Considering Self-Employment? Read This First

Many, many moons ago, before there existed sliced bread, I owned a blog. The blog was a tutorial of sorts, directed at those who were just stepping into the world of remote work. Most of my visitors were freelance writers, though I engaged a few IT professionals, medical professionals and graphics designers.

That blog is long gone, lost to the ether of the blogosphere – it’s resting peacefully in that space where blogs go to die. But there was a post on that site which was cornerstone to the success I’ve experienced.

Has stepping into the New Year left you blinking, wondering if this could be your year? If this is the year that you’ll finally leave behind the corporate chains and step out into the blinding light of this sunny new world of freelancing?

Stop.

Before you tell your boss to kiss your backside, consider this – revised for 2018 – list of things you absolutely must know about working for yourself.

1. It’s not all sunshine and buttercups.

The freelance life consists of rolling out of bed at noon, then shuffling through the newspaper while you sip a cappuccino. Around one in the afternoon, you’ll write a few blog posts while you watch reruns of Gold Rush.

By three that afternoon, you’re ready to get dressed for yoga class (you forgot to get dressed this morning, oops!) and head out the door. After a relaxing hour of sanas, you return home to sip on a glass of wine and watch the evening news as you check your bank balance.

Bull.

The first year of your freelance career is going to be one of the most physically and mentally taxing of your life. You’ll wake up early and pass out late, while still feeling as if there aren’t enough hours in the day. You’ll forget to eat. You’ll likely either gain weight from sitting at your desk all day or lose it because you can’t afford to eat much but ramen. Forget about that cappuccino.

Your hours will be spent more in marketing activities than in doing actual work for clients, and your bank account will be a mess. It won’t simply show a glaringly low balance. It’s going to be a legitimate mess.

It’s going to be tough, but there are a few steps you can take to avoid a complete disaster. Taking those precautions can ensure that you don’t fail in your new career, and that you won’t be discouraged before failure can even occur.

2. You’ve got to treat your job like a job.

It’s absolutely critical to your success that you treat your job as a full-time gig. If you don’t take your career seriously, who will?

Get up in the morning. Brush your teeth, take a shower, eat breakfast and sip coffee. Designate a start time. Sure, no one will be checking your time card. And there may be a few days when you run a few minutes behind – no one will penalize you.

But you are now the employer peering over your shoulder. Be as hard on yourself as she would have been.

• Schedule your lunch breaks.
• Schedule your smoke/coffee/bathroom/whatever breaks.
• Work in a distraction-free environment. This does not include your couch.
• Put your cell phone away unless you need it for business. Candy Crush Saga is not a work activity.
• Set daily goals, whether they be jobs completed or contacts reached.

The sooner you begin to realize that self-employment is actually employment, the more successful you’ll be.

3. Did I mention your finances will be a hot mess?

Before you sign that first contract, you’ll need to take a few things under consideration. Will you work as a sole proprietor or will you apply for a business license? Will you have a separate business bank account? (Yes, please.) Will you set aside money for investment or retirement?

Consider hiring an accountant, at least for the first year. Your finances will be a swirling mass of paperwork, and your receipts will remind you of Wall Street when the market opens. An accountant, if only at tax time, can simplify your life – mine was the best investment I’ve ever made.

Save your receipts. For everything. Need to have your laptop repaired? Keep the receipt. Did you buy business cards? Keep the receipt. Meet a prospective client for lunch? Guess what? You should keep the receipt.

Unfortunately, tax laws for freelancers are changing. But some items may still be deductible. You won’t be able to take the deduction without proof you’ve paid it. Keep your receipts.

Finally, I touched on it a minute ago, but I recommend you open a separate bank account, just for business. It doesn’t have to be an official “business account,” as those carry high fees and require high balances. Just a separate, personal account will do just fine, and will make your accounting much simpler.

4. You will hold every role.

When you decide to work for yourself, you’re going to hold every position in the company. You’ll be:

• CEO
• CFO
• Marketing
• Sales
• Accounting
• Human Resources
• Information Technology

Not to mention janitor, administrative assistant, travel liaison, social media marketer and legal. Plus, you’ll actually have to do your primary job at some point during the day.

If you have trouble juggling tasks, or with organization, you may want to do a bit more soul searching to determine whether self-employment is right for you. Remember: in the first few months, you’re likely not going to be able to afford to outsource.

Think carefully before you take the leap. Will your family or other obligations prevent you from successfully serving in those roles?

5. It’s worth it, if you can handle it.

The first months will be hard, no doubt. There’s a learning curve as well. You’ll make mistakes; some of those mistakes will cost you clients and money.

But you’ll learn as your business grows. You’ll develop meaningful connections with both clients and peers in your industry. You’ll feel as if you’re beginning at the bottom, but you’ll slowly rise to the top.

The new estimate is that by 2020, 34% of the workforce will consist of contractors, freelancers and other self-employed. It’s not for everyone, and it may not be for you. It is, however, a huge step and one which requires nothing but full commitment from you.

Before you quit your job to start your own business, I strongly encourage you to consider whether you’re willing to make that commitment. If so, the benefits are well worth the risk.

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