A friend recently asked me to meet up over lunch to talk about his thoughts of making a career change. Not happy with the degree of autonomy or flexibility he has in his corporate management position, he said he thinks the route to go is self-employment. He wanted to know more about how and why I took that path. And he asked for any insight and advice I could offer to give him a better idea about what to expect from becoming a free agent.
An hour over lunch really doesn’t provide enough time to really get into the nitty gritty of going from corporate employee to self-employed professional. It’s a decision not to take lightly. And since talking with my friend, I’ve felt impelled to write about some of the considerations potential solopreneurs should keep in mind as they explore the feasibility of making that significant transformation.
In my situation, the regional company I worked for (for 17 years) was purchased by a national organization. My position and many others (about 60% of the total workforce in our area) were eliminated. Thankfully, the company gave us plenty of advance notice. I had nearly six months to explore my options and figure out what I wanted to do during the next phase of my career. Even though my hand was forced to make a transition, I was fortunate to have time to assess my situation and determine if self-employment was a good bet for my family.
If you’re gainfully employed and considering leaving your present job behind to pursue starting your own business, you’ve got the advantage of time, too. Don’t act in haste by jumping in before you’ve thought it through and considered how the change will affect you and your loved ones.
With the flexibility of becoming your own boss come challenges.
The things you need to prepare for when going from corporate to self-employed include:
It takes time to build a network of connections and a client base. When you’re starting out, you’ll likely experience cycles of feast and famine revenue. That can make it difficult to keep up with expenses both professionally and personally. I know several small business owners who haven’t taken a paycheck for themselves after being in business for several years, BUT they have spouses who work and can cover their personal financial obligations. I was fortunate to be able to jump right into freelancing because my husband had a good job, and we knew we could make ends meet until things ramped up for me. Even then, it took some adapting. Having been the one who always brought home the larger paycheck, I felt guilty about not pulling my weight financially as much as before.
Moral of the story: Expect to make less than you did in your corporate position and assess your income needs before you decide to ditch the day job. Don’t make a hasty decision that lands you in the poor house.
Cutting Back On Life’s Luxuries
Get ready to make some personal sacrifices when you enter the realm of self-employment. If you’re accustomed to starting each day with a Starbucks caramel latte, going out for expensive dinners each week, and spending money with abandon on leisure and entertainment, prepare to alter your lifestyle a bit. As I mentioned earlier, your pay scale as a solopreneur probably won’t match what you earned before. That means you’ll need to get more selective about which “non-essentials” you’ll spend your hard-earned money on.
Adjusting To Working From Home
When you work from a home office, you face a whole new set of distractions that threaten your productivity. Some people are able to tune out all the personal to-dos (cleaning, laundry, home repairs, a drive to the grocery store to restock the fridge, TV, etc.) and others aren’t. It helps to have a dedicated office space within your home so personal obligations won’t be in your face and lure you from staying on task. I rarely work from anywhere other than the spare bedroom we’ve converted to my office.
Another thing to keep in mind: you’ll work alone a lot. Even if your new career path involves consulting or coaching, you’ll spend a lot of time by yourself. Lack of social interaction can leave solopreneurs feeling isolated. You can get past that by seeking networking and professional development opportunities that take you out of your home office. But be careful not to overbook your schedule with those types of engagements; you might find yourself without enough time to get your work done.
Developing A Heightened Level of Discipline and Determination
Working independently requires self-motivation and project management skills. Without someone to lay out your work for you, you are fully responsible for planning your efforts so you can meet deadlines. Your organizational skills—or lack thereof—will largely affect your ability to succeed as a self-employed professional.
Working hard. Really hard.
I can’t emphasize this enough. If you’re serious about making self-employment lucrative for you and your family, you will eat, drink, sleep, and breathe your business. Solopreneurs typically handle all aspects of their businesses—especially when they start out. You’ll be your all-in-one Sales, Marketing, Accounting, Operations, and Customer Service department. One of the biggest challenges will be “clocking out” as a solopreneur and giving yourself the much needed breaks you’ll need so you don’t suffer from burnout.
Health Insurance – What Now?
Health insurance is a biggie, especially if your spouse and children are covered under your policy at work. If you leave your job, you leave your medical insurance behind as well. Review your options before you cut the cord. If your spouse works, can you get coverage through his/her workplace? If not, can you afford the premiums and deductibles of policies from other insurers?
Life Insurance – Giving Up Peace of Mind?
If your life insurance coverage is through a group policy via your company, you’ll relinquish that peace of mind as well when stepping out on your own. Do your homework before leaving your job, and consider talking with a financial planner about your options.
Paying Your Taxes
Without your employer taking money out of your weekly or biweekly paychecks to cover your federal, state, and local taxes, you’ll need to estimate your revenue and expenses and make tax payments quarterly based on your estimated net income. And note that as an employee working for someone else, your employer pays half of your Social Security and Medicare tax. As a self-employed person, you’re obligated to pay the entire 15.3%. “Ick,” I know. I don’t know any solopreneurs who enjoy this part of self-employment, but it goes with the territory.
Putting Yourself Out There – Social Media Is A MUST
If you don’t actively use social media as a tool for building professional connections, you’ll put yourself at a severe disadvantage. You’ll still need to work on nurturing relationships face to face, but online networking platforms amplify and extend your ability to stay top of mind. Don’t wait until you’ve left your day job to start working on your online presence. Although you might not be in a position to promote yourself yet, you can start following leaders in your industry and connecting with people/businesses in your target market. You can also begin demonstrating your interest and expertise in your field by sharing relevant content and providing thoughtful commentary on it. Do it now rather than later.
Not Everyone Will Support Your Decision
Sadly, not all of your family and friends will understand or encourage you when you start your own business. You’ll meet skepticism and even animosity from some people. As a solopreneur, you’ll need a thick skin.
And Last, But Certainly Not Least, Expect To Doubt Yourself From Time To Time
Self-employment has its ups and its downs. You’ll have moments when you feel fully confident in your decision to go out on your own and others when you wonder, “What the #@*% was I thinking?”
When you experience self-doubt, stay focused on moving forward by accomplishing something—no matter how small—to reinstate your momentum and self-confidence. The path to success as a solopreneur has some jagged twists and turns. Stay flexible and resilient as you make your journey.
My final words of advice for you—and anyone you know who is thinking about going from corporate employee to self-employed—is: Talk to others who have made the change! You can only benefit from hearing about their first-hand experience—the good, the bad, and the ugly. And consider using a resource like SCORE, where you can get free mentoring and guidance as you start and build your solo business.
Again, the move to self-employment should not be taken lightly. It’s a rewarding career path, but it’s not right for everyone. And even if it is right for you, it may not be the right time. Think about it carefully, assess your situation, and make an informed decision before you jump in.
If you’ve gone from corporate to solo pro, what would you add to my list? Know anyone who’s considering making the same change? Please share this post with them!
By Dawn Mentzer
Another Insatiable Solopreneur™ post
Image courtesy of pakorn at FreeDigitalPhotos.net
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