Employee to Entrepreneur: 6 Tips for Making the Transition to Business Ownership
Trying to build a bridge from employee to full-time business owner? A decision like that requires a lot of preparation and planning. Here are some steps you can take to help you make the leap and realize your dream of becoming an entrepreneur:
1. Don’t Skimp on Important Costs
Starting a business is expensive, so it makes sense to keep costs down wherever possible. However, cutting costs on professional advice can result in mistakes that cost more money to fix in the long run.
That’s why it’s best to spend a little bit more money in the beginning on legal and accounting advice so that you don’t make costly mistakes. You can always save on overheads by working from home and renting a serviced office space with meeting rooms whenever you need to connect with clients or advisors in person.
2. Get Insured
New entrepreneurs often get so focused on the branding and advertising aspects of their business that they forget about the liabilities that come with starting a business. Keep in mind that you need to take out insurance as a protective measure for your business.
Depending on the nature of your business and whether you hire any employees, this could include liability insurance, commercial auto insurance, and worker’s compensation insurance.
3. Build a Financial Cushion
When you make the transition to your new business, you’ll eventually need things like a website, inventory, and storage space. So, it’s really important to have a financial cushion to lean on while you’re getting things off the ground.
It’s recommended to have at least three to six months in your savings to live off. And if you have to, take a part-time job so you can get a consistent paycheck while still working on your business for half the day. If you don’t want to get a part-time job and don’t have a lot in savings, you can start your business as a side hustle and work on it after work and on weekends.
4. Be Comfortable with Failure
Starting a business is a massive risk and it can take a long time to see success, whether you’re selling a product or a service. That’s why it’s important to be comfortable with failure. You’ll inevitably make a lot of mistakes along the way, and you need to be able to dust yourself off and carry on.
Understand that not all of your ideas are going to work out, and that’s okay. Be flexible and ready to pivot at any moment and adapt as you go along.
5. Ask the Right Questions
Before you send your letter of resignation, ask yourself a few critical questions to figure out if this is the right fit for you. For instance, are you truly passionate about this? You have to be passionate about your business so that when hard times inevitably come, you’ll be inspired to continue, grow, and improve.
6. Thinking Long Term from the Start
Business owners will often run their business based on what’s happening on that particular day and the type of customers they’re currently serving. However, running your business based on short-sighted plans can cause you to set up financial forecasts, pricing, and service offerings that are misaligned with your long-term goals.
For best results, work backward and think about what you want your business and life to look like in ten years and then implement business strategies and plans based on that vision.
In conclusion, these six steps are essential if you want to enjoy a smooth transition from employee to entrepreneurship. Plan ahead, make strategic decisions, and you should soon achieve your vision.