Things to Know About Self-Employment

Written by: April Lunar
06/12/2019

self-employment

The idea of working independently and not having to answer to a boss is very attractive. Other than being your own boss, there’s no better way to get together some bucks in this economy. Moreover, the freedom of taking a holiday from work when you like and working from the comforts of your own home has a certain appeal. If you are one of those who are considering this as well, there are some things you should prepare yourself for, along with some tips and tricks to make a smooth transition.

1)   You can’t quit immediately

No matter how attractive the idea of quitting as soon as you start freelancing is, you shouldn’t quit your day job right away. If your job is paying bills, you will have to bear with it for some time. At least for a time period of three to four months, you need to stick with your regular job. This helps you test out the various nuts and bolts of your new work. It will tell you what you need to invest in terms of time and money, which will be your expenses, as well as your profits. You will also learn how much you need to make to live comfortably as well as pay your bills. Once everything becomes streamlined and the numbers add up, you can finally quit your day job.

2)   Condition your employer

There are some actions and behavioral changes you need to make before moving on to a self-employed role. When you are self-employed, your passion will become your work, and you need to treat it as such. The biggest need of the hour is to be firm in managing and maintaining your boundaries. Most office jobs require people to be on call, travel or have late sittings. If you’re planning to move on to self-employment, you will need to set your own deadlines. This means that you need to make sure that your day job doesn’t interfere with your gig, while also not letting your employers realize. You need to buck and let your boss know that you may not be available after hours, which is especially important if you plan on working on your side gig in your free time.

3)   Learn to stand your ground

Other than the obvious professional hurdles, you will have to face a number of questions from people who don’t or won’t support your vision. If you are willing to hustle for something that you love to do alone with doing a job that pays your bills, people are likely going to call you greedy. Others will call you unambitious for not giving your hundred percent to your full-time job, while others will force you to leave your day job and be self-employed only. Both of these extremes will work against you. Of course, ultimately, it is up to you what you want to do, but you should prepare yourself to not only answer these questions but also defend your passion for self-employment, even for yourself.

4)   You might have to keep some secrets

Not everyone is going to like your idea of self-employment, especially not your boss and managers at your full-time job. This is because any misstep at your current job, as well as calling in sick or not meeting a deadline will be taken as your disinterest in work. Worse, they will assume that you have been using the office time to do your side gig. Therefore, at least in the beginning, be very selective about who you tell about your freelancing or new business. Most companies do not like their employees having any side ventures, even if they are giving their 100 percent at work. They may fire you before your self-employment venture takes off properly.

5)   Be ready to make some sacrifices

This may seem contradictory since self-employment is supposed to make things easier for you and not tougher. However, in the beginning, things are usually rocky, and your personal life may take a hit. Not only can you easily get lost In working when working from home, but a lot of your day-job salary may also go into investment. Additionally, the free hours that you are supposed to be spending with the family, or engaging in other hobbies may be spent whittling away in work. It’s definitely going to take some sacrifice and hard work, but remember not to burn out under the strain.

6)   Hire a tax professional

This may look like an odd suggestion, but when you start on the journey of self-employment, one of the main things to get unwieldy and difficult is going to be your tax return. Unlike the automatic tax deduction that was applied on your fixed income, suddenly you will be faced with a heap of deductions and estimated tax payments along with tracking other income and expenses. If handled successfully, this can lead to large profit margins but if handled unsuccessfully, it can lead to an audit. You will be doing yourself a big favour if you hire a proper accountant to do it so you can focus on the main tasks at hand.

7)   Remember to invest in yourself

Please remember that the whole point of self-employment is to have a modicum of freedom as well as a backup salary. Sure, it is tempting to use it for the extra booze and movies you have been scrimping on, or the gadgets you drool upon, but it will bring you back to square one, that is no extra cash for something substantial. Therefore, set financial goals and invest the money in yourself. You could fund your own car or use it as a down payment for a new home.

Conclusively, it will be a struggle in the begging when you want to start a new side gig without leaving your day job. It will demand a lot of energy as well as time management skills. However, after a while, it will be worth it in terms of cash, independence as well as self-fulfillment.


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