‘Why give up your day job?’ is a question that would-be entrepreneurs are likely to face – often when they first share their ideas for starting their own business. After all, if you’re going to give up on job security, a regular salary, additional employee benefits and a promising career pathway, you’d best have some solid planning in place.
You plan should likely also include precisely how and when you intend to make the transition from working employee to autonomous entrepreneur. So, let’s look at some things you must get right to give you every chance of making a viable transition from employed to self-employed status.
Develop an entrepreneur mindset
Where your future business interests are concerned, all the decisions are now down to you
. That means you must fully understand the options and will need to make a balanced judgement to secure the best outcome.
Like any business owner, you will need to plan carefully, identify the goals you must secure to achieve your objectives, and then drive on to set everything in motion. Most importantly, you must also learn to turn down any options which will distract you from achieving your targets – something which can be tough to implement.
Be prepared to work much longer hours
Employed workers have regular hours, weekends off, paid holidays and sick pay. As boss of your own business, you won’t. In fact, you’ll work long hours, sometimes unpaid, and often struggle to get time off when you need it most.
Building up your enterprise will take a lot of hard work. But one obvious advantage is that your labour will inevitably put value into your business. Value which may eventually bring you greater wealth than you could ever expect to gain from just working standard business hours for your present company.
Decide how to position yourself
Creating your own business is always a matter of optimal positioning in the market to best reflect your skills and take advantage of the environment within your sector. For instance, if you have an IT degree, started off in a tech company, then spent another five years working for a major insurer as an IT professional and gaining some further sector-specific qualifications, what do you do?
Should you set up as an insurance-industry consultant, an IT consultant, or use your dual knowledge to find a niche role as an insurance-industry IT professional? Hopefully, how you approach this will be a blend of what you consider your strongest assets and your assessment of the most fruitful market opportunities you could address and service.
Identify your market
The more clearly you can determine the target market you want to attract, the more likely you will be to succeed. So be prepared to research your chosen field extensively. You must establish who your rivals will be, and what they offer. This will help clarify what you must do to compete, and what chance you have of differentiating your new business from such competitors.
This process should also consider how close you need to be to your customers. For a service operation, perhaps designing and installing custom systems, you may need to operate at a local or regional level, but if you are marketing a product, your organisation may plan to trade worldwide.
Be prepared for multi-role working
No doubt your present work role is clearly defined. But in your own company you may well create the goods, do the shipping, handle the billing, prepare quotes and chase up outstanding accounts, all in one day. You’ll need to do everything well, which means being able to keep several plates spinning at the same time.
Plan your time
For entrepreneurs, time planning is an art form in itself. You must keep up with the day to day, but you must also build in enough time for continued strategic planning. You’ll always need to understand where you’re heading in one month, six months and also in one years’ time. And crucially, how all this compares with your business planning at the outset.
Fund your living expense before you begin
When your business is getting off the ground, money is always in short supply. Therefore, build up a cash reserve which will cover your living expenses for at least your first six months. This will take some pressure off you, and your new business, at a time when you’ll have most going on.
Buying your business
Having done all your preparation, it’s time to start thinking like an owner. Now you must carefully assess listed businesses
for sale, drawing up a short list of those you will research in more depth. If you know where you’re going and what you’re looking for, this should give you confidence and a head start when it comes to making a purchase and putting your carefully laid plans into action.
By Jo Thornley, Head of Brand and Partnerships at Dynamis. Joining in 2005 to co-ordinate PR and communications and produce editorial across all business brands. She earned her spurs managing the communications strategy and now creates and develops partnerships between BusinessesForSale.com, FranchiseSales.com and PropertySales.com and likeminded companies.