With the rise of the globalized economy, multinational companies, and the 1099 workforce, many people are realizing it pays to work on your own. Whether it’s being a website developer, independent coder, rideshare driver, or some combination of skills, more people are choosing to become their own bosses.
If you’re considering going out on your own but currently have a full-time job, you’re in the fortunate position of being able to plan out your exit from your job. If you’re thinking of working for yourself, making the transition from employee to boss doesn’t have to be a difficult endeavor. Here are some ways to gradually transition from employee to boss.
Make a Timeline
At the very least, have an estimate for when you want to give your two weeks’ notice. Even if you hate your job, you never know if a coworker could refer a client your way, so keep it professional to the end. A good rule is to give yourself a year to save, create a business plan, and implement an exit from your job.
By giving yourself a timeline, you can plan remaining work projects and use your time efficiently. Having a set end date to your current full time job should also encourage you to get everything else in place, including a savings plan and budget.
Consistently Give Your Best
You don’t want to jeopardize your current full time job by slacking off, planning your escape to becoming your own boss. However, you don’t want to work so hard at your full time job that you neglect your part time clients and endanger your work with them.
It may stressful, and you may lose sleep, but it’s important to give your very best work to both your current full time employer and your clients. Learning to manage your time efficiently will pay off in the long term, when you’re working on your own and taking on more clients.
Create a Realistic Budget
Go through your current expenses and figure out what could be eliminated when you work on your own. Some things you’ll have to continue paying include:
- Rent/mortgage
- Debt payments
- Electricity/water/etc
- Car insurance
Some things you’ll save money on include transportation expenses, parking expenses, clothing and grooming, and lunches out. After all, you won’t have to dress up that often as your own boss, although your family would probably like you to shower every once in a while.
Carefully look over entertainment expenses while creating your budget. Do you really need that pricey cellphone data plan, or could you get away with using your home wifi on your phone? Do you need a gym membership, or can you exercise outside and use YouTube videos for indoor exercises?
Ruthlessly Eliminate Debt
If you’re carrying consumer or student loan debt, shovel as much money as you can into reducing it. You don’t want to have to worry about paying debt and rent or your mortgage while getting your business started.
Freelance income can be very sporadic, and you could make $1,000 one week and $250 the next. Save yourself the stress headache by eliminating as much debt as you can while you have your full time, regular paycheck income.
Figure Out Health Insurance
Before you leave your job and stable health insurance, figure out what you’re going to do for health insurance on your own. Now that the Affordable Care Act is mostly stable, Americans can go on the ACA’s website to determine what insurance plans they can afford.
If you’re under the age of 30, you should be able to get a reasonable health and dental plan for under $300 a month. Keep in mind your first year in business may not result in a huge income, too, which should make your health insurance payments even more affordable.
Network
Hopefully you’ve been networking at your current full time job, because you’ll want to step it up once you’ve made your exit timeline. If your company offers mentoring sessions or networking luncheons, attend them as much as your schedule permits. Ask for business cards and make a friendly impression, as the people you meet at these lunches could become future clients.
If your company offers training classes, attend as many as you are allowed. Almost every training class offered by your company can be used to your benefit, including computer, stress management, and business writing classes. Not only will these classes benefit you in your current job, but they’ll likely help you as an entrepreneur.
If you’re set on becoming a full time freelancer and making the leap to unstable, yet rewarding, entrepreneur work, creating an exit strategy from your current job is a must. Becoming your own boss is an exciting process, and you’re in a great spot if you currently have a steady full time job to help you make the transition.
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Personal Capital lets you see all of your accounts in one convenient place. Sign up now for free.Have you made the transition from employee to boss, and what did you do to plan your exit?
It’s definitely tough to leave a steady paycheck and benefits. I can’t agree more that debt elimination is one of the keys. It will provide you with the freedom that you need to pursue what your most passionate about without the need to service a debt burden.
Thank you for your comment, Dane! Getting rid of debt is key to being able to live a more financially free lifestyle, no matter what type of job you want to have.