How to transition from employment into self-employment in 2021
We all know it, and I think it is safe to say, that 2020 has been a bit of a tough year. Companies have faced significant operational challenges meaning that they have been without staff, suppliers or customers for long periods of time. This has left many businesses struggling financially, which in turn presents the risk of redundancy to their employees.
This, combined with a realization that working from home can be effective and provide more time for family and hobbies, has left many individuals thinking about changing their career status to self-employed.
Understandably, quitting your 9-to-5 can be a scary prospect. Giving up a stable income with benefits is hard to do even if you are certain you want to make the transition. So, how have others done it?
It is essential to create a self-employment transition plan before your hours are reduced or you hear the dreaded “R” word. It is much easier to do this while you are employed and have the resources. Trying to do this without an income, without savings or resources, will make it that much harder.
So where to start? Well a good place to start is to change your mindset. Stop thinking of work as an exchange of your time for money and start thinking about what you can do to add value to others whilst doing something you love.
To achieve this, the first thing you will need to do is identify your own core values. What do you enjoy doing and what do other people think you are good at? Also, what will being self-employed allow you to do? Once you know this, it will help you to identify an opportunity that could be successful for you.
You will also need to prepare yourself, your family, and your lifestyle financially. You will not have the safety blanket of a salary when you are working for yourself, so ensuring that you have enough savings to cover your lifestyle until your business is up and running to its full potential is important.
For example, do you really need a Netflix, Amazon Prime, Disney Channel and Sky subscription? You could reduce it to one and save a significant amount each month, as well as have more spare time to prepare for success. Create a list of “needs” and “wants” so that you can be realistic with yourself about how you are currently spending.
Another potential way to secure more savings is through company perks. Some organisations will allow you to exchange holiday days for cash. If not, not do they offer a rewards scheme and are you using it fully? Think creatively and you may find more opportunities to prepare financially than you realise.
Next, it is time to start thinking about how you can use your spare time efficiently. I think it’s true to say that the enforced lockdowns of 2020 have given us all a bit more spare time. Use this time, perhaps when you would have been commuting, to plan and prepare your business. Set up a domain, build a website, create a business email, identify key contacts in your network. All of these are tasks that could be completed as you prepare for the transition.
Finally, and most importantly, make sure that you are ready to turn up every day and commit to this lifestyle. Taking the leap into being self-employed is a big challenge and full of risk. So, if you are not fully committed and prepared to put in the hard work, you are just going to become another one of the 80% of small businesses that fail in the first year. (Latest figures from the Office for National Statistics.)
Some of this failure will be down to a lack of funds, lack of direction and drive or maybe even because the business idea just was not relevant in today’s world.
You can overcome many of these challenges and reduce some of the risk by following a proven business model. The best way to do this is by investing in a franchise license with a business model that fits your values and has a service or product that is in high demand.
Many different brands are well established and have maintained success even during difficult financial times. A good brand will also offer professional training, coaching, mentoring and all the relevant tools you need to allow you to focus on building a successful business for yourself. This support can shorten your route to achieving your personal goals and eliminate some of the risk associated with starting a new business from scratch.
So, as we approach 2021 and thoughts turn to a change in your career, make sure you consider all your options and prepare yourself fully before making the transition into self-employment.