Employee To Self-Employed: Make Your Move Successful
Let me be very clear, what you’re about to read is not what I did when going from employee to self-employed. Rather, this is what I would do after 15+ years of being a business owner and coaching hundreds of others to move from employee to self-employed.
Plus, my move from employee to self-employed was well…. rocky. You likely don’t want to travel the same road I did. I learned from it, grew from it and even got the t-shirt. But I wouldn’t do it the same way again.
If I was moving from
Employee To Self-Employed,
Here's What I'd Do:
1. Make Financial Adjustments:
When you start your business, you don’t start making income on day one. But, you most likely will have expenses on day one. This means you're going to have money going out but no money coming in. The only way to make that work is to make adjustments to your lifestyle.
If you wait to make those adjustments until you start your business, you’re setting yourself up to feel like those adjustments are having to be made because you're failing. And it’s hard to stay motivated when you feel like a failure.
So, take a look at your lifestyle, make a list of what you could eliminate or reduce now so you don’t feel like you’re having to “give something up” when your business income isn’t greater than your expenses?
Pick as many on your list as you can and whatever money you would normally spend on them save for when you start your business. This way, you have money put aside to either invest in your business or carry you through times when your business isn’t as profitable. As it is common that businesses have a fluctuating income.
2. Get Meticulous In Your Dream
Knowing you want to be your own boss, earn an amazing income and live a lifestyle of more freedom isn’t enough.
As soon as you enter the business world you’ll see that it’s like a Las Vegas casino. There are blinking lights, shiny objects, and the sound of people winning all around you. At first, it’s exciting, exhilarating and fun. Then, you find yourself going from machine to machine (idea to idea), card table to card table (strategy to strategy.)
It becomes distracting, overwhelming and exhausting. It’s easy to lose sight of what you wanted and why you wanted it. Which is why it’s important to craft as meticulous a dream as you can now while you’re not distracted.
- Make a list of all the benefits you believe you'll have as a self-employed business owner that you can't have as an employee. Be stringent with yourself, these benefits can’t be available to you at any other job, they have to be only available to business owners.
- Create a dream lifestyle budget. Determine exactly how much income you will need to make and how many hours you’re willing to work to make that income so you will have a base to set your prices. (It takes more than I want to make X dollars divided by I will work X hours to set your prices but it’s the start of the pricing equation)
- Map out your dream schedule. When do you want to wake up? What time do you want to take lunch? When will you see clients and when will you work on things like marketing, accounting and program/product development? Will you take two weeks off for Christmas and New Years or maybe your birthday? (hint: this is another piece of your pricing equation)
- Articulate who you want to help and what you want to help them with. Yes, this is the building of your niche. And if there were only one key to unlock business growth, it’s a niche. But, here’s the thing -- some people know their niche right from the start and stick with that same niche for years. Others are clear on what they want to help others with but aren’t so clear on who. And a few know who they want to help but aren’t sure what they will do to help them. No matter which one you are, spending time drilling down the who and the what of your business niche will be time well spent. But, don’t think you’re done with your niche, most businesses will tweak, adjust and even narrow their niche as their business grows. Having it as clear as possible from the start means less tweaking and adjusting less often which means less wasted time and less wasted money. So, get as clear as you can and then clarify the who and what even more. (And yes, I’m speaking from personal experience. I wasted time and money because my niche was not clear when I started.)
3. Set Your Price
I sort of hinted at this one earlier but if having a narrowed niche is key one to unlocking business growth, key 2 is determining your price. Setting your price means doing the math to come to a realistic amount you’ll need to charge for your services to make the income you need for the lifestyle you want. For some just the thought of math alone brings about anxiety. For others the anxiety comes after doing the math and facing “the number” head on.
In my 10+ years of business coaching I have never had a client look at “the number,” set it as their price and start charging it without some mindset challenges popping up. My clients (and myself) have struggled with “will people actually pay me that amount of money for what I do?” “If I charge that much, I will need to do X,Y,Z and I’m not sure I can really do that.” “But, I’m just starting out, I can’t charge that much.”
No matter what your “number” is, it’s likely you too will experience some emotional challenges. It won’t be the last emotional challenge you’ll face as a business owner, but it is commonly the first. And when overcome, it can be the most confidence building too.
So, when you find your “number," face it head on and figure out what you need to do in order to charge that price so you can create your meticulous dream and start making enhancing adjustments to your lifestyle.
What you need to do might mean making more financial adjustments to your lifestyle now. It could mean you make adjustments to your dream lifestyle budget or your dream schedule and redo the math and determine a new “number.” You may decide it means finding ways you can gain more experience, develop your skills or further your knowledge.
Whatever it is that you can do so you can set your price where it needs to be to make your move from employee to self-employed, do it. Do it so you can enjoy the list of benefits you wrote that come only from being self-employed.
Now, as much as I wish I had a crystal ball or magic fairy dust
and could promise that if you do these things your transition from
employee to self-employed will be smooth and successful, I can't.
I can tell you that these things are important ingredients of business success and that they aren't the only ingredients in the recipe. They are however the beginning of a solid business plan. Doing these things will set you up for a stronger start and a more enjoyable journey.
And when my road of business ownership is rocky, I often have to re-read my list of benefits to remind myself what I'd lose if I chose to flip-flop the equation and go from self-employed to employee.
So, while my road from employee to self-employed was rocky and I'd do it differently, I'd still do it.
Hello! & Welcome
I'm Coach Erin. I help new and emerging business owners
↣ organize ideas
↣ design authentic brands
↣ systematize business
↣ create and implement strategies
↣ improve productivity
If you want to start, grow and manage your online service business with more confidence, consistency, and control, let's meet.
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ABOUT THE AUTHOR
Erin Garcia, Business Coach
Coach Erin has been guiding new business owners through the process of starting, growing, and managing a service business since 2003. Between coaching, brand design, and website development you might catch her strolling the beaches of Western Washington, visiting family in Arizona, or enjoying a glass of iced tea creekside on her back patio.