It’s Christmas, and many people will be looking to the New Year and thinking about starting their own business. Small businesses account for 99% of all private businesses in the UK economy. Taking the leap from the security of employed life to being your own boss can be scary. Getting it right takes time and preparation and even then there’s no guarantee things will work out. Luckily we’ve got some advice for entrepreneurs out there who want to make the move from employed to self-employed.
Follow our step-by-step guide to make your transition as smooth as possible. Then, hopefully, once you become your own boss, you can stay your own boss!
1. Review Your Current Situation
Before you start making any definite plans, take a minute to take stock of where you’re at right now. What are your finances like at the minute? What would you be willing to sacrifice or risk? What couldn’t you live without?
Going it alone is a huge step and requires you to undergo a massive lifestyle change. You might find that you need to cut down quite substantially on your outgoings for a while – are you prepared to do that?
2. Research Your Market
Like any new business, you need to keep an eye on your competition. If you were to start a business in your town, who would be your local competitors?
Try and find a gap in the market that you could fill, a need that isn’t being met. If you can find something that will differentiate you from other businesses, you have a better chance of drawing in customers when you open up.
3. Research Your Audience
Following on from the previous point, if you’ve found a niche to focus on, you’ll also have a niche audience to appeal to. You need to understand that audience thoroughly so that you can properly address their needs.
One of the biggest reasons marketing campaigns fail is because the company didn’t understand their audience well enough. If you want to draw customers to your new business, you need to focus less on what you’re trying to sell and more on how your services can solve your clients’ problems.
4. Make a Business Plan
With your research done, you can now start laying down the foundations. A business plan helps you to define your business and hone in on your goals. This is especially important if you’re going to be applying for outside funding as it demonstrates how you plan to move forward.
Even if you’re not applying for funding, a business plan has several benefits. It maps out the steps you’re going to grow your business, it can help you define your work/life balance, and it can put protocols in place for when things go wrong.
5. Get Started BEFORE You Leave Your Job
Once you’ve got everything in place, it can be so tempting to stroll into work and hand in your notice the next day but try not to. Very few new businesses become a success over night, it’s going to take you time to build up an audience base big enough to sustain you.
Sign on a couple of clients while you’re still working so that when you make the move, you’ll already have some work to tide you over. Also, start saving. We recommend saving up as much as 6 months’ worth of wages before you take the plunge so you have a comfortable buffer for emergencies and if things don’t pick up straight away.
6. Get Through the Long Days
Probably the hardest part of going it alone is the transitionary period when you’re still working full-time but you are also working for your own business. On top of your 40 odd hour working week, you need to set time aside to complete the work for those few clients you’ve already signed on.
There will be long days, very long days, but they are worth it in the end. Eventually you will reach a tipping point where you have enough work coming in that you could get by without your day-job. Then you can really get to work.
7. Spread the Word
So many new businesses make the mistake of neglecting their marketing until they’re earning more. The problem is, you won’t be earning more until more people know about your business.
Marketing is a long-term investment and, while you may have to rely on savings at first, it will pay for itself in time. If you keep waiting to tell people about your amazing new business and what you can offer them, you risk growing your company too slowly and running out of money.
8. Get Networking
Always be ready to make new contacts. Prepare an elevator pitch and make sure you always have a batch of business cards to hand. You never know when an opportunity will present itself.
Don’t forget to build up a bank of contacts with other freelancers or small business owners in related fields too. Then, if your clients are looking for a service which you don’t provide, you can direct them to someone who can. Thus, building your reputation for being helpful and getting in the good books of other local business owners.