One of the significant challenges of self-employment is the drop in income which is usually inevitable. Unless you’re lucky enough to go straight into well-paying assignments on an interim basis or similar, the chances are if you set up on your own, you will need to factor in a financial hit at least for a while, especially if you are coming from reasonably well-paid full time work.
It’s important to be realistic about this, and about your own financial situation before making that move. Many small business owners or self-employed individuals take months or even years before they are actually making a profit and able to take a reasonable salary for themselves, so making an assumption you’ll be earning decent money pretty quickly is risky indeed.
It might mean that self-employment simply isn’t viable for you right now. That’s difficult if you are set on it, but better to be realistic. There are finance options available – occasionally grants, or alternatively business loans or money from angel investors. These are worth exploring, and will depend on a solid, realistic business plan as well as other factors. If you are being made redundant or are likely to be made redundant and a decent pay-off is on the horizon, that’s often a fantastic time to take the decision to go it alone.
Delaying the move to self-employment might be something to consider also – reduce your outgoings for a while and save the difference to get yourself a financial cushion while you get your business going.
The other thing you can do to reduce the impact of this reality is make sure you do everything you can to ensure you get to that profitable stage as quickly as possible. Do loads and loads of research into your target market before you start, and into running a business as well. Start maximising the contacts you already have, and which could be a good source of work once you’re on your own.
One of our absolute priorities is getting partners with us making a profit as soon as humanly possible. Our PlayBook gives them all the information they need about exactly how to run their business successfully, and all our other resources, support and training get them there much sooner than they would on their own. Obviously taking part in a franchise arrangement or similar does involve an upfront investment, but choosing the right one can pay off if it means you are making more money much quicker as a result, and you may find you recoup your investment pretty quickly.
But whether you choose to go for an established business in a franchise-type arrangement or go it alone, be realistic before you make that leap and take all the steps you possibly can to mitigate that and maximise your chances of success.
We are now actively looking for new consultants who want to launch their business in January 2019 so if you’re toying with self-employment and would like to explore working with us, do get in touch.