The Pantagraph, Bloomington, Ill.
WWR Article Summary (tl;dr) Before taking the leap, there are a few things you should get in order before you transition to building your own business.
The Pantagraph, Bloomington, Ill.
Around 27 million people will begin making their living as full-time self-employed workers over the next two years, according to a study conducted by Freshbooks. Most are motivated by a desire to have more control over their professional destinies and to find new directions in their careers.
If you're considering becoming one of the millions who join the ranks of the self-employed, it's important to know what it takes to achieve success as an entrepreneur.
Fortunately, Freshbooks also interviewed workers to get their advice on what it takes to make the transition and successfully build your own business. They offered insight into key steps you may wish to take before becoming self-employed, including the following items to add to your to-do list.
1. Getting your financial life in order When preparing to becoming self-employed, 58% of workers are either saving money or paying off debt. Doing both are essential. It takes time for a business to become profitable, and you may have little income coming in when you first get started. This can make it hard to make ends meet, especially if you're in debt.
Getting rid of high interest consumer debt is key as you don't want to be stuck paying a fortune in credit card interest because you can only make minimum payments. And you definitely don't want to risk being late paying a bill if your income from self-employment falls short.
You also should make certain to have several months of living expenses saved up so you can still afford the essentials, such as housing, food, and transportation. While you likely can cut your costs when working for yourself -- think eliminating a commute and fancy work wardrobe -- having a financial cushion means you won't have to worry as much if your business doesn't produce for you during lean months.
2. Developing your skill set Fifty-two percent of workers indicate they're learning new skills to get ready to become self-employed. This is essential because you'll be doing more than just making products or providing a service -- you'll also have to handle the logistics of running a business.
Since you may not be able to afford to hire much help when you first get started, you'll wear many hats as a budding entrepreneur. You'll have to handle marketing to reach potential customers, accounting to comply with tax obligations and manage financial issues, and sales to convince people to do business with you.
Learning new skills is easier than ever with online courses. You can also look for mentors in your area through organizations such as SCORE, which is a network of volunteer business mentors.
3. Building your customer base If you're building a business in a field you're already working in, you probably have contacts who could turn out to be potential customers. Reaching out to these potential clients is very common among workers preparing to become entrepreneurs -- 45% of workers indicated they've made contacts in preparation for starting a business.
While there's generally nothing wrong with letting your network know you're hanging up your shingle, make certain to check the terms of any employment contract you're currently operating under. If there's a non-compete agreement, you don't want to violate its terms. While there are limits on what non-compete agreements can actually prevent you from doing and not all states enforce them, you still don't want to take a chance of starting your new business while facing legal problems.
4. Getting advice from the experts Since it's hard to create a successful business, one of the best steps you can take is to reach out to those who've accomplished this Herculean task. That's why 42% of workers get advice from others who've started a company in preparation for going out on their own.
You can use tools such as LinkedIn to find businesspeople who might be willing to give you advice and also reach out to your existing network if you know small business owners who've been successful. Small Business Development Centers, or SCORE, which was mentioned above, can also be good places to find professional mentors to help you understand what it takes to make a business succeed.
5. Building your brand on the web Today, building an online brand is essential to becoming successful since so many people find products and services online. Not only will your business need a home on the web, but you should also build your personal brand so you come across as an expert when connecting with potential clients. That's why 36% of workers start working on their personal brands in preparation for becoming an entrepreneur.
Using online networking tools such as those offered through LinkedIn -- including joining groups -- is just the tip of the iceberg when it comes to online branding opportunities. You also can consider creating a blog to share your opinion on industry issues and explore guest posting opportunities on established industry websites.
The more of an online presence you have, the easier it will be for potential clients to find you -- and the more credibility you'll have in their eyes once they do.
Starting a business takes effort Taking all these steps may seem daunting, but it's just the start of the tasks you'll need to do to build a successful company from the ground up. Building your own business is rewarding and enriching and can be financially lucrative, as well. But it's a lot of work, so be sure you're ready before you take the leap.