Quitting your 9-to-5 and becoming your own boss has become the holy grail of the 21st century. While there are definitely many perks that come with being self-employed, there are also plenty of obstacles.The most important thing to consider for this transition, is that you’re looking out for stressors just as much as you are opportunities.
This article will examine self-employment from different angles, giving a rundown of the key questions to ask yourself before becoming your own boss and what advantages and disadvantages are in store for you. If you’re still eager to make the jump, then there’s also a list of things to do before you start the journey.
Table of Contents
Caution: Entering Solopreneur Territory
Do you have a plan?
Does it fit your lifestyle?
Where does your motivation lie?
Can you afford to pull the plug on your 9-to-5?
Are you good with finances?
The Pros and Cons of Being Your Own Boss
Things to Do Before You Become Self-Employed
#1. Analyze the commercial sector you want to enter.
#2. Write a business plan.
#3. Sort out your finances.
#4. Save up some money.
#5. Get qualified.
#6. Find the right tools.
#7. Ride the motivation tide.
Key Takeaways
Caution: Entering Solopreneur Territory
It’s easy to get excited about becoming self-employed. No one bossing you around, no dress code to follow — stay in your PJs for as long as you like — and you can plan your day the way you like. Sounds great right?
Unfortunately, there’s a lot more to it than that when you’re self-employed. It will require a lot of determination and discipline. So, before you make a decision on becoming your own boss, ask yourself the following questions.
Do you have a plan?
Being self-employed is all about having a road map, albeit a flexible one. No one is going to give you a plan of action, so it’s up to you to figure out what needs to be done. From filing taxes to chasing invoices and dealing with clients, you’re going to be wearing a lot of hats to get this new business machine to work.
Tip: Even if your plan is to be a solo-freelancer, you need to think of yourself and your work as a business. Plan out the foreseeable future, set yourself targets, create a to-do list of things that need to be done, and slowly work your way through the list.
Does it fit your lifestyle?
One of the advantages of being your own boss is working from home or from a location of your choice. While this sounds exciting, it might not really suit your current lifestyle. If your home is full of little children or parents-in-law then staying focused could become an issue.
Tip: Take a minute to picture your ideal lifestyle. What does it look like? Does being self-employed fit into your dream lifestyle?
Where does your motivation lie?
Being your own boss isn’t easy. Things can get tough, so knowing what motivates you will be the key to not giving in. Make sure your motivation is crystal clear. Simply doing it to avoid a toxic boss might not be enough to create something better for yourself.
Tip: Drill down to the root of your motivation by asking yourself “why” five times. The first of the why’s should be, “Why do you want to be your own boss?” List out the answers and then drill deeper.
Can you afford to pull the plug on your 9-to-5?
One of the advantages of a traditional 9-to-5 job is that it’s a reliable source of income. Make sure you understand what your ongoing costs are. Do you have a mortgage to pay or a family to take care of? Those things aren’t a problem, but without a stable source of income, you should calculate what income would be enough to cover your regular expenses.
Tip: Contribute to your future business by making small efforts on the side of your 9-to-5 job. Make the jump when the income from the side hustle can replace your normal job.
Are you financially savvy?
From calculating your profit to writing invoices, if you want to run a thriving practice or production, you’ll need to be good with finances.
As well as your business finances, staying on top of your personal money matters is crucial. Make sure you know what it costs to fund and run a new venture. Consider how long it would take to start making the same amount as you did at your previous job.
Tip: Build up an emergency fund. Your emergency fund should amount to three to six months of your current household expenses. This ensures that if things don’t go as planned, you have the fund to fall back on while you look for a new source of income.
The Pros and Cons of Being Your Own Boss
| Pros | Cons |
| ✅ You can take charge of your own decisions. No one can fire you and you don’t have to deal with toxic bosses or office politics. | ⛔ You acquire a new type of boss — customers, clients, partners, and employees. All work, whether at a traditional job or for your own business, comes with responsibilities. |
| ✅ You are in charge of your own income. You can increase or decrease this based on the amount of work you want or can take on. Moreover, you can charge a higher fee that better reflects your skills. | ⛔ No work, no money. Your earnings can fluctuate periodically, depending on how much work is available. |
| ✅ You decide your office location and work style. If you want to work in your pajamas all day then you can because who’s going to stop you? | ⛔ You’re responsible for maintaining a work-life balance. While this can be an advantage, it’s often a challenge to set boundaries, especially if you work from home. |
| ✅ No one limits your creativity. Whether it’s a unique marketing approach or a new way of approaching a project, you get to decide how you run all the business processes. | ⛔ You wear all the hats. From the project manager to the accountant — that’s all on you, unless you have the resources to employ specialists, and even then you need to oversee that all the processes work to your standards. Over time, you may decide to delegate the tasks as the business grows. |
| ✅ You find yourself forming positive habits and attributes. Being your own boss pushes you out of your comfort zone and builds character. To succeed on this path, you’ll need to get rid of bad habits and replace them instead with ones that help you achieve your goals. | ⛔ You’re in charge — your work isn’t. You’re in charge, which means it’s up to you to control how the money is spent to start up and scale a new business. This comes with a lot of responsibility. Are you up for it? |
Things to Do Before You Become Self-Employed
If you’ve read this far, chances are, the downsides of becoming self-employed don’t scare you, and you are ready to work on benefitting from those perks. However, rushing straight on into a new career path might not be the best course of action. Measure twice, cut once — just to remind yourself that you need to carefully plan your transition from being managed to becoming the manager.
Here are some steps to follow and a checklist to prepare yourself:
#1. Analyze the commercial sector you want to enter.
Make sure you understand your industry inside out. Get into the mind of your future customer, understand who and what they are in their daily lives, what they are looking for, and whether they’re interested in your products or services.
Consider the following questions:
- Who is your target market?
- Do you have any competitors?
- What are your competitors’ winning and losing features?
- What business models exist in your market?
- Is there a gap in the market that you can solve?
#2. Write a business plan.
Mapping out the steps you will take into this new venture can help define your objectives and goals. Moreover, it gives you a blueprint that you can refer back to when you’re unsure about your vision, as well as to track your progress.
Ask yourself the following questions:
- What is your mission statement?
- What are your financial projects, including cost, revenue, and profit?
- What is your marketing strategy? How will you approach sales?
- What is your communication strategy? Will you have all your emails in one place?
- What is your contingency plan if there’s no work?
- What does your business look like in 1, 5, and 10 years?
#3. Sort out your finances.
Remember? Being on top of both your business and personal finances is crucial. If you have any outstanding debt then it might be worth paying it off first while you’re still earning a stable income.
Consider the following questions:
- What’s your current monthly income?
- What are your monthly household expenses?
- Do you have any debt (i.e. credit cards or mortgage) that needs paying off?
- How will you fund your new venture?
#4. Save up some money.
As we discussed before, having an emergency fund can prevent a lot of stress. In the run-up to becoming self-employed, save up as much money as you can and reduce any unnecessary expenditures.
Think about the following questions:
- How much money do you need to quit your day job and hop on the self-employment journey worry-free?
- Do you have an emergency fund (three to six months of household expenses) set up?
- How soon do you expect your new income to replace your old 9-to-5 job?
#5. Get qualified.
Taking charge of your financial stability and creating a business also relies on constant learning and improvement. Find out what skills you need to best serve your customers.
Ask yourself the following questions:
- Are there any licenses or qualifications that you could get to help you increase your earning potential?
- Are there any personal development courses you can take to improve your chances of self-employment success?
#6. Find the right tools.
Running a business, whether solely or with a team, means you’ll need all the help you can get. And help can come in the form of different tools that save time and improve productivity, both with your hard and soft skills.
Pro tip: Digital Adoption Platform is your one-stop solution that paves way for effective onboarding, training, and software adoption.
Whether it’s a camera, a studio, task management software, an email app or even as mentioned in #5, qualifications, like a sales training session, your tools matter. They will benefit you, your clients, and your workflow. This will even save you time and energy later when it’s time to upgrade.
Consider the following questions:
- What courses, devices and software do you need to complete your work?
- What tools are your competitors using?
#7. Ride the motivation tide.
Now is the time to be proactive and capitalize on every boost of motivation you get. You’re going to need all the energy you can get, so make sure you avoid activities that drain you.
Take into account the following questions:
- Are there any negative habits that aren’t serving you?
- What new positive habits could help you run your business better?
Key Takeaways
Many people dream of being their own boss. However, very few recognize the reality and responsibilities that go along with self-employment. As with everything in life, there are perks to doing something as well as underlying challenges. If the pros outweigh the cons, then perhaps the self-employed life really is for you.
But before you go quitting your job and turning your life upside down, remember these key takeaways:
- Figure out where your motivation lies. Analyze your reasoning behind wanting to be your own boss. Ask yourself “why” five times to drill down to your core desire for wanting to be self-employed.
- Have a plan. Don’t dive into a venture without planning. Study your market, discover what you have to offer clients, create a strategy, and chase your goals.
- Prepare your finances. Save up money while you still have a reliable income. Calculate your household expenditure and be clear on how much you need to earn before you can switch to being fully self-employed.
- Enjoy the ride. You only have one life. Switching to freelancing or launching a business is always going to be full of challenges, but that’s just part of the journey. Learn to enjoy the process and you’ll eventually find success!