What To Expect When Going From Corporate Employee To Self-Employed Solopreneur

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 Question mark under corporate business suithas 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:

Unpredictable Income

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?”

That’s normal.

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

Can You Handle a Full-time Freelance Career?

According to the 2012 Freelance Industry Report by Ed Gandia, 65.5% of freelancing professionals work full-time as freelancers. Freelance writer's work stationTheir career is freelancing. They don’t freelance “on the side,” and they don’t have other part-time jobs to subsidize their income.

 

Given that Freelancers Union estimates “Nearly one in three working Americans is an independent worker,” that’s a lot of people making a living by freelancing.

 

Freelancing provides home/work life flexibility, the satisfaction of doing what you love, and the opportunity to develop your skills and knowledge on your own terms.

 

Of course, that doesn’t mean it’s easy! Personally, I’ve found I’ve worked harder as a freelancer writer than when I worked for a corporation. Don’t misunderstand; I wasn’t by any stretch a slacker for my employer. But starting and running my own business has demanded a whole new level of commitment in time, attention, and emotional investment.

 

Are you up for the challenge of freelancing?

If you haven’t started yet or are new to freelancing, here’s a list of some things you’ll need to consider as an independent contractor.

 

Setting up a website
Along with that goes: finding a web developer/designer, web hosting, domain name registration, content (both text and visual), ongoing content updates, etc.

 

Taxes
When self-employed, you’re responsible for submitting your tax payments to the appropriate agencies, because taxes aren’t taken out of your paycheck from an employer.

 
Income tax (federal, state, local), Social Security, Medicare. And depending on the nature of what you provide to your customers, maybe even state sales tax. Before you get rolling with your freelance business, talk with a tax professional to find out exactly what tax obligations you’ll have and when they’re due. A tax pro can also help you estimate how much you’ll owe so you can plan ahead.

 

No Guaranteed Income
Clients can come and go. Projects come and go. Even when you have several clients who give you regularly recurring weekly or monthly assignments, they may not last forever. Unlike having a steady paycheck from an employer, your income might wax and wane. I’ll bet you’ve heard about the “feast or famine” cycle before. You will probably experience it as a freelancer, especially when you’re starting out.

 

Marketing
If you’re thinking just being present will draw prospects to you, think again. You need to put yourself out there and build awareness of your services. Expect to spend A LOT of time marketing yourself, especially when your business is new. Social media and blogging have been immensely effective tools for me. Be warned, however, they require attention every day and will demand hours of your time each and every week. To keep the momentum going and nurture online business relationship, you can’t ignore your social media or blog even when you’re super busy.

 

Paid Time Off
As a freelancer, there is no such thing.

 

Sick Time
Again, no such thing.

 

Face-To-Face Networking
Arguably, this could be lumped under marketing, but I believe it’s important enough for its own mention.

As convenient and effective as online networking is, the in-person variety can boost your capacity to build trust. When you meet someone face-to-face, they get a better sense of your personality and likeability. By attending networking events, you can get your foot in the door and close deals more quickly. And you can easily build upon those new relationships by following up via connecting with contacts on LinkedIn and other social media channels.

 

Be aware, however, that it takes time and consistency, just like online networking does. Don’t expect to go to a single event and walk out with a new customer in the bag.

 

Also important to know: networking events typically require a registration fee or membership to an organization (like chambers of commerce or professional networking groups).

 

Health Insurance
I’m extremely fortunate in that I have medical, dental, and vision insurance through my husband’s policy at work, but not all freelancers are as lucky. If you’re not married or your spouse’s plan won’t cover you, you’ll need to look into getting your own policy. It’s an expense you’ll need to factor into your pricing.
Time to Do the Work. Time to Run the Business.
Expect that you won’t be spending 40 hours a week on billable work for clients. Having a freelancing business demands time for taking care of administrative tasks, marketing, prospecting, and other responsibilities. That’s another thing to factor into your pricing. Your billable time will need to compensate for the time you spend on non-billable tasks.

 

Dealing with Numbers
Running your own business requires some degree of competency in managing your financials. Even if you outsource elements of your bookkeeping, you need to have a basic understanding of tracking and reporting the money coming into and going out of your business.

 

Only the Self-Motivated and Organized Need Apply.
If you have trouble motivating yourself to start projects and see them through to the end, freelancing might not be the best career choice for you. Likewise, if you fail at prioritizing and let tasks and projects slide until they’re past due, think twice before diving into freelancing full time.

 

 

I could go on and on, but I think that should give you a good taste of what you can expect from a career in freelancing. You’re the boss and there are many rewards, but you’ll need to work for them.

 

That said, don’t let your lack of experience or knowledge about business lead you to think you can’t do it. With so many online resources and entrepreneur-focused organizations (like SBA and SCORE, for example), you can access information and gain insight easily. I also recommend talking to other freelancers who will share about their own experiences.

 

Do your homework; then decide if a freelance career is right for you.

 

By Dawn Mentzer
Another Insatiable Solopreneur™ post

 

 

An Unexpected Benefit of Being a Solopreneur

When I decided to follow the self-employment path, I had some expectations of the perks that would come with the Thumbs upterritory…

  • Flexible schedule
  • Freedom to pursue the type of work I love most
  • Less drama and politics than in a corporate setting
  • More control over my workload

But there was one immense benefit of being a solopreneur that I didn’t see coming – new  friendships.

As a result of networking both online and off, working closely with clients and their clients, volunteering with community organizations, and joining local business groups, I’ve made a lot of professional connections. And in the process, I’ve made some near and dear friends. Friends who are ever-encouraging and truly understand the triumphs and terrors of being in business for yourself.

Don’t misunderstand…I love my non-business-affiliated friends from before I became a solopreneur, too. But I’ve found the friendships with roots that trace back to in-common professional experiences to be a directly positive influence on my attitude and motivation toward entrepreneurship.

Some ways my friendships formed from professional beginnings enrich my life include…

  • They provide a willing and experienced “sounding board” for sharing entrepreneurial thoughts, ideas and fears.
  • They help me sort through problems and challenges some other friends might not be able to relate to.
  • They sometimes guide me to professional opportunities I otherwise wouldn’t have found.
  • They show me how to laugh and maintain the fun in business even when the going gets tough.

Of course, friendship is a two-way street! I strive to return the same level of support and encouragement to my business-based friends.  It’s that healthy give and take that I believe makes these friendships so powerful and satisfying.

So, as you follow the road to being a solopreneur, expect your circle of friends to grow and change over time. But never ever force a friendship for the purpose of professional gain. As with any other friendship, one with its beginnings based in business should happen naturally – quite simply because you genuinely like each other.

Your turn! How has being in business for yourself changed your circle of friends? What professionally-related activities have led you to new friendships?

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It’s OK! 12 Things Solopreneurs Should NEVER Feel Sorry About

Being your own boss has its upsides, but many solopreneurs who I know admit to being the toughest employer they’ve Approved signever had. Really, that’s not all that hard to understand. When you’re running your own business and you solely are responsible for setting strategies and executing those plans, you’ve got to crack the whip on yourself. And while there’s nothing wrong with being fully vested in your success, you shouldn’t drive yourself to the brink of mental or physical breakdown. There comes a tipping point – and it’s one you don’t ever want to reach.

So, how do you avoid crossing the line that runs between “motivated & dedicated” and “burned out & checked out?” I don’t have all the answers, but I do have some words of advice that I think will help… “Tell yourself it’s OK!” What I mean by that, is don’t be afraid to make decisions or take actions (or lack of action!) to help you regain focus, de-stress, and rejuvenate your mind and body.

As a solopreneur, it’s OK to…

  • Fit a workout into your day.
  • Make yourself a healthy meal.
  • Take a nap if you worked late the night before or got up extra early.
  • Buy something to make running your business easier.
  • Ignore your email and phone after hours.
  • Take a vacation.
  • Take a long weekend.
  • Not be available at a moment’s notice for meetings and phone calls.
  • Ask clients if meeting by phone rather than in person would work so you don’t lose valuable project time because of a commute.
  • Say “no” to work that you don’t want to do.
  • Decline or resign from a volunteer opportunity if you’re time-strapped and the answer to the question “What’s in it for me?” is “Not enough to justify the time and energy.”
  • Say, “I don’t know,” when you don’t know.

Keep in mind that it takes some self-training and discipline to fully accept that it really is OK. Fortunately, like with any other professional skill, practice makes perfect. The more you exercise your right to treat yourself like the star employee that you are, the easier it will be to make your solo business a workplace you’ll never want to leave.

Your turn! What else should solopreneurs give themselves permission to do without apology?

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