Self employment has a host of well documented benefits. I’m not talking about working from bed in your pyjamas (does anyone really do that?). But flexibility and not having a boss are rewards that, for many, matter more than even salary.
Being able to pay the bills doing something you love and largely on your own terms is the dream. But taking the leap into self employment before you’re completely ready can quickly turn that dream into a financial and emotional nightmare.
So if you’re thinking about biting the bullet and handing in your notice at work, here are a few questions to ask yourself first:
1. Can you pay the bills even if you have a bad month?
What about 2 bad months? 3? How about 6?
I’m not saying you need to be able to pay the bills for a whole year out of your savings. The specifics of how much of a financial cushion you need will depend very much on your business.
When I took the leap, I did so without enough of a financial cushion to cover 3 months. It doesn’t seem a lot. But a few things applied to me:
- My husband would still be employed and, if the worst came to the worst, he could cover the bills with his salary each month
- I had no significant set up costs beyond a small office and some new computer equipment
- I had multiple clients lined up meaning I would be covering the salary I’d just walked away from quickly. Having multiple clients meant I wasn’t too worried about exposure should someone leave
Take a long look at your finances and work out what that cushion needs to look like for you and don’t take the leap until you have it in place.
2. Will there still be demand for what you plan to sell in a few years?
An acquaintance of mine left a job to go self employed making and selling a product he knew would probably only generate an income for a short time. He fully expected the market to become completely saturated within a year and for his revenue to be swallowed up by bigger companies.
He was right.
But he knew it was coming, so he had a plan B ready to go when that happened.
If what you plan to do probably has a limited shelf life, then figure out what comes next before taking the plunge.
3. Where will you work from?
The beauty of being freelance is that you don’t need an office. You can work from your bed, from a beach, a coffee shop, a hotel lobby. You can work from anywhere.
But not really. In my experience, there’s nobody stopping me from working anywhere…. except me.
I dreamed of days working in my pyjamas. But in reality, if I don’t get up, shower and dress then I can’t get my head in the game. And while I’m incredibly productive working in coffee shops, my office, hotel lobbies and even trains, I am not great at working from home.
I always find an excuse to crack on with something else (a bit of washing maybe?). So I don’t work from home during the day anymore and I ended up taking on an office.
I tried co-working space. It didn’t work out for me. Some people love it and I do understand why. But for me, it was the worst of a couple of worlds. It wasn’t quiet to help me concentrate on work I would normally do in isolation. But equally, it wasn’t like a team environment where you’re sharing ideas with people working on the same things you are. So it simply wasn’t for me.
I found it better to build a small group of other freelancers and get together with them once in a while.
But co-working might well work for you. I know loads of people who love it.
The main thing is, don’t assume that working from home will be right for you all of the time and have a back up plan.
4. Do you have a support network?
You’ll need your family and friends around you just as you would with any major life change. But you know what else would be helpful? Other freelancers you know at a similar stage in their business.
Freelancing can be lonely. Especially if you’re spending the whole week working from home solo. I was fortunate enough to know people who were in the same boat at the same time. We met regularly to brainstorm ideas for one another’s projects, have coffee and just sometimes work quietly alongside one another.
It was so much more important to me in my early freelancing days than I realised it would be.
5. Will you be working on holiday?
For me, the answer to this is yes. Every single time. And I don’t say that resentfully. But I know if I’m out of my business that things don’t get done the same. Things are held up by me or my absence. So the thought of taking a week completely away from it all is totally unfeasible for me right now.
Yet I go on more holidays and weekend breaks than I ever have because I’m happy to work in the early mornings and evenings.
it gives me the day times to spend with my family and enjoy being around them, but without having to hold up all my work or disappoint clients.
It’s important to plan for this before taking the plunge and going self employed.
6. Is Maternity a Prospect in the Near Future?
With both of my pregnancies, I was employed in an agency role. So maternity was a fairly straightforward matter. If you’re planning a family in the near future and you’ll be relying on maternity allowance, read up on eligibility and make sure you know what income you’ll have.
You’ll need to consider the impact of any maternity leave on your business and clients too – which is a consideration that affects the self employed much more.
7. What if it all goes wrong?
So, we want to enter our new found self employment with a position of positivity. And none of us make the leap expecting to fail.
For me, I was asked the very important question (by my husband) of,
“Ok, so what happens if it doesn’t go to plan?”
“Then I get a job.”
And I made the leap from a position of confidence that I’d be able to do so.
Ready do to it?
Going self employed is stressful and exciting in equal measure. But if you’re ready to take the leap, the very best of luck 🙂