Toronto Mike

How to Eventually Be Your Own Boss

There are many people who like the idea of becoming self-employed because it offers you control over your life, pleasure in what you do to make a living, and the possibility of a good income. The reason most people who like the sound of those benefits don’t take the plunge is simply the concern about financial security. You may feel unfulfilled in your job, but if you know you’re going to be earning a predictable sum of money each month, the idea of taking a chance with your future and ending up worse off or in debt takes the shine off the prospect of being your own boss. The good news is that you don’t have to give up one in order to pursue the other, and here’s how you can start working for yourself without risking your financial security.

Don’t give up your day job!

At least not yet! The key to successful self-employment is not to give up your job and then start working for yourself. First of all, you need to do some planning and preparation to make sure your desired form of self-employment is viable and stands a strong chance of succeeding.

Look at your existing financial situation. To reduce the risk of having a lower income, you should be looking at clearing existing debts while you still have a regular salary, so you don’t have the same financial burden when you do the switch. Concentrate on paying off credit cards and high-interest loans first, because they’ll be costing you the most. By clearing debts you’ll not only cut your expenditure, but you’ll open up resources that you can fall back on if you do hit a sticky patch in the early days.

As part of your financial makeover, check your credit rating and make sure all the facts on record with the credit bureaux are accurate. If there are any discrepancies, contact the credit agency concerned to have the information corrected or updated. Check with all three credit bureaus, Experian, TransUnion, and Equifax, as your ability to borrow in the future is dependant on your credit score.

Paying off debts and getting your finances in order could take a while, so in the meantime, you can be preparing for the work you plan to do. The same principles apply whatever kind of job you’re considering, whether it’s as a self-employed tradesperson like a plumber or gardener, to working from your laptop as a website designer or personal assistant.

You need to know if there’s capacity for your skills in your chosen market, so find out how many gardeners or plumbers there are in your area, or how much work is available in your online industry, and see if there’s space for you to earn a living offering the same services.

If there’s already plenty of people doing the same work, think about how you can make your offer stand out. How could you attract people to choose you over your competitors? It could be the qualifications and achievements you’ve amassed, or it could be that you specialise in a specific niche that no-one else is covering, for example.

Create a business plan that maps out the first three years of your proposed enterprise. You may not need a business plan if you’re going self-employed and not looking to borrow money for a business proposition, but it’s invaluable for helping you calculate what you can realistically earn and how much you’ll need to spend on materials and equipment. While expenses incurred for your work count towards claiming relief on your tax bill, you’ll still need to find the money up front, and you don’t want to be in a position where your cash flow is affected by having to spend on new equipment.

Check all the regulations applicable to your work both federal and local. For instance, if you’re going to be handling food as part of your self-employment, you’ll need to observe the relevant hygiene legislation. There could be many regulations in place covering the work and where you’re doing it, and it’s essential to have all the necessary permits in place before you start.

Once you’ve got everything sorted out, then you take some time to test your plan by starting work on your new venture as a sideline to your day job. By looking for assignments that you can do when you’re not at work, you can get a realistic idea of how successful your idea is likely to be, and make any changes necessary to ensure success. Once you’ve established the viability of your work, then you can make the decision as to when to give up the day job, knowing you can make a good living from being self-employed.

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