business will offer.
- Management and Operations. This describes your management team and member responsibilities.
- Finances. This highlights the costs associated with your business, and how long you expect it will take until you turn a profit.
“Again, this doesn’t have to be extremely long or complicated as long as it can assist you in figuring out where your company is headed. You’ll want to show how your company will overcome potential difficulties — and the resources you’ll need to sustain it.”
When starting out, it’s not uncommon for you to found your business through savings. Next comes the credit cards, personal loans, and financial support from friends and family.
You may also want to look into crowdfunding or looking into Small Business Administration (SBA) guaranteed loans.
When you have a ballpark idea on how much it will take you to launch your business, you may want to keep your full-time job and set aside a portion of your salary. This way you’re not borrowing as much money from outside sources.
Take advantage of your current relationships.
Take a moment and review your existing relationships. Are there friends, family, or coworkers that are interested in the products or services you want to offer?
They can become early brand advocates and start spreading the word about your business. Even if they aren’t prospective customers, they may have contacts who would be interested. What’s more, they may even know people who could assist you, such as an accountant, lawyer, or investor who is familiar with your industry.
While you’re still gainfully employed, use every every luncheon, conference, and convention to your advantage. It’s a great opportunity to start networking and gain some early feedback.
Don’t Burn Any Bridges
When the day comes for you to finally quit your job, be a professional about it by following these tips:
- Don’t tell your colleagues when you plan to quit. Your manager should be the first to know.
- Quit in person and not via email or text.
- Give at least two weeks notice.
- Don’t slack off during those final two weeks. Show-up on time and continue to do your job.
- Help train your replacement.
- Write a goodbye letter to your co-workers.
- Show your mentors some gratitude.
- Never bad mouth your former company, boss, or co-workers.
Despite the fact that you can’t stand your current job, and you’re ready to move-on, if you leave the company on good terms you may receive referrals from your colleagues or even turn to your boss for advice.
If you’re former boss started his or her own business and has managed it for years, your could pick their brains for management advice or tips on surviving your first years as a business owner.
Learn From Your Mistakes
Finally, you will make mistakes along the way. Don’t hard on them too long or get frustrated. Instead, learn from these mistakes so that you won’t repeat them again. It will also help you become better at running your own business.