Before you make the switch from employee to self-employed, there are a few things you need to do. It can be easy to get whisked away by the excitement of finally taking the leap and starting your own business, but it’s also a risk. To ensure your success during your first month of self-employment – and the following months and years ahead – here are five things you need to do.
1 Create a realistic budget (and stick to it)
There’s no doubt about it. Moving from a consistent salary to the fluctuating income of a small business can be hard. And it takes time to adjust. But before you even make the switch, you need to start preparing financially.
Ensure you have a decent amount set aside in savings to help you survive the first few months – even the first year. And start adjusting your spending immediately. Make budget cuts where you can and be prepared for times when cash flow is tight.
2 Follow a business plan
As a new small business owner, you can often feel overwhelmed, particularly in the beginning when you have so many ideas and plans and things you need to do. To keep yourself on track and get your business off to a running start, sit down and create a tangible business plan with actionable steps.
This will help your first month to have purpose and direction. Write a list of things you want to achieve in your first 30 days and then get to work, ticking them off one by one.
3 Find your community
One of the biggest differences between working for someone else and working for yourself is the sudden feeling of isolation, particularly if you find yourself initially working from home. Being prepared for this change is the best plan of attack.
Start networking from day one, and look for your community both online and in person. Attend any applicable events in your local area – and if there aren’t any, consider starting some yourself. Align yourself with other small business owners and entrepreneurs.
4 Get your finances sorted
Make your life easier by getting your business finances sorted from the start – rather than waiting until business is booming. Separate your personal and business finances immediately, so it’ll be easier to monitor your cash flow and determine your expenses and potential tax deductions.
Set your business up on cloud accounting software, like QuickBooks, so you can quickly see how your business is doing at the click of a button. You can also easily send professional-looking invoices and track payments.
5 Find a business mentor
The easiest way to learn some of the hard lessons about being a small business owner, is to find someone who has been down a similar road. Find a business mentor who can offer helpful advice and listen to their story, so you can ensure you don’t make the same mistakes.