If you’re reading this, chances are you’re in the position where you’re in a full time job that you don’t particularly like, have been offering a service outside of this employment on a self-employed basis for a while now and are contemplating making the move to being full time self-employed.
If this is you, then you’ve also probably thought about ditching your employment more than once and jumping straight into your self-employed work full time.
Well, firstly, kudos for not doing this. It takes a lot of mental and physical energy to run both a full time and self-employed role alongside each other and the fact that you haven’t just thrown the towel in with the job from your employer is a great sign that you’re in the right frame of mind to operate your self-employed business on a full time basis.
If you feel that now is the right time to make the move, then there are several points that you need to take into consideration before you do anything.
How financially secure are you?
It’s generally considered that before you make the move to being full time self-employed, you need to be earning the same amount of money from your full time employment – assuming that this amount is approximately what you need to live off – for 3 months.
It is also a good idea that once this has happened, you work for an additional 3 months simply putting your full time employment salary into a savings account, proving that you can survive off your self-employed income alone.
By doing this, it means that you have a full 12 weeks worth of savings set aside should the worse come to the worse and you’re self-employed work dries up completely. Although unlikely to happen, it gives you enough time to look at what options you have available and make a move to ensure that you start receiving an income once again.
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What is the scope for your business to grow?
One of the first things you’ll notice when you go self-employed on a full time basis is the amount of time you have spare. If you were working a 40 hour week for an employer previously, as well as your own work, you’re going to effectively have 40 hours extra available to work. Obviously the fact that you’re going full time self-employed is so that you can stop working 60 or 70 hour weeks, but even still, you’ll find yourself with a lot of spare time on your hands.
As this will be apparent, have you thought about what the scope is for your business to grow and expand?
At the moment, you might feel that you’re doing nothing but working and you can’t take any more clients on or serve any more customers, but when you drop the 40 hours worth of work from your employer, is there enough demand for your services that you can fill this gap, even partially?
How reliable is the work?
When you leave you’re full time job, you’re not only leaving behind your desk, computer, colleagues and the pains of commuting, but you’re also leaving behind the security of receiving a regular salary.
You’re own self-employed work might pay well, but if it’s not reliable or regular, then you really need to think about your options. This doesn’t mean necessarily giving up the idea, but maybe looking at how you can diversify your work so your income is a little more reliable.
How popular are you?
No one is saying that business is a popularity contest, but by having your name out there and known in the right circles, you’ll find things a whole lot easier than if you’re taking the leap into full time self-employed work.
You don’t necessarily have to have an address book full of industry contacts that you call friends, but by making sure that you’ve got a website or blog and a social media presence, you can ensure that you’re doing the basics of keeping your name a talking point in your industry.
Think about the lack of employed perks
Whilst working for yourself full time does bring with it a whole host of benefits, there are some drawbacks when compared to working for an employer.
For example, when you’re working in a salaried role, it’s likely that you might have had medical and dental insurance, as well as having your car’s fuel costs covered for any work related mileage. Depending on the company you worked for, you might have even had the car paid for.
Go full time self-employed, however and you can forget about all of these perks, which can be a costly addition to your regular outgoings that you haven’t been used to paying and whilst they aren’t necessities, they are all strongly advised to have in place.
What’s your backup plan?
Whatever you’re doing in business, planning is key to your success and moving from full time employment to being full-time self-employed is no difference. Having advertising plans, financial plans and business development plans in place are all important, but don’t forget a backup plan.
What are you going to do if things all go wrong? What if work dries up and your left with only the 3 months worth of savings?
If you don’t have a solid backup plan, it might be worth considering whether your current employer can work with your goal of becoming full time self-employed by reducing your employed hours over a period of time, for example, or even letting you take a hiatus for a few months to see how things go with your own owrk.
Making the move from working for an employer full time to working for yourself full time is possible and thousands upon thousands of people do it each and every year. However, it’s not as straightforward as you first may think and these points should all be considered before you make any lasting decisions.
This post was originally published on May 24, 2010.