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Why Become Self-Employed?

Work today looks very different than it did just a few years ago. There are many options for pursuing your passion, work is often completed in defined projects, and for many businesses it is cost and resource efficient to outsource work. This shift has intersected with the underlying revolution of American workers in search of greater control of their destiny, and the desire to do work aligned with their passion and expertise. From our State of Independence in America study, we know that the cataclysmic workforce shifts of the past decades have fueled a new kind of productivity, wealth, and personal growth opportunity for American workers and companies. We also know that the majority of those who choose to pursue self-employment are very satisfied and plan to continue working as an independent.

Are You Ready for Self-Employment?

While it’s exciting to take control of your career path, lifestyle and income, there are also many questions surrounding how to become a consultant.  What steps should you take to prepare? What do you need to start an independent business? How do you leave your employer? Successful independent professionals come from all walks of life, but they share a common trait of being planners. They are savvy professionals who do their research, ask good questions and work towards their goals. Deciding to go independent involves thinking through many aspects of how self-employment will affect your life from preparing financially to considering how you will handle benefits, retirement savings, and childcare management. Look for real-life advice and references before taking the leap.

How to Transition from Full-Time Employee to Self-Employed Professional

1. Review your traits and skills

When you are considering self-employment , assess your readiness by examining some of the common traits of successful independents:

• An identifiable, sellable talent
• Tenacity and resiliency
• Confidence in your abilities
• Focus
• Integrity
• Networking skills

2. Financially prepare

Before you make the transition, it is critical to have a plan for your finances. You should either:

1. Have a project you will be able to start, that will bring immediate cash flow, or 2. Have a cushion that will cover you until you begin to generate income.

You should have at least a three-month cushion, but may require more depending on your industry. Be realistic about when you can expect income.

3. Evaluate insurance plans

Assess how you will protect yourself , your family, your business, and your retirement. Find out the costs associated with health, life, and business insurances.

4. Create a marketing plan

Be conservative with your spending. There is no need to make investments in office space, logos, or branding at the beginning. Reputation, your network, a services brochure, and maybe a white paper are all you will need to get started.

5. Find mentors and advisors

Trusted advisors or mentors can provide valuable guidance and feedback on your plan. Find someone who has taken the journey with whom you feel comfortable speaking. A mentor can help you test, and refine your plan, practice your messaging and give you the confidence you need to move forward in your independent career.

6. Consider starting part-time

The optimal situation is to test independence while still employed. If your schedule allows consulting on the side, and you are not violating your employment contract, moonlighting or working on a part time basis can help smooth your transition to an independent career.

7. Write a business plan

A formal business plan is always a good idea, but at the very least you should have a roadmap that will help you navigate the journey. Have a 12-month and 3-year plan for both a short-term and long-term perspective

8. Research your industry

Research your industry to discover what’s in demand. This will help you to develop a service menu that meets the needs of your market. Learn market rates —both bill and pay rates to gain an understanding of the potential for compensation.

9. Decide how to leave your current job

Make sure that you are mentally and financially able to leave, and have an alternative plan ready to go. Do not risk your current employment by having the conversation too early. Go into the exit conversation committed to your decision to leave. Before you resign, do your legal and policy research. It’s important to know what documents you signed and how they impact your transition. For example, non-competes are very common in employment contracts. To learn more about each of these steps, download our 15-page guide on how to transition to self-employment. Preparation is critical to success.

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