How to Transition from Employee to Entrepreneur

We’re taught at an early age that a job is important. However, the days of the secure job market are long gone. If you’re fortunate enough to have a job, it doesn’t mean you enjoy it or that you’ll be able to stay for over 20 years. Whether you’ve been looking to quit your job to become your own boss for a while now, or if your job may not be there for you much longer, it’s better to prepare for the transition from employee to entrepreneur early. Here are a few things you can do to make a smooth transition. Build an entrepreneur fund. Going from a steady and regular paycheck, especially if you were a salaried employee, to an entrepreneur where your income may vary can definitely be a shock. Similar to an emergency fund, your entrepreneur fund is going to help you out during those rough patches. When you’re first starting your business, you will experience some slow days, weeks, even months! To be prepared, an entrepreneur fund will ensure that you can still take care of bills and expenses should you not earn what you expected. A recommended amount in your entrepreneur fund is 3-6 month’s worth of expenses. This may put a damper on your timeline to leave your job, but it’s better to be safe than sorry. Research benefits and taxes. If your job had a benefits package, which included health insurance, life insurance, retirement plans, and vacations, you may find it hard to abruptly end. Entrepreneurs have it different. More than likely, you’ll be paying for these things out of pocket. Find an affordable health insurance plan that will take care of yourself and your family. If you were contributing to a retirement plan like a 401(k), see if you can either keep your funds in your job’s account (which is possible for some) or find a good bank to open an IRA account , and rollover your funds. Just because you’re becoming an entrepreneur doesn’t mean you don’t need a retirement plan. If you’re used to vacations, see if it’s feasible to still enjoy this benefit when you become your own boss. You may have to scale back on the price or frequency, but you can still enjoy some time off. Taxes also change for the self employed. Find out the regulations in your state, and find a great accountant who can walk you through the expectations of how you pay your taxes. Find clients. When starting your own business, clients and customers are going to be your backbone. You don’t want to jump right in and hope they flock to you; things don’t work like that in the beginning. It’s time to do some hardcore marketing. Business cards will be essential, as will a website. Depending on the type of business you’re starting, different marketing techniques will come in handy. Find out what works best for your industry: direct mail, Internet marketing, advertising, or word of mouth. Having your first 3-5 clients will be extremely helpful. Consider setting up a referral and loyalty program for repeat and new customers. Establish your business legally. Anyone can say they’re an entrepreneur, but if you want to be taken seriously, you have to be legit. Look into getting a DBA, incorporating, obtaining a business license, possibly getting permits, and a business bank account. You’ll also need to get an EIN (your business’s own social security number). Put in your two week notice. When you think you’re finally ready to set up shop, put in your two week notice with your current job. You don’t want to just walk in there and quit. It’s never good to burn your bridges, as your former employer and coworkers may be able to help you in the future. If your boss asks you why you’re leaving, be honest. He or she may be able to help you with contacts or customers, and can keep you in mind if someone they know or meet needs your goods or services. Don’t slack off during these two weeks. Don’t end your employment with a bang, as recommendations will still come in handy. Plan your entrepreneur schedule. Being an entrepreneur provides you with a lot of freedom and not as much stability. It’s easy to get thrown off course when you have the whole day to do whatever you want. Sleeping in late and not showering may sound fun in the beginning but it gets old fast. If you have a business with a physical location, this is out anyway. Find your ideal schedule where you can be the most productive and that works for your clients as well. Try your best to stick to this schedule. Discipline will keep you successful. Network. Entrepreneurs usually don’t have the benefit of people just knowing about them. Make it a regular routine to go to networking events to meet new people you can either collaborate with or service. Always keep plenty of business cards on you, and think about joining an association in your field. Finding a mentor also isn’t a bad idea. What are some of your tips for aspiring entrepreneurs? Related Articles: What is an IRA? 6 time management skills for entrepreneurs Pros And Cons Of Starting A Small Business 5 Lessons From a Homeless Entrepreneur Financial Checklist For 2011 Primerica – The pros and cons How to make more money with your emergency fund This article was written by a Guest Author. If you would like to write a guest post for our personal finance blog , you can find out how here . The articles on this site are for entertainment purposes and should not be taken as financial advice. Please contact a financial professional for specific advice regarding your situation. Also, many of the CPF articles help us pay the bills by using affiliate relationships with Amazon, Google, eBay and others. Find out more here .

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How to Transition from Employee to Entrepreneur

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