Most people look with envy upon those who have managed to become self-employed. Imagining that they are carefree and can do whatever they want in life. Nothing could be further from the truth in the day-to-day realities of self-employment. Most people who do it would not trade it for anything. However, the ones who stick with it are typically the ones who simply cannot imagine a life dictated by someone else’s schedule or expectations.
You may not be the type who can withstand the constant pressure and responsibility for steering the course of your own destiny, though. Read on for some things to consider when making the important choice of whether to become a self-employed person.
Do you have a business plan?
Start by creating a business plan, so that you can see the realities of what will be required to get started and to succeed. The idea of being self-employed is often romanticized so much that people don’t stop to consider the realities. When making your plan, decide realistically whether you will be able to pay yourself a salary for the first year. If not, are you willing and able to do without income for that long? It is easy to just “worry about that later,” but later will be up in your face before you barely get started.
Struggling financially is normal, but it can also cause you to lose sleep and be unable to function well. It can also ruin your credit score and keep you from getting loans or services that you may need to survive or grow your business.
If you want to learn how to start a business the right way, check out ENTRE Institute. They have a great jumpstart program to help you put all the pieces in place to start your business. They offer mentoring, over the shoulder trainings, as well as peer and one on one coaching.
What is your business all about? Become a self-employed expert
Decide exactly what your business will be and whether you will specialize in any aspect of the field. Wisdom dictates that those who specialize will distinguish themselves in important ways that can lead to overall success. Find out if you need specific licenses and permits if you will be working out of your home. Apply well in advance in case you encounter obstacles or if neighbors object to your proposed business.
Are you prepared for the tax impact of being self-employed?
Remember that you will be subject to extra taxes when you are self-employed. These can include paying both the employer and employee share of social security taxes, as well as any taxes levied by your own state or city. Some states have “use taxes” for using your own equipment, or taxes related to the specific type of business you have. Find out what these are and incorporate this expense into your feasibility plan.
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Are you keeping your personal life and work life separate?
Always have a dedicated space for working, regardless of what your occupation is. Even if you move out of that space often and work in other parts of your house, do not make the mistake of merging the two spaces completely. You need a life outside of your work, and your family does not need to constantly be subjected to business conversations or other things that could cause stress or make you seem unavailable to them. If you do not have a separate space for working, then look at other options outside of the home. Being self-employed will only work if you do it right. You need to draw the lines before you ever get tempted to cross them.
So, are you ready for self-employment?
Think about these things when determining if self-employment is right for you. Whether you have to personality and the skills to approach it in ways that lead to success. Whatever decision you make will be well-informed if you take the time to give it careful consideration.
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