Planning a Move to Self Employment?

PLANNING A MOVE TO SELF EMPLOYMENT

There are many things that push a man or woman to start thinking self-employment or wanting "out" of a job. They range from "I can't find a job" to frustration with your boss to poor pay. However, planning a move into self-employment should be carefully considered, planned and executed just as you would a normal career move in employment. With employers facing tough times, cost cutting, performance contracting and short-term employment are a reality today. Many employees now think of self-employment as a possible and practical option as a career development plan.

Status

The first thing you need to appreciate that self-employment comes with both a new social identity and a status that is very different from employment.  Your new status will demand a personal makeover and perspective of life. In employment, you depend on your employer for work, vision and insight of tomorrow. In self-employment, you depend on yourself. Sadly, too many people only come to fully appreciate the benefits their employers offered them when they move into self-employment.

Create work

In self-employment, you have to work to create work for yourself. You need to develop vision and insight into your circumstances in order to create enterprise that will secure you any income at all. This is hard work and all the more reason why you need to think it through before you make a move. But it is very rewarding and can be extremely profitable. Employment is predictable, self-employment is unpredictable. Employment is routine, self-employment is demanding. Employment is systematic, self-employment, initially, can be completely disorganized. The self-employed are driven to depend on God. The employed are comfortable that the employer is alive. A friend of mine planned his move for three years before he made the move. I would advise the same. Do not just wait to get out - plan!

Plan

Your employment is your springboard to self-employment. You must plan to use your springboard to give you as much lift, leverage and length as possible before you hit the water. This does not mean earning more salary, but it does mean redrawing your operating budgets to allow you to accumulate resources/investments to help you make the move to self-employment as comfortable as possible. I suggest you plan to save between three to six months personal expenses. This sounds like common sense, but you will be amazed at the number of us who just up and quit after failing to set aside funds, develop sellable skills, make business contacts, study the market and the nature of business we plan to go into or even draw up a feasible plan. We never and learn enterprise while in employment.

Focus

Plans are excellent preparation tools. They are markings on paper that you can redraw as many times as you like. If you do not like one, just tear it up and do another one.  Draw up a three-year strategy, an operating plan and a working budget. This can be done in high science or simple maths (I prefer the simple maths). Put it on one or two sheets of paper. Always be realistic. If it does not fit on two pages, you may have too much info or it may not be clear to you what you want to do.  Simplicity allows you to focus, complexity causes diversion. In your first THREE years of business, you need FOCUS, FOCUS, and FOCUS.

Employ yourself

As you, plan note that there is a difference between self-employment & business. Self-employment is "cheaper" than business. Business requires you to set up an enterprise like a shop. In self-employment, you are the business. You could very well do what you did in employment. If you were a secretary you could type letters for people and be paid for it. If you are a lawyer, you could represent people in court as a lawyer in your own right. If you are an accountant, you could do book keeping and if qualified, certify accounts. In other words, the entire function you are charging your clients for can be done by yourself. On the other hand, if you have to open a shop and hire others to do various types of work, then you have opened a business that you cannot run by yourself – that is business.

Business requires start up capital (usually a loan); self-employment requires availability and a good measure of humility. The "business" approach requires higher financial investment and risk than self-employment that simply requires working capital.  By making a careful choice of how you are going to employ yourself, you can save yourself significant grief and undue pressure to pay back loans. Of course, once you have developed sufficient capital in self-employment you can easily move on to open a business.

Competence

If you are going into self-employment, therefore you must have very clear well-defined competencies that you are going to sell to your customers. Self-employment employs your knowledge, skill and will. You must, of course, be very good at your job. These competencies may not be too hard for you to define. After all your employer has been using some of them and you can add and offer more services to your customers that your employer did not use or may not have appreciated that you have. Employment is probably a good place to hone the same skills you will use in self-employment at your employers expense.

Market

Learn about is the market you intend to serve. Who are the customers you want to serve. What do they want? What kind of service will you package to serve them once you leave employment? One major tip here is make it as simple as possible don't offer a "whole range" of services like a supermarket. Plan to do one thing but do it well. If you repair tyre punctures don't stray into gearbox repairs or photocopying even if you are an engineer. You will find that there is enough business for that one thing, if you choose carefully and are not corrupt or too greedy for quick money. 

Profession

One nagging question that keeps many people employed, especially professionals, is they believe they will lose their professional status. Corporate employment is believed to be proof of professional competence. You will not lose your professional status when you leave employment unless your profession requires that you must be employed. You can be a self-employed professional without any limitations at all in the professional sense.

Resources

In executing your plan, consider the start up resources you will need. If you are typist, you will need a computer. If you are a mechanic, you will need a toolbox. Consider how many customer contacts have you developed that can use your services. What are they willing to pay? How will you build your customer base how do you plan to use the income you get from your employment? How long will it realistically take to break even?

Faith

Finally breaking out means that you take that leap of faith. It takes just that - Faith. There is a final gap that has to be jumped, parachuted, bailed out or just sacked. One must take the crunch. Even those who walk the plank willingly, as I did, face have to face the cold water. I am not sure you can be fully prepared for this. It washes over you like a wave of baptism. Coming through takes will power, but if you considered your options and developed a plan faith and fortitude will see you through the change to a new life.

Friends

I must caution you that many people are shaken and crushed when they have to face their employed friends after they make the decision to move to self-employment. They feel small in their own eyes. Many employed friends tend to shun unemployed struggler's. Some people have to go through this torture from their spouses. However, you will never succeed in self-employment if you do not have a secure image of yourself in or out of employment. One clear benefit of self-employment is that you get to know who your real friends are.

Success

There are many definitions of successful self-employment. Many of them revolve around getting rich and making a lot of money. In principle, if you are able to feed your family from gainful, honest self-employment and continue to develop yourself by degree, you are successful.  Your next challenge is how to grow your self-employment into a business. That is another story

Allan

2009

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