There comes a time in many professionals’ careers where they decide they want to work for themselves. Maybe they have a unique skill set that would be well suited to being an entrepreneur. Maybe they feel that their boss is less qualified than them. Maybe they want more flexibility in their schedule. Whatever the reason, going out on your own can be an exciting and rewarding venture. Here are eight questions to ask before you take the plunge.
- Do you have an emergency fund? No matter how successful you think you will be right out of the gate, there will undoubtedly be lag time between your first project and being paid. For most entrepreneurs, the business takes longer to build than they had expected and being overly strapped for cash just adds to the stress of a new venture. The best way to counteract this is to give yourself plenty of latitude in timing before quitting your job. Save up every penny you can, practice living on less and create a decent cushion so you are not blindsided if your income takes longer to pick up than you had hoped.
- Do you have clients? It’s not necessary to have a full book of business, but you also don’t want to start your company with no business. Besides the obvious benefit of having someone paying your bills, having a core group of clients at the beginning can be a jumpstart to success. They boost your confidence; they give you something to do; and they provide a track record, and hopefully testimonials that can help you increase your client list. Of course, beware of taking clients from your current company. You want to be sure that you are not violating a non-compete clause, or just the basic standards of ethics.
- Do you have a business plan? A business plan doesn’t have to be too detailed to work, but you have to have a basic idea of what you are hoping to charge, what your services will be, who your ideal client is, and the size of your marketplace. You should have an idea for how you will market your services, where you will work (i.e. from home? from a co-working space?) and the basic costs of doing business. Don’t forget to include all the startup costs, like a business license, business cards, etc.
- Are you protected? It’s easy to forget that you need to have someone watching out for you on legal and accounting fronts, since that’s not something you ever had to think about when working for a company. It’s a smart idea to have a meeting with an attorney to talk about potential liability and an accountant to get your tax obligations set up correctly right from the start. And don’t forget about health insurance. You don’t want to just hope for the best! Make sure to look into the costs of policies so that you have that covered before quitting.
- How’s your network? Ideally you have kept your network strong, because as we like to say, when you need your network most, it might be too late to create it. People are eager to help those they know, but it’s best if you’ve been working your network proactively even before you need them. If your network is feeling less than robust, you might want to devote some time to reinvigorating it before you quit your job. It’s also helpful to have a cadre of fellow entrepreneurs to lean on. They can answer vexing questions related to set up and client woes and they can also provide moral support at times when the venture might seem more challenging than you had realized. Having a lot of people you can rely on, even if some of them are ‘virtual,’ such as through LinkedIn groups, can be a boon to getting your business started successfully.
- Are you doing it for the right reasons? Avoiding a boss you don’t like or wanting Fridays off are not the right reasons for going out on your own. You will likely work more than ever before at the beginning, to get the business off the ground. That’s not to say that a more flexible schedule might eventually be your reward, but it will take some time. And even if you don’t like your boss, having no boss can be even worse! You need to be sure that you are going out on your own because you have a passion for what you are doing and truly believe there is an unmet need in the marketplace.
- Do you have a plan for the first week? This might sound like a no brainer, but it can be the difference between succeeding and failing. There’s nothing scarier than waking up one morning and realizing that you don’t have to go to your old office (that’s the good part!), but that you actually don’t even know exactly what you’re going to be doing. Try to have a good list in order that is a mix of business set up (ordering business cards), marketing (starting your social media outreach), client outreach (have a list of potential clients to talk to right away), and meetings (sometimes one of the hardest parts when you go out on your own is the loss of workplace camaraderie, so it’s good to set up some lunches or coffee meetings to get that sociability in place).
- Is your family supportive? This one is last, but not least. Entrepreneurs are not just going out on their own alone, they are taking their families with them. You might have reduced income for quite some time, and impose other hardships, from a crazy schedule as you get the business up and running to relying on them for assistance with some tasks, like sending out flyers or filing. Having your family firmly behind you can make the whole venture a lot more fulfilling. You still need to ensure that you are appreciating them because they are likely making a sacrifice for your dream.
Going out on your own is likely to be the most rewarding thing you have ever done. Take care not to burn bridges since it doesn’t always work out, but concentrate on building the bridges that will take you to success. Thinking through all the particulars of your new career will help ensure you start out on the right foot.
by Cathie Ericson