There are a lot of different factors that go into starting your own business or freelancing career. The worst thing you can do is wait until you quit your full-time job to start making a plan!
Whether you are starting a fashion label, building an app or taking on clients full-time, here are the 5 most important things to think through before you quit your day job:
1. Make Your Budget
Create a budget by making a list of how much you spend each month. While this is probably the least fun part about being self-employed, it’s super important since you’ll no longer get a regular paycheck from your employer. Make sure to not just account for your salary, but also any additional benefits–health benefits, travel, etc.–your employer offers. Remember to be realistic with your budgeting. While it’s definitely a good time to start being more frugal and cutting out those almond lattes every morning, don’t be too unrealistic with how much you can cut down on.
2. Start Saving Now
Now that you’ve started planning out your budget, you’re probably wondering where all that money is going to come from. Starting to save now is the best way to prepare for when you no longer have that monthly paycheck. A good rule of thumb is to have 6 months of expensessaved up before you launch full-time. Your business will probably have a lot of upfront costs, and the customers you start working with today might not pay your invoices for weeks or even months. See if you can start piecing together additional sources of income before you quit, whether it’s through selling your illustrations on Etsy or teaching on Skillshare. That’ll help keep your savings up as you make the transition.
3. Make Some Sales
Before you jump into your passion project full-time, be sure to get a few projects and clients under your belt while you are still working. If you are freelancing, make sure you have a few reliable clients; if you’re starting a catering business, try working some events on weekends or holidays. You’ll get invaluable experience getting started on your new career, and you’ll start building up the references, clientele, and sales you need to go full-time. It’s also a good time to start marketing your services. Make your website, open your online store and start building your online following on Facebook, Twitter, Skillshare and Instagram.
4. Name Your Price
Now that you have your budget, you’ll need to figure out how much revenue you’ll need to bring in to cover that (and more!). As a freelancer, work backwards to figure out your hourly rate and how many clients you need, or how many units you’ll need to sell if you are opening a physical business. Don’t forget about any overhead costs, like renting a desk in a co-working space or grabbing coffee or lunch with prospective clients.
5. Find A Mentor
Since you are planning on saying adios to your current boss, it’s a great time to find others who’ve been in your shoes to give you advice and support when you need it. Use your personal network on LinkedIn or simply reach out to the people you admire. Share a little information about yourself and your future business, and you might be surprised how willing people are to help. Building this network before you launch your new career will help give you some extra support when you quit, plus probably help you skip a few missteps in the transition.
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